Shelf Space - Buying the revolution

Most of us felt it at least once during the late ’90s: a sense that the tech revolution and its riches were passing us by. Alan Greenspan’s wooden warnings of “irrational exuberance” sounded sensible enough, but the market kept swelling like a bull on Viagra. So maybe it wasn’t too late to buy into the new paradigm. Mortgage the house, title loan the car, pawn Grandma’s wedding ring ... then invest in whichever dot-com is generating the biggest buzz. You too could be a heroic pioneer on the virtual frontier.

Add several zeros and some Machiavellian power grabs, and that was basically the plan of Time Warner Chairman and CEO Jerry Levin when he accepted America Online Chairman and CEO Steve Case’s offer to merge Time Warner with AOL. The merger and subsequent reversal (make that obliteration) of fortunes is chronicled in Nina Munk’s Fools Rush In: Steve Case, Jerry Levin, and the Unmaking of AOL Time Warner, a blunt and iconoclastic account of the largest merger in history.

The combined company, overvalued to begin with and hobbled by a civil war of corporate cultures, quickly lost more than 70 percent of its value, erasing approximately $200 billion of shareholder wealth. Ted Turner, who had sold Turner Broadcasting to Time Warner in 1997 and was its largest single stakeholder, lost $8.5 billion, reducing his fortune to a mere $2.3 billion.

For both Case and Levin, missionary zeal seems to have been their Achilles’ heel (though Case was clearly better grounded than Levin). For others, the fault was simple greed, which first encouraged unwarranted optimism, then led to fiscal fictions. (Those fictions are under investigation by the SEC.)

The many men (and a few women) who ruled the two companies were once worshiped by Wall Street and the adulate business media. Munk’s penetrating character sketches are the great strength of the book. They reveal these prophets of the New Economy as sometimes-inspired visionaries of the Information Age whom you would never, under any circumstances, allow into your kitchen for fear of what they might slip into your Kool-Aid.

Fools Rush In by Nina Munk. HarperBusiness. $26.95. 368 pages. Munk will speak at the Margaret Mitchell House, Tues., Feb. 24, at 7 p.m. Reception starts at 6 p.m. 990 Peachtree St. $8. 404-260-0818. www.gwtw.org.