Analysis
By David Schepp BBC News Online North America business reporter

Steve Case's resignation from the helm of media-giant AOL Time Warner is remarkable not only for its timing but also for its suddenness.

Analysts had been expecting Mr Case to leave some time this year, though his departure comes sooner then thought.

Steve Case remains a multi-millionaire

Experts also believed that, as executive chairman of the world's premier media conglomerate, Mr Case would not go without a protracted fight.

But it was the prospect of such a battle that prompted Mr Case to announce his resignation, he said on Sunday.

"We need to focus on [the challenges we face], not some debate about Steve Case," he said about his decision.

Third resignation

While Mr Case will no longer serve as chairman, he will still serve on the firm's board and co-chair its strategy committee, although the level of influence he can wield is questionable.

In recent months, his presence at the head of AOL Time Warner and within the firm's boardroom had become far more of a liability than an asset.

1985: Steve Case and Jim Kimsey found AOL's precursor, Quantum Computer Services 1992: Case becomes chairman and floats AOL shares 1994: AOL subscribers top 1 million 1998: AOL buys CompuServe for $1.2bn 1999: AOL buys Netscape Communications for $10bn 10 Jan 2000: AOL announces purchase of Time Warner for $180bn 12 Jan 2001: Merger deal completed, forming AOL Time Warner 31 Jan 2001: Newly combined firm posts $1.1bn loss in first three months 24 Sep 2001: Shortly after 11 Sep terror attacks, AOL warns it will miss profit targets 5 Dec 2001: CEO Gerald Levin says he will step down 25 Mar 2002: Company takes $54bn charge against profits; blames merger 18 July 2002: COO Bob Pittman, architect of AOL's business, resigns 24 July 2002: AOL discloses US regulators are investigating accounting at America Online 14 Aug 2002: AOL says it may have overstated profits at America Online unit 17 Sept 2002: Vocal board members, including media mogul Ted Turner, call for Case's resignation 1 Oct 2002: Case seeks broader role in AOL's operations 23 Oct 2002: AOL plans to restate two years' profits, worth $190m 3 Dec 2002: AOL warns ad sales will fall by 50% in 2003 12 Jan 2003: Case resigns saying his presence is a distraction

Shareholder anger with AOL management, and Mr Case in particular, has been palpable for many months.

In reflecting personally on his decision to leave his post in May, Mr Case said he had concluded the firm would fare better without his leadership.

"Case was clearly ineffective, and I didn't see any direction coming out the company under his leadership," said Tim Ghriskey, president, Ghriskey Capital Partners, a fund manager that has sold its stake in AOL Time Warner.

Mr Case's departure follows those of former chief executive Gerald Levin and former chief operating officer Robert Pittman, all three architects of the AOL/Time Warner merger.

The resignation also comes two days after the third anniversary of the announcement of the $106bn (�66.1bn) merger.

It has been a huge disappointment, a fact reflected in the firm's share price, which has fallen nearly 70% to about $15 a share since the acquisition was completed in January 2001.

"More importantly," says Professor Irwin Kellner of Hofstra University: "[The company] didn't achieve the synergies that were envisioned by Steve Case and Gerald Levin."

Failed merger

At the time of the announced merger, then-AOL chairman Case and Time Warner chief executive Levin were lauded as visionaries, marrying both old and new media in a way that promised to "fundamentally change the way people get information, communicate with others, buy products and are entertained".

But the efficiencies they both imagined failed to materialise.

More recently, a drop-off in new subscribers and a depressed advertising market have relegated AOL to little more than small contributor to the parent firm's bottom line.

Ad sales, on which AOL relies heavily, are expected to shrink to $800m this year, well below the $2.7bn the firm made in 2002.

'Swapping'

Adding to financial woes is the expectation of a charge against profits later this month, possibly in excess of $10bn, on top of a $54bn write down by AOL Time Warner last month to account for a decline in America Online's value.

Levin is still viewed by some as a visionary

Aside from a falling share price, the company has also been dragged down by an investigation in AOL's accounting methods.

The Securities and Exchange Commission (SEC) and the Department of Justice are investigating the firm's accounting technique.

AOL and other technology firms in the high-flying 1990's stand accused of employing "swapping", a form of accounting that allowed the companies to book bogus revenue.

Despite his failings, Mr Case can already claim success in changing the way people communicate through the invention of America Online, the precursor to which he co-founded in 1985.

Case's millions

AOL eventually became the US' largest provider of online services with more than 35 millions subscribers worldwide.

As the firm grew, it gobbled up assets, including competitor CompuServe and software maker Netscape Communications, then the maker of the most popular web browser.

And in merging his firm with Time Warner, some argue, Mr Case may have saved his firm from the fate of other internet stocks, which now trade for mere pennies a share or are relegated to the smouldering heaps of history.

It is also the reason Mr Case remains a multi-millionaire, despite the sharp drop in AOL's share price.

His 11.5 million shares of AOL common stock, and options to buy millions more, mean he is likely to sustain his wealth whether or not he has a job in AOL's boardroom.