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Media Mega-Merger | THE SCENE

At AOL, a Feeling of Redemption

* There's more pride than celebration at company's laid-back headquarters. But some fear the culture of casual independence may change.


DULLES, Va. — America Online Inc., whose employees work on a huge headquarters campus that was once a British Aerospace plant, remained remarkably laid back a day after their boss announced the biggest merger in U.S. history.

There were no Time Warner Inc. banners or balloons littering the hallways of AOL, located 35 miles from Washington, D.C. Most workers paid little attention to TV monitors broadcasting ongoing media analysis and any riches they might reap from the blockbuster AOL-Time Warner deal. And the talk at water coolers was more of pride than of celebration--a feeling of redemption for a firm whose online service has been derisively referred to as the "Internet on training wheels."

"The immediate reaction was, 'Wow!' " said Jimmy Lynn, director of account services at AOL. "Who would have thought that a little company like AOL would take over Time Warner? I think people who made that comment [about training wheels] are looking at us a lot differently now."

For AOL, the proposed merger with the entertainment giant caps a transformation of the company from a high-tech oddity--about 2,500 miles from Silicon Valley--to the darling of the online revolution. In the process, AOL's 12,000 employees have learned to wear their nerdish image and global marketing aspirations with equal aplomb.

"What's evolved at AOL is two cultures," explained Mario Morino, a Reston, Va., philanthropist who heads his own technology think tank, the Morino Institute. "You have the traditional technology culture . . . and a much lighter, much looser culture of creativity. AOL is irreverent, [but] it also has a lot of polish."

AOL's success has also helped northern Virginia become a world leader in high technology. That's a big change from a few years ago when AOL recruiters had to explain where the firm was located and reassure job candidates by noting it was close to Washington.

Later, as the firm encountered service outage problems amid its rapid growth, critics derided AOL as hopelessly ill-equipped to go up against online rivals such as Microsoft and AT&T. But as AOL grew to more than 20 million subscribers, those concerns faded away.

But the specter of uniting with Time Warner, an entertainment colossus with about six times as many employees as AOL, has rekindled some misgivings. Some AOL employees on Tuesday worried that AOL may move a substantial part of its operation to New York, where Time Warner is headquartered.

"I don't think I'd ever leave--even if AOL moved to New York," said Erin Mantz, a senior account manager who has been with AOL for two years.

AOL officials spent Tuesday calling local managers to quell those fears. But some workers remained worried that Time Warner's sheer size may overshadow AOL's culture of casual independence.

"I'm not necessarily looking forward to wearing hose and heels" to blend into some new corporate culture, quipped Carrie Davis, 26, an AOL paralegal who has been with the company for three years. "The fact that I can now come to work in jeans is a huge plus for me."

Davis noted that AOL up till now has been a company still small enough for many employees to know one another's names.

"This is really a close-knit community. We work together and a lot of [us] party together," she said.

One interesting wrinkle in the proposed merger is that it would speed up the effective date of millions of stock options for AOL employees, no small issue given that AOL's shares have skyrocketed 80-fold in five years. But AOL's plan also requires employees to wait one year after the Time Warner merger is completed before they can exercise these new options.

However the merger deal plays out, AOL has developed a culture of its own that for years has set it apart from high-tech hotbeds in Silicon Valley and the button-down corporate community of New York. Unlike Sun Microsystems Inc., for instance, AOL has no "chief scientist," nor do its employees pride themselves on nerdish pocket-protectors. And AOL rarely boasts about its research-and-development spending for new technology.

About 2,700 AOL employees work in a modern headquarters building that houses cubicles dimly illuminated by overhead lights and the ever-present glow of television and computer monitors. About one-third of them wear suits and ties. About 600 other employees, mostly technicians, work in a separate facility a few miles east of Dulles in Reston, Va., where the dress code is decidedly more casual.

But AOL's sales staff and, especially, its content creators, are on the front line in the firm's campaign to make its online offerings palatable to the most mainstream of audiences. AOL has dubbed this strategy "AOL everywhere," hoping to plant its online service in everything from wireless phones and new information appliances to traditional desktop computers.

Steve Case, AOL's chief executive, has urged workers to make things so simple and compelling that "my mother could do it."

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