Monday's announcement of Dulles-based America Online Inc.'s plan to buy media giant Time Warner Inc. sets the stage for what could be the biggest merger in history, based on the value of the deal when it was announced.

But in the inevitable spin cycle that followed the announcement, local business leaders generally greeted the news "optimistically," as one headline described it.

Well, they certainly weren't dancing in the streets in anticipation of a transfer of Time Warner divisions to Dulles or a major increase in the work force there.

Under the circumstances, being optimistic is as far as anyone dares venture in projecting the merger's impact on the local area.

The simple truth is, nobody knows--not even AOL and Time Warner officials--how the new company will be structured. That's yet to be worked out.

The only thing that has been confirmed so far is that the headquarters of the merged company, AOL Time Warner, will be in New York. Time Warner Chairman Gerald Levin will be chief executive officer, and Steve Case, AOL's chief executive, will be chairman of AOL Time Warner. But Case will remain at AOL's Dulles headquarters complex.

The magnitude of the proposed $183 billion merger is staggering, to be sure. Even so, there is nothing about this deal that would indicate the local economy will benefit more from a merger of the two companies than it has with AOL's headquarters here.

Not even the merger between the much larger Fairfax-based Mobil Corp. and giant Exxon Corp. is likely to have any appreciable effect on the local economy.

AOL may be the world's leading Internet service provider and a major player in Northern Virginia's high-tech economy. But a merger with Time Warner won't mean a thing to anyone who lives in Silver Spring, Suitland or St. Charles.

This merger will have a far greater effect nationally than it will locally. It clearly has competitive implications and is likely to lead to similar mergers involving traditional media, telecommunications firms and Internet companies.

The more immediate effect, however, will be realized by stockholders of both companies. Although AOL agreed initially to exchange 1.5 shares for each share of Time Warner stock, a transaction originally valued at $166 billion, stock prices of both companies have dropped since last week. AOL also agreed to assume $17 billion in debt.

In other words, the proposed merger is of little significance locally except where AOL shareholders and employees are concerned.

There may be an increase in start-up companies in Northern Virginia as a result of the merger, if some AOL employees opt to leave the company and form their own technology firms, as some business leaders have suggested. But it's unlikely that this entrepreneurial trend will spread to the District or to suburban Maryland.

What this merger agreement does for the area, more than anything, perhaps, is provide further proof that the private sector here is rapidly maturing, developing its own cadre of nationally prominent companies. That's happening despite the federal government's continuing role as the main engine driving the local economy.

Some might argue that the proposed merger of AOL and Time Warner adds credence to the claim that metropolitan Washington is a leading high-tech center.

AOL is not the typical Dulles corridor high-tech company that does research or develops hardware or software. It has always been a company that uses technology to provide access to information. The technology it uses may be more complex but other types of businesses, including newspapers and auto-repair shops, also use technology to produce products, transmit information or diagnose problems.

Simply put, AOL provides a conduit to the Internet. What sets it apart from its competitors is its marketing supremacy.

That aside, the AOL-Time Warner combination, in the broader sense of a merger, isn't all that different from the merger in which WorldCom acquired MCI Communications Corp., or Royal Ahold's acquisition of Giant Food. Like AOL, MCI and Giant were not only highly successful locally grown companies but also leaders in their respective industries. They both added significant value to the companies that acquired them and that's why the mergers were consummated.

Although it's true that AOL in this instance would be the acquirer, Time Warner agreed to the merger because it recognized AOL's value as the world's leading Internet service provider. Ultimately officials at both companies agreed to a merger because they believe the combination will add value to the products and services offered by each.

In the final analysis, we have in AOL the smaller company swallowing a giant whose revenues and assets dwarf those of the acquirer. And yet the merged company's headquarters will be in New York, the media capital of the world.

That may be the clearest indication yet of the kind of company that evolves from this merger and how it will affect this area.