In February of 2001, Robert W. Pittman sat on the front porch of his estate in Montego Bay, Jamaica, with his close friend Henry Silverman, the chief executive of Cendant Corporation and the man who had hired Mr. Pittman in 1995 to run Century 21. Mr. Silverman gave his buddy-who by then was the co–chief operating officer at AOL Time Warner-a frank warning about what lay ahead.
“I told him he was making a big mistake running around the world for [former C.E.O.] Jerry Levin, saying he could grow [earnings] by 30 percent,” recalled Mr. Silverman. “The company was too big to do that over a sustained period of time. I predicted he would be shot someday for being the messenger of a message that could not happen.”
Later that year, while the two men were hanging out at Mr. Silverman’s house in the Hamptons, Mr. Pittman told his friend that Mr. Levin was leaving, and that he would become chief operating officer and Richard Parsons would become the new C.E.O. “He said, ‘Isn’t that great?’” said Mr. Silverman. “I said, ‘No, it’s not. You should leave. When you’re not the C.E.O., you leave.’ He said, ‘It looks like I lost.’”
Incredulously, Mr. Silverman replied, “Hel-lo! You lost!”
And yet Mr. Pittman stayed on-only to be warned again six months later, as it became clear that AOL was the revenue-dragging albatross of the biggest media debacle in history. According to Mr. Silverman, “I said, ‘You have to leave, because you’re going to get blamed for all this. Tell Dick [Parsons]. By the summertime, you’ll be fired.’
“If you weren’t in the middle of all this,” Mr. Silverman added, “it was easy to see.”
On Thursday, July 18, Bob Pittman-the Mississippi minister’s son turned sermonizer of synergy-finally resigned from his post as chief executive officer of America Online. Eleven days before, a report in The New York Times had depicted an “open revolt” against Mr. Pittman, with Time Warner executives sharpening their daggers for a Shakespearean finale to the failed merger scheme penned by Mr. Levin and Steve Case in early 2000. But Mr. Pittman’s friends and close associates tell a different story, with Mr. Pittman as a political naïf facing an intractable culture of Time Inc. princes who resented the newcomer’s efforts to pry open their velvet coffin and plug them into the AOL mainframe. They said Mr. Pittman’s aversion to hardball infighting-and his dogged belief that he could make the merger work-ultimately did him in. Friends complained that Mr. Pittman was ushered out with a slew of bad ink spouting from disgruntled staffers in the Time & Life Building. In the process, they said, those antagonists managed only to flatten their stock options even further.
Mr. Pittman, of course, isn’t anyone’s idea of Mr. Nice Guy. He’s typically described as arrogant and detached, a no-bullshit salesman seen by the option-poor Time Warner folks as a high-rolling Mark Cuban–type who’d already cashed in on the boom-$66 million in the last year alone-and who continued to sell snake oil after the jig was up and the stock was down more than 70 percent. By continuing to sell Mr. Levin’s and Mr. Case’s vision of cross-platform advertising synergies, Mr. Pittman’s role as hatchet man-the guy sent to do the dirty work and make the dream a reality by forging partnerships between divisions-was a good enough reason to turn the ax against him. “The first person a salesman sells is himself,” noted a high-ranking executive at AOL.
A spokesman for Mr. Pittman said that he wasn’t doing interviews at this time. But associates of Mr. Pittman said their friend was unfairly cast as Lucifer in what Time Warner execs liked to dub “AO-Hell.” “The merger was not his idea,” insisted Myer Berlow, a close associate of Mr. Pittman’s and the former president of global marketing solutions at AOL, who was himself spanked in a recent Wall Street Journal article about the failed sales schemes he and Mr. Pittman cooked up. “He was chosen to be the C.O.O., to fulfill the promise of the merger,” Mr. Berlow said. “He is not ‘Bob Pitchman.’ He didn’t make it up; he never lied to anyone; he never overpromised.”
Across the board, associates of Mr. Pittman pointed to the House of Luce as the epicenter of leaks and spin that produced a rabid anti-Pittman campaign in the press. The Times published perhaps the most damning article of all on Sunday, July 7, with the headline “A Media Giant Needs a Script.” Written by David D. Kirkpatrick and David Carr, it described an “open revolt” against Mr. Pittman, specifically from Time Warner executives. While no one pointed directly to Time Inc. chief Don Logan as the source, there was widespread belief among AOL-ers that lieutenants of Mr. Logan’s used the press to send Mr. Pittman out with a malign flourish. Said one AOL executive close to Mr. Pittman, “I hope when we get Al Qaeda, and Osama bin Laden is hung in the square, that The New York Times’ enthusiasm is half as gleeful as it was for AOL’s comeuppance.”
In fact, the July 7 story may have been the final blow. Over the July 4 weekend, Mr. Pittman was still undecided about leaving-”and then the [Times] story ran,” said the executive close to Mr. Pittman. “I suspect that any last doubts about leaving vanished about 9 a.m. Sunday morning.”
Lack of Character?
As for the Time Inc. executives who may or may not have leaked the story: “It’s pussy behavior,” said a high-ranking AOL executive, who also adamantly fingered Time Inc. as the source of much of the press. “When things are bad, that’s when you shut up, suck it up and make it better. These are times that define people’s character. And I found their character wanting.”
Apparently, the onslaught of negative stories puzzled Mr. Pittman. A close friend said that Mr. Pittman told him on July 19, “I don’t understand why these guys want to trash me and the company. If my being shit on puts 20 points on the stock, I can understand that. But they’re trashing the company to where their own options are being sunk even further.”
While Time Inc.’s Mr. Logan certainly wanted a more decentralized management that would allow the division autonomy from Mr. Pittman’s synergistic Advertising Council, one Pittman supporter said executives below Mr. Logan were simply trying to preserve a culture of status at Time Inc. Mr. Berlow recalled the long lines of black cars lined up to received Time Warner executives every day-company excess that was anathema to Mr. Pittman, he said.
“Time Inc. is run by a much deeper cultural need, and that need is one of status,” said Mr. Berlow. “If you’ve worked at Time Inc. you know that’s what it’s about. Bob didn’t understand this. You want to get a car service? It cost $22-just buy it. He didn’t get that. It was particularly anathema to somebody like Bob, who’s involved in cost-cutting.
“We’re always accused of being more flashy,” Mr. Berlow continued, speaking of AOL’s reputation as a bastion of private-jet millionaires, himself among them, “but I can’t imagine Bob taking people out to a restaurant and spending $1,000 for a bottle of wine. He would just think that was a sin.”
Others said that Mr. Pittman was actually oversensitive to the Time Inc. culture, because he was well aware of the fact that their stock-option plans were in his hands. “He was very sympathetic and understanding to people who had a different compensation scheme, who felt they’d been screwed,” said a close associate of Mr. Pittman’s. “But then he had a point of view that we’re all screwed. And secondly, he was trying to make everybody wealthy. Sometimes you have a winning lottery ticket and sometimes you don’t.”
Most describe the downfall of AOL Time Warner as a combination of the dot-com meltdown, a decline in advertising and the self-inflicted wounds resulting from internal battles. Certainly the advertising decline destroyed the amped-up dreams of AOL as the growth engine of the company. Along the way, sales and marketing executives within the various divisions-Time Inc., Warner Bros. Studios, Turner Broadcasting-resented the bundling of advertising established by AOL dealmakers, like Myer Berlow. A July 18 article in The Wall Street Journal described Mr. Pittman and his team’s alleged attempts to centralize ad sales as alienating to advertisers and account managers at various Time Warner divisions. The article “was 100 percent at odds with the truth,” claimed the executive close to Mr. Pittman. “Bob worked to get all the advertising representatives to cooperate with one another, but was never an advocate of centralized ad sales.”
A source close to the AOL Time Warner board of directors told The Observer that Mr. Pittman’s attempts to forge partnerships between Time Warner companies and America Online were weakened because Mr. Parsons’ democratic style as C.E.O. didn’t allow Mr. Pittman to execute the increasingly unpopular strategies. For Mr. Pittman, the burden of being the operator for other leaders took its toll. “[He] was told to go do X-Y-Z,” said the close friend of Mr. Pittman’s. “And the Time Warner guys would say, ‘I don’t want to do that.’”
And when he turned to Mr. Parsons for support, the friend said, he didn’t get it: “Bob didn’t have the stroke from Dick. Had Dick given him the ability to perform, he’d still be there. He would have hung in there and tried to make it work.”
And Mr. Pittman appeared to have little stomach for politics, however. >From the beginning of the merger, friends said that Mr. Pittman, as co-C.O.O. of the entire company along with Mr. Parsons, was charged with the untenable task of making Time Warner executives happy while also hitting the numbers promised by himself and Mr. Levin. Some associates urged him to use any means necessary, including dictatorial force, but Mr. Pittman demurred. “The instructions we were given were, ‘Do not push them,’” said Mr. Berlow. “‘Get the results, but don’t get them bent out of shape.’ My feeling is, I couldn’t get results doing it his way.
“In some ways, he was unbelievably naïve,” added Mr. Berlow. “But it wasn’t naïveté-he just thought that good would win out. He’s a Methodist minister’s son.”
But by last spring, after he’d been sent to Dulles, Va., to fix AOL, Mr. Pittman told his friends that he was tired of beating his head against the wall while being constantly lambasted in the newspapers. “If I had to describe his emotion, it was frustration,” said Mr. Silverman.
But if Mr. Pittman was frustrated, friends said his cool personality didn’t allow him to vent openly or retaliate in kind. “In some ways, he’s an odd personality,” said Mr. Berlow. “I don’t think he would turn to Veronique”-his wife, an online graphic artist-”and say, ‘I’m not getting a fair shake.’ He knew the press was going to be awful.”
But not all of Mr. Pittman’s supporters have remained completely loyal after some of that awful press, especially the revelations that AOL executives may have performed improper accounting to meet revenue targets. The AOL executive who originally called Time Inc.’s alleged leaks “pussy behavior” said that he, for one, had reformed his views. “My point of view matured,” he said. “When you see it all laid out like that, you understand that it’s offensive.”
Still, he said, “It’s not personal, in the end. It’s just bidness.”
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