The purchase of Time Warner Inc. by Dulles-based America Online Inc. was cheered yesterday by Virginia politicians and civic leaders, but some also worried that the deal might lead to a reduced local presence for one of the region's most famous brand names.
A top AOL executive assured Gov. James S. Gilmore III (R) yesterday that the online service will continue to operate from its capacious campus in Loudoun County, and AOL's chairman and chief executive, Steve Case, who will be the chairman of the new corporation, will keep his home and office in Northern Virginia.
But the merger also means that the new company's corporate headquarters and its board of directors will be in Manhattan--raising fears that the natural focus of the corporation will move north. The purchase comes at a time when AOL, long a sleeping giant in public affairs, was just beginning to flex its political muscle, both locally and in Richmond.
"If Time Warner becomes the content provider for a dynamic, large company, I think we're in good shape," said Del. John H. "Jack" Rust (R-Fairfax), who led the fight last year to give AOL an $18 million tax break tied to construction of a data center in Prince William County. "If Time Warner becomes the driver, I would think that would be a shame. . . . If AOL picked up and went to [pay] New York rents, it'd be AOL's loss, not Northern Virginia's."
In Loudoun, AOL's home base, business leaders said they are hopeful that top executives other than Case also will remain at the Dulles campus. One AOL executive is in line to be chairman of the local Chamber of Commerce, and the company even entered a float in last year's Halloween parade in Leesburg.
"We would hate to lose senior management," said Randy Collins, president of the Loudoun County Chamber of Commerce. "There's an advantage to having access to the managers there. Any time you have a national corporate celebrity, everyone wants to get his ear."
Politicians throughout Virginia have aggressively courted the Internet giant, showering AOL with tax breaks over the years and seeking the company's advice on legislation. Gilmore, who has taken a leadership role in national technology policy, has attempted to cultivate a close relationship with Case, whom he appointed to a high-profile commission on Internet policy.
George Vradenburg III, AOL's senior vice president for global and strategic policy, telephoned Gilmore yesterday afternoon to assure him that the Internet company would keep its headquarters--presumably its entire physical plant and payroll--at Dulles.
"It's good news," said Mark A. Miner, press secretary to Gilmore. "It's a Virginia company that's expanding to new heights."
Others in Virginia politics were withholding judgment for now. The deal could color dramatically what had been expected to be an intense lobbying struggle in Richmond over the issue of "open access," the national conflict between cable companies and Internet service providers like AOL over who controls the information connections to millions of homes and businesses across the country.
James W. Hazel, the Arlington lawyer-lobbyist who represents AOL before the Virginia legislature, said the deal will certainly change the ever-evolving debates about information technology. If nothing else, Hazel said, the merger "proves just how fast the Internet is changing."
In Prince William County, where AOL broke ground on a $550 million computer center last year, county officials were thrilled by yesterday's announcement. Supervisor Edgar S. Wilbourn III (R-Gainesville) said he is not concerned about losing any of the 150 jobs predicted for the data center, which will be in his district.
"We take it as excellent news," Wilbourn said. "I would not anticipate anything less than what's already planned. If anything, it might enhance our position."
Staff writers Steven Ginsberg, R.H. Melton, Peter Pae and Craig Timberg contributed to this report.
CAPTION: America Online's Internet service will remain at its Loudoun County campus.