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Creative Transactions Earned Team Rewards

"It's the way he gets people to love him and fear him," said an AOL official. "You don't go to play, you go there to be abused."

Colburn could be rougher on his troops at work, said several sources, many of whom declined to speak for attribution for fear it would hurt their career or jeopardize their benefits.

David Colburn was chief of the AOL unit that put together deals that are under investigation by the SEC and Justice Dept. (Courtesy Chai Lifeline)

_____AOL Series_____
Part I: Unconventional Transactions Boosted Sales (July 18, 2002)
Sidebar: Unorthodox Partnership Produced Financial Gains (July 19, 2002)
The Heart of a Deal: How America Online Brings Advertising Deals to Fruition
Excerpt of AOL E-mail
A Rocky Road: Graphical Timeline Tracks AOL Stock Price
AOL Documents and Deals Reviewed by The Washington Post
_____Time Warner_____
Stock Quote and News
Historical Chart
Company Description
Analyst Ratings
Timeline: Time Warner Highlights
Company Downsizing Actions
_____Time Warner News_____
Former AOL Chairman Heads Luxury Travel Firm (The Washington Post, Nov 23, 2004)
Time Warner Nears Deal Over AOL Accounting (The Washington Post, Nov 23, 2004)
AOL Concentrates On Security Issues With New Software (The Washington Post, Nov 18, 2004)
More AOL Time Warner News

Once, Colburn beckoned Ted Rogers, then a new member of his team -- and a former Washington Redskins player -- and gave him a dressing down outside AOL's fifth-floor boardroom during a meeting of "Op Com," the operating committee of senior executives, chaired by Pittman.

Witnesses said Colburn screamed at Rogers for a paperwork mistake -- getting the wrong AOL executive's signature on a particular deal. The berating became water-cooler legend: If Colburn could decimate Rogers, a 250-pound, 6-foot-2 1/2 former linebacker, what about the rest of his crew?

When asked about the incident, Rogers said, "Maybe I deserved it. I don't know. I felt completely demoralized because it was my first deal."

Rogers said he realized that the company's "lifestyle and culture" wasn't for him, so after 14 months he left AOL of his own accord in May 2000.

Every couple of weeks, AOL sources said, Colburn would pick other people, poke fun at them, yell at them, break them apart, then build them back up.

"He'd put an arm around you, and say, 'Things are going to be all right, I really love you,' " said an AOL source. "He'd say a kind word, and it'd make your day. It's like an abusive father."

Colburn also bestowed financial rewards on his minions. He would send favored underlings and their spouses on weekend getaways to places like New York, all expenses paid, including limousine service and lavish dinners, AOL sources said.

Colburn helped decide who got stock options, another powerful incentive to keep employees in line, especially when AOL shares were on the rise, sources said. During the height of the Internet boom, employees recalled logging on to their computers in the morning, checking their portfolio and staring in amazement at their growing assets.

"It was like, 'Wow, I just made a few thousand dollars just by sleeping,' " said an AOL official.

But in exchange for such largess, Colburn demanded loyalty, AOL sources said, and never was that more clear than when AOL was at the pinnacle of its power.

"He created these foot soldiers who went to war for him," said an AOL source. "These were heady times."

Picking Partners

AOL could make or break a company just by picking which one it decided to do business with. When AOL struck a deal with a dot-com, it often had the effect of giving the start-up instant credibility, a leg up on the competition and better prospects for launching an IPO.

"I would basically pick the winner of [an industry], their stock would go up, and they'd be instantly rich, and they'd do anything for me," said an AOL business official.

Just as Colburn exacted loyalty from his employees, AOL exacted steep terms from its partners. Sometimes, in a display of its clout, AOL would demand that a dot-com sign an ad deal within 24 hours or AOL would take the offer elsewhere, company sources said.

During the Internet bubble, AOL deal makers had another advantage: Frequently, they were bargaining with naive dot-commers in their twenties and thirties who had never negotiated a business deal in their lives.

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