AOL Time Warner Inc. Chairman Steve Case is the latest in a line of new-economy moguls to fall victim to some old-fashioned economic pitfalls. Or it may be that he and his fellow vanquished media lords just dreamed up their good ideas too early.

Case, 44, who was once a Pizza Hut flavor-tester, came to AOL in 1983, when it was an obscure company called Control Video Corp. He helped to create online games and chat rooms and rose through the ranks of the company he would rename America Online. Case personified the khakis-and-polo-shirt dot-com ethos of the time and built employee loyalty by throwing beer bashes and proselytizing his vision of creating an online community.

Fending off doubters, he built AOL into a flagship "new media" company capable of buying one of the most revered names in the media world: Time Warner Inc., built on the legacy of venerated Time founder Henry Luce, the very ideal of ink-and-paper "old media."

In doing so, Case exploited what may be turn out to be a once-in-a-lifetime technology stock gold rush, in which his company, which was little more than an overburdened Internet service provider only a few years earlier, became the darling of Wall Street, with stock prices topping $90 per share in late 1999.

At the time of the 2001 merger, Case admitted it would be difficult to value the union, given that Time Warner Inc. had millions of dollars in "hard-asset" value, such as libraries of films and music, dozens of magazines and cable channels, while AOL had little more than paper value built on subscription revenue and future prospects.

The new company turned "synergy" into an industry buzzword. It was the idea that, by combining certain operations of the merged companies and cross-promoting their products, the new company could achieve greater revenue than either AOL or Time Warner could on its own. The conglomerate claimed some successes: About 100,000 new subscriptions to Time magazine are sold per month on the AOL Web sites, the company said.

But larger synergies failed to materialize. Soon after the merger, the combined stock began to fall. The revenue levels did not meet the expectations promised to Wall Street, and investors began to punish the company by driving down its stock price. AOL Time Warner chief executive Gerald Levin, who engineered the merger from the Time Warner side, resigned in December 2001.

When unconventional accounting practices at AOL uncovered by The Washington Post last summer spurred twin federal investigations, the stock fell even farther. Robert W. Pittman, AOL Time Warner's chief operating officer and designated synergy executor, resigned. This left Case as the last AOL top executive in a company firmament dominated by Time Warner executives.

Time Warner employees on both coasts began rooting against Case, blaming him and his merger for the dwindling value of their stock options -- some felt an unfair shot at Case, given Levin's long desire to wed a dot-com company. At Warner Bros. motion picture studios, executives ignored orders from their new bosses at AOL Time Warner.

At AOL's home campus in Dulles, however, employees rallied behind Case and new AOL head Jonathan Miller during the fall as the company pinned much of its turnaround hopes on the rollout of AOL 8.0, the new and slicker version of the service, and plans to make better use of Time Warner's arsenal of movies, music, magazines and other content materials. An AOL source last night said: "I think when [AOL] people wake up tomorrow morning and see this, they're going to be a little bummed."

Some institutional investors, their funds depleted from to AOL Time Warner's declining stock price, which has fallen more than 75 percent over the past year, had called for Case's ouster over the past several months. At least one large investor said yesterday he would not push for Case to be removed from the board. "Why bother?" he said. "He's been emasculated."

Throughout it all, Case maintained a positive, if low-key public persona. Inside the New York company headquarters, however, he was sometimes known as "The Wall" for his taciturn manner, which seemed to prefer e-mail to face-to-face communication.

The boyish Case, who was wowed by "Third Wave" futurist author Alvin Toffler as a youth, preached something he called convergence, the idea that his company could help create a home in which all machines would talk to each other. Case was not alone in his ideas and is only the most recent to pay the price for believing too soon.

Last summer, former Vivendi Universal SA chief executive Jean-Marie Messier, who dreamed of turning a creaky French utility into a 21st-century media and communications behemoth via high-tech wizardry, was ousted by his board of directors after a year-long spending spree that left the company on the verge of bankruptcy and has triggered investigations by authorities in France and the United States. In Germany, whiz-kid Thomas Middelhoff was bounced by his board of directors at Bertelsmann AG media company, the world's fourth-largest.

For many, Case's ouster as AOL Time Warner chairman was the end of an extraordinary arc that saw an Internet upstart swallow a venerated old-media company in one huge gulp, then watch helplessly as fortunes reversed and AOL became nothing more than one troubled business unit in a division of a Time Warner-dominated goliath.

"This is the final act of reversing the merger," the AOL source said. "It's now complete."

Staff writer Alec Klein contributed to this report.