Filed by America Online, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: AOL Time Warner Inc.
Commission File No. 333-30184
The following communications contain forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. In particular, statements regarding the AOL/Time Warner
merger are based on management's current expectations or beliefs and are subject
to a number of factors and uncertainties that could cause actual results to
differ materially from those described in the forward-looking statements. The
following factors, among others, could cause actual results to differ materially
from those described in the forward-looking statements: inability to obtain, or
meet conditions imposed for, governmental approvals for the merger; failure of
the AOL or Time Warner stockholders to approve the merger; the risk that the AOL
and Time Warner businesses will not be integrated successfully; and costs
related to the merger.
Careful consideration also should be given to cautionary statements made in
AOL's reports filed with the SEC, especially the section entitled
"Forward-Looking Statements" in the MD&A section of AOL's 10-K for the fiscal
year ended June 30, 1999 and the Risk Factors section of AOL's S-3 filing that
became effective in November 1999.
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THE FOLLOWING IS THE SCRIPT OF A SPEECH GIVEN BY STEVE CASE, CHAIRMAN AND CEO OF
AMERICA ONLINE, INC. (AOL) THAT MAY BE POSTED BY AOL ON ITS WEB SITE AND THAT
MAY FORM THE BASIS FOR COMMUNICATIONS TO BE MADE FROM TIME TO TIME BY OTHERS ON
BEHALF OF AOL.
Thank you very much. It's a pleasure to talk to you tonight about the future of
the communications world.
AOL and Time Warner took a big step into this future with our announcement that
we will be merging our businesses to become the world's first truly global media
and communications company for the Internet Century.
The way we see it, this merger is an incredible chance to produce something new
and powerful that will change consumers' lives.
Let me tell you why we believe so strongly that this is just the right time for
this new company -- a company that we are committed to making the most valuable
and most respected in the world.
Every day, we see new evidence that our world is growing increasingly connected.
The interactive experience is changing the way we communicate -- and the way we
build our communities. It is changing the way we entertain and inform ourselves;
the way we shop and share ideas. It is changing the way we do our jobs and the
way we run our businesses; even the way we connect with government.
And every day, the online experience is becoming a more central and more
valuable part of our lives. As it does, we are expecting even more from the
medium. People are starting to expect their televisions, telephones, CD players
and all kinds of handheld devices to provide them with the same interactivity,
the same range of choices, and the same convenience and control they can get on
their PCs. And, in turn, they want more and more from their PCs.
Having gotten a taste of interactivity, people are starting to say, "Why can't
my PC be as simple as my TV - and why can't my TV be as powerful and flexible as
my PC?" And they'll ask, "Why can't I access my buddy list from my cell phone?"
And, "Why do can't all these new devices work together in a way that's simple
and easy to understand?"
People shouldn't have to be systems integrators to figure out the answers to
these questions. What they need and want is the simplicity and convenience that
is made possible by convergence.
For the past decade, people have been talking about convergence and how it was
"right around the corner." Today, it is right around the corner.
Looking out over the next couple of years, we see a new world taking shape where
everything gets connected and transforms people's lives. Just think about the
four devices that now deliver a variety of services in the home -- the
television, the PC, the stereo, and the telephone.
Already, the distinctions between these four devices are blurring -- and
interactivity is connecting all of them.
This will give consumers many more choices and opportunities. For example, the
TV will have portals and bookmarks like the Internet and provide interactive
services like e-mail and Instant Messaging.
Through digital delivery, music and streaming videos will be conveniently
available on demand and the experience will be easy for consumers to customize.
Consumers might want to store their music on servers in their homes, or keep it
in online jukeboxes for remote access.
For the telephone, the distinction between long distance and local calling will
disappear -- and communications will be integrated with the TV and the PC. You
might be trading instant messages with somebody and then decide to switch to
voice - and you'll do it quickly and easily. Or you'll be able to answer the
phone through the TV and have a video call.
Just on the PC, AOL already provides 200 million online stock quotes every day
to help people manage their finances. We handle nearly 900 million messages a
day - 50% more than the 600 million pieces of mail handled daily by the United
States Postal Service. Imagine what those numbers will look like when people can
access the same information, anytime, anywhere.
Of course, the role of the PC in the home will change. Just as the TV evolved
from a single console in the living room, people will have computers all through
the house -- even in appliances.
In fact, the biggest change of all will likely be home networks -- just like
electricity and plumbing -- that will run through homes linking together all
four of these devices and more. These networks will really weave a range of
options into a tapestry that will fundamentally change the way people live.
The fact is, convergence is changing consumer's expectations - and the more they
get, the more they'll want. Frankly, it's something Jerry Levin has been talking
about for years - and it's where the AOL Time Warner story really starts.
AOL Time Warner will lead the way in turning this vision into a reality - not
only by providing all the separate pieces, but by connecting the dots for
consumers in a simple, convenient way that improves their lives.
We aim to become an integrating force, at the epicenter of the next Internet
Revolution. Our assets will act as catalysts for each other, creating strong new
growth and greater benefits. By building bridges between our products,
platforms, and mediums, we will be able to innovate more quickly and
efficiently. As one company, we will be able to meet today's fast-growing demand
from consumers for more and richer interactive services -- wherever and whenever
they want. And these opportunities will only accelerate in the years ahead.
At AOL, we've witnessed first-hand how essential interactivity has become to
people -- and how much more so it will be in the near future.
In five years, we have grown from 1 million subscribers to more than 23 million
members and tens of millions of consumers of our Web-based brands. One hundred
million people around the world communicate with AOL Instant Messaging and ICQ.
Netscape's Netcenter has 25 million registrants. And our AOL members have upped
their usage from an hour a week to more than one hour per day.
We are justifiably proud of this. But there are 23 more hours in the day - and
what are people using them for? They are watching TV and going to movies,
reading books and magazines, listening to music and talking on the telephone.
This merger is our chance to paint on that larger canvas of people's lives,
creating a more compelling, more convenient, more affordable set of services.
That's the goal behind our AOL Anywhere strategy - and it's a consumer-centric
plan. We want to use new technology to make people's lives easier, not more
complicated.
Let me give you two examples. There have been many predictions over the years
that the television experience was about to change forever. But it never quite
happened. Basically, TV hasn't changed much since I was growing up. The biggest
difference is that now there are more channels, and it's harder to find things.
That's what led to the concept of AOL TV, which we will launch later this year
- -- giving customers the interactivity they want when they watch television, and
bringing TV into the Internet Century. Time Warner's assets will jumpstart this
roll-out, bringing another level of interactivity and integration
For example, AOL TV will provide a new interactive marketing platform, new
subscription models, a new genre of interactive programming, and dramatically
higher usage. And AOL TV will have the advantage of Time Warner's relationships
with its cable customers, as well as promotion on Time Warner's cable networks
and program offerings -- all of which will be especially critical as we approach
this year's holiday season.
Of course, we will have similar opportunities in the film and music industries
to build new businesses around new formats and devices.
Another key piece of our AOL Anywhere strategy -- and one that certainly brings
our industries together -- is mastering the wireless frontier. Again, the
pundits predicted for years that the wireless revolution was about to happen.
Now they are right. Mass-market consumers are driving this trend -- and the
Internet is fueling an explosion in the use of wireless phones and handheld
devices.
Last week, we announced a series of exciting agreements that will drive that
transformation to new levels of customer convenience. With these and future
partners, our customers will be able to access their usual services -- e-mail,
stock portfolios, Buddy Lists, and personalized news and sports from the leading
Time Warner brands like CNN -- across a range of different devices, wherever and
whenever they want.
AOL Time Warner will be well positioned to get a jump on wireless. Already,
roughly 70% of AOL households own a cell phone, pager, or both -- twice the
penetration of the population at large. And we bring the leading brands in
online mapping, local city guides, and Instant Messaging, among other valuable
features and information for mobile users -- with AOL's hallmark convenience and
ease-of-use.
Like interactivity and convergence, mobility is a critical piece of the new
networked world. Once people get a taste of it, they will expect even more. We
believe that our AOL Wireless strategy will allow us to truly "grow the pie" --
driving increased consumer demand, higher use of existing services, and a range
of new services based on these technologies. At every level, this is a
win-win-win opportunity for AOL, for our partners, and for consumers.
One thing the last few years have made crystal clear is that in such a rapidly
changing, Internet-charged economy, companies must constantly reinvent
themselves to attract new customers. And today, it's not how many assets your
company has, it's how you connect those assets and constantly innovate to better
serve consumers.
In this new environment, it is critical to integrate the new technologies for
consumers. Whether in wireless or other new markets, both individual companies
and industries must build bridges between platforms, mediums, content and
services -- capitalizing on new synergies, creating new businesses, and taking
advantage of transforming business opportunities.
That, in fact, is our game plan for AOL Time Warner. And we believe we are
uniquely positioned to put it into play, for a number of reasons.
First, our combined assets are unrivaled -- not only because of their range and
value, but because of the way they fit together like pieces of a puzzle. From
the world's most popular media, Internet and communications brands and
properties, to our technological expertise and infrastructure, we are poised to
lead the next wave of growth.
Second, we have strong, sticky relationships with our customers, including more
than 110 million paying subscribers between the two companies. In fact, our
combined brands touch consumers more than 2.5 billion times monthly, all around
the world.
Third, our combined resources give us the strength to take full advantage of new
opportunities. With significant revenues, critical strategic partnerships, a
world-class operational team, management vision and a deep talent pool, we will
drive strong and consistent growth.
Finally, we are committed to putting the interests of both our customers and
shareholders first. AOL and Time Warner have always believed that the best way
to return shareholder value is to bring new value into the lives of consumers.
That's what we'll do as a combined company. Just as Time has been a part of
people's lives for 75 years, and CNN for 20, we plan to entwine our brands into
the fabric of society, improving our customers' lives ... and becoming the most
valuable company in the world.
The Internet has flourished because it was built on an open infrastructure that
spurred competition and sparked innovation. And the new environment of broadband
connections -- cable, DSL, satellite and wireless -- will grow fastest if the
infrastructure remains open and competitive.
On the day we announced our merger, AOL and Time Warner committed to open our
cable network for competition by multiple ISPs, and to support all major
platforms in the future.
Last week, we took the next step, jointly releasing a Memorandum of
Understanding that will form the framework for delivering AOL and other ISPs
over Time Warner cable -- and give consumers greater choice. Implementation of
open access is no longer a question of whether, but of when.
Jerry Levin and I believe this is the right policy, grounded in the right
principles, for consumers, for the cable industry, and for the growth of the
Internet.
Let me close by giving you an example of what this will mean to consumers in
real terms.
How will the average teenager experience AOL Time Warner? She won't just talk on
the phone with her friends about the new Madonna CD. She'll chat with them --
and Madonna -- on AOL Live. She won't wait for her mother to drive her to the
record store. She'll listen to the latest song clips online and download them,
turning her desktop into a jukebox.
Of course, she will also be able to order the latest Madonna poster online from
Teen People and download it to My Pictures without ever leaving her bedroom.
And, instead of waiting in line for hours to buy concert tickets, she'll buy
them online, after My Calendar automatically alerts her about an upcoming
Madonna performance. And if her mother can't take her to the concert --
technology has its limits -- she will be able to hear and see the Webcast of the
concert.
Five years ago, this would have been a pretty unrealistic - and pretty
futuristic -- wish list. But that is exactly the kind of enhanced experience AOL
Time Warner will be able to offer consumers in sports, personal finance, news
and communication -- to name just a few. And not in the future, but right now.
That is the real benefit of the AOL Time Warner merger: putting people in the
driver's seat, providing them with the world's best destinations, and making it
easier than ever for consumers to get where they want to go.
AOL has always delivered the simplicity and convenience that have made the
online experience a part of millions of people's lives. At AOL Time Warner, we
will do it again - with the assets, the resources and the vision to transform
and enhance our customer's experiences in entertainment, information,
communications, shopping and learning - quickly and preemptively.
Like Wayne Gretzky, we aren't focused on where the puck is; we're focused on
where it's going. We're going to create an exciting new converged world, which
we believe will catapult AOL Time Warner into being the most valuable player -
uniquely positioned to make the promise of this new world a reality.
Thank you.
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AOL Time Warner Inc., together with Time Warner Inc. and America Online, Inc.,
filed with the Securities and Exchange Commission a preliminary joint proxy
statement/prospectus regarding the proposed business combination transaction
referenced above. In addition, AOL Time Warner, Time Warner and America Online
will prepare and file with the Commission a definitive joint proxy
statement/prospectus and other documents regarding the proposed transaction. You
are urged to read the definitive joint proxy statement/prospectus, when it
becomes available, because it will contain important information. The definitive
joint proxy statement/prospectus will be sent to stockholders of Time Warner and
America Online seeking their approval of the proposed transaction. You may
obtain a free copy of the definitive joint proxy statement/prospectus (when it
is available) and other documents filed by AOL Time Warner (as well as by
America Online and Time Warner) with the Commission at the Commission's web site
at www.sec.gov. The definitive joint proxy statement/prospectus and these other
documents may also be obtained for free by America Online stockholders by
directing a request to: America Online, Inc., 22000 AOL Way, Dulles, VA 20166,
Attention: Investor Relations, telephone: (703) 265-2741, e-mail: AOL
[email protected], and by Time Warner stockholders by directing a request to Time
Warner Inc., 75 Rockefeller Plaza, New York, NY 10019, Attention: Shareholder
Relations, telephone: (212) 484-6971, e-mail: [email protected].
