What we really have here are two stories, each important, each intersecting the other: the vitality of the AOL Time Warner media empire as it wrestles with the demons of convergence and profitability, and the resulting impact on the journalism put out by its news properties.

Today, it's almost impossible to talk about news without talking about the corporate forces that shape it.

Since the merger between AOL and Time Warner was announced 26 months ago, one of the recurring leitmotifs in this Wagnerian drama has been: Who's on top? Which culture -- and whose values -- will dominate?

	The public needs to keep vigilant watch that the company's wide-ranging journalism operations are not sacrificed on the altar of Wall Street profits.

Because AOL had the upper hand in the merger, it gained an early advantage. But in the months since then, the balance of power has shifted. As the company's stock price crashed and burned, it has become clear that AOL Time Warner's value reside in its traditional entertainment and media properties. The mantra on Wall Street has become, Buy Time Warner, get AOL for free.

One could make the case that the plummet in the company's financial fortunes is good news, if only for its humbling effect on the company's top brass.

In a way, AOL has gotten its poetic comeuppance. These were the folks who, back in 1994, tried to convince newspaper publishers that the Internet was evil, rife with copyright piracy. A few years later, they acted as if they invented the Internet.

These were the folks who displayed such galloping hubris after AOL's 1998 purchase of Netscape, resulting in the top 15 percent of Netscape's talent walking out the door.

As one former Netscape executive told me, "There was a vast cultural difference between the meritocracy that existed at Netscape and the know-it-all, superficial aspects of a wannabe media company. The AOL executives thought they were gods who walked the earth."

It comes as little surprise, then, that the meshing of cultures between AOL and Time Warner is taking some time to sort out. AOL, as the executive said above, is still learning how to become a media company.

Pavia Rosati, former director of the entertainment channel for AOL, recalls the days before the merger: "I would get in fights with people over whether we were a media company or a software company. The merger with Time Warner lent AOL a bit more journalistic credibility and gave me a little more muscle.

"When someone asked to give better play to a story because they were an advertising partner and took out a lot of ads but the content sucked, it was easier to push back and say, This is not how a media company operates."

Rosati, who was a journalist with News Corp., Mirabella and the Village Voice before her stint at AOL ended a year ago, says her experience was entirely positive. "I loved working there. It was fun and big and messy and challenging. But it's a different place now. I still have friends there, and the low stock price has become an all-consuming nightmare for some people."

She says the company is still grappling with a key underlying issue: "Does Time Warner get to drive because they've been a successful media company for so long? Or does AOL get to drive because they became a successful Internet company so quickly?"

That question continues to echo in the hallways of AOL Time Warner in Dulles, Va., and New York. Both last month and last week, the company announced another management reshuffling, as they bring in a slew of seasoned executives from old media properties to help its flagship online operations adapt to today's grim business climate.

Says Rosati: "A lot of media people have been brought in to save the company, but if they don't understand the medium, if they don't know why a message board is important, your background and experience aren't going to translate all that well. AOL is looking for saviors, and hiring media veterans won't make their problems go away."

The AOL brass has its work cut out. The service's subscription rate has stalled, as it faces stiff competition from MSN, major ISPs and broadband providers. The division's earnings plummeted 14.6 percent in the year's first quarter. And its customers are getting fed up with the never-ending pop-up ads and marketing come-ons.

ChangeWave Investment Research, an investment and research firm, polled its clients who are current and former subscribers of America Online and released the results Tuesday, showing that 40 percent of respondents were dissatisfied with the AOL service. "This survey has the most overwhelming, and negative, response to a company or technology we have ever seen," the firm's director of research said.
 
Beyond synergy: Sound business practices, good journalism

Having said all that, keep in mind that AOL has proved remarkably buoyant through the years, earning the moniker "the cockroach of cyberspace" for its resiliency. In the mid-'90s, Net-savvy analysts and journalists were skeptical that AOL would survive. Why would people pay to join a closed network when the Web was free for the taking? With its relentless marketing drives (care for an AOL CD coaster, anyone?) and simple interface, AOL proved the skeptics wrong.
 
As for the AOL Time Warner empire, its troubles may be overstated. Earlier this month Parsons told the cable TV industry convention in New Orleans: "We're the No. 1 movie company, the No. 1 online company, the No. 1 premium cable network company, the No. 1 cable network company, No. 2 cable company, No. 2 music company. What am I missing?"

Synergy has seen its share of wins. Time Inc. magazines are snagging about 100,000 new subscribers a month by selling subscriptions on AOL. Traffic to Time.com has soared from 1 million monthly visitors two years ago to 5.9 million visitors in March, thanks to the AOL firehose.

Despite those successes, the larger goal of synergy between the company's new and old media divisions has proved mostly elusive so far. Parsons has already signaled that the company would shift attention away from some of its struggling convergence technologies, such as AOL-TV, and focus on each business division's fundamentals.

Other bets, like transforming the flagging financial news cable channel CNNfn into CNN Money, are on hold. And CNNSI -- the 1996 marriage of convergence between Time Warner's corporate cousins Sports Illustrated and CNN -- failed to find its rhythm. AOL Time Warner pulled the plug on the cable sports network last week. The show never got its arms around that elusive entity known as synergy.

As other companies have learned in recent years when they've bet on convergence or counted on the Internet to change the world, all of this stuff takes an awfully long time to happen.

Public needs to stay vigilant

It's hard to figure AOL Time Warner. One moment, it seems clear that a corporate juggernaut that wields this much media power can only have deleterious effects on news and journalism. The next moment, the company's holdings seem so dispersed and disconnected that the whole $83-billion enterprise seems little more than a paper tiger.

Yes, the news is alive and well at CNN, Time, Business 2.0 and the slew of other AOL Time Warner properties. The decades-old Time Inc. tradition of editorial independence remains intact. No major ethical breaches or editorial conflicts of interest have stained the company's reputation.
 
But we're still early in the game.

The public needs to keep vigilant watch that the company's wide-ranging journalism operations are not sacrificed on the altar of Wall Street profits.

Inside the corporate offices, executives should resist the temptation for short-term bumps in its stock price by slashing costly news operations. Growing pains or not, it's time for AOL TW to start behaving like a mature media company and exercising the  public responsibility that accompanies a company this big and influential. We'll see whether Parsons & Co. have the vision and the temperament to ride out the storm.

And AOL Time Warner's journalists? They need to keep doing what they do best: Report and edit the news.