Time Warner Inc. America Online Chairman & CEO Jonathan Miller at Bear, Stearns & Co. 19th Annual Media Conference - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

UNIDENTIFIED SPEAKER: Hi, we're going to begin. Here are the ground rules. Jon Miller, the CEO for America Online, gracious enough to come and agree to do a Q&A with us. Jon does not have prepared remarks; we asked Jon if we could just launch right into Q&A. The ground rules are very simple. This is your meeting. I will kick it off with a question, and my colleague, [William Lo] and I, are going to be going around with microphones. We're going to be asking questions. We know you guys have a lot of questions. So, when your hands go up, we will give you the mic. Jon is here to address your concerns. So I will kick it off, and then it's open session for the audience.

UNIDENTIFIED SPEAKER: Jon -- AOL, what is it today, and what is it going to be when you're done, and how are you going to get there?

JON MILLER, CHAIRMAN AND CEO OF AMERICA ONLINE, TIME WARNER: When I'm done? Uh-oh. All right, first of all, I appreciate that you said "AOL." You introduced me as the CEO of America Online. We are in the formal process of changing the name to AOL, Inc., which is really, we think, better globally does represent a point of view. So it's as good an answer as any to that question, which is, I think, when I'm done, whatever that means, AOL should be -- it is today and should be one of the largest Internet companies in the world. And it's very important to maintain scale on the Internet, because the great businesses on the Internet have all been defined by scale. I can go into that more if anybody asks the question.

That's one. And, two, in order to achieve that, it has to be a global business. And part of the reason we are pursuing -- in fact, the largest reason for pursuing the entire web strategy is that is a -- it is the World Wide Web; it's a global strategy. So I think that scale and being a global company are certainly part of the legacy that I would like to have.

The second is I think that we all know that content is moving online in some really interesting ways, and I think that AOL is one of the very few companies that can marry [let us call it the head] aspects of content, the premium content world, the produced content world and everything that comes from the Web, in terms of user-generated or community content and micropublishing and things like that. I want to see those two worlds come together and monetize that as well as anybody can.

UNIDENTIFIED AUDIENCE MEMBER: (Inaudible) Time Warner to get (indiscernible).

JON MILLER: I almost could hear you. What was that question? All right, I heard you. Listen, if you think about the last thing that I just said, about the marrying of that head and the tail, Time Warner is the richest treasure trove of premium content available anywhere in the world. And I think we are like kids in a candy store in that environment. And it's only getting better; we are only starting to do more stuff.

In a couple weeks we will launch MPTV, which, if you haven't heard about it, is taking the Warner Bros. television library, one of the great television libraries in the world -- it may be only exceeded by the BBC -- into an online environment. We're not just retransmitting the stuff; we are doing it in a high-quality video format. We are also doing it with a whole lot of interactive features that I think will make it really interesting and come alive for this medium. That's one example of, I think, a ton of things that can be done.

So being part of Time Warner is like being a kid in a candy store. And I think that time has really come, because everyone in the world knows that they have to now figure out their online strategy and figure out their digital strategy. And being in the family is terrific.

I understand the question, and I think that -- so I'll answer the other part of it. The only issues to me, and the only issue that could come up that I see is really, do we need a currency to do certain kinds of acquisitions and things like that? And the answer to that could be yes. I mean, given the frothy values that Internet companies have today, even the smaller ones that don't yet have a lot of revenue, having currency for like-for-like types of acquisitions could be helpful. But that's not a question of not being part of Time Warner; those are not the same thing.

UNIDENTIFIED SPEAKER: So is it fair to say that, if you use the analogy of the kid in a candy store, is it fair to say that you haven't really indulged yourself yet in that candy store, and we're (multiple speakers) going to start seeing some indulgence?

JON MILLER: (Indiscernible). No, I think that part of it is legacy issues. And certainly, they do go back to merger hangover. But I think the biggest part, to my mind, is twofold. One is we weren't a great partner. Until we really had a true Web strategy that basically made us -- the promise of scale at least as significant as anybody else. We weren't the best place for content that necessarily wants to be everywhere. So that was one. And I think, too, that for all of those parts of the media business to realize that they must play in this area. And I think that both of those things are now coming together.

UNIDENTIFIED SPEAKER: So what do you need that you don't have, to do what you want to do? What's missing?

JON MILLER: Missing in the sense of parts, or just what do we have to do?

UNIDENTIFIED SPEAKER: Parts, management, assets, distribution, however you want to define it.

JON MILLER: I think the biggest thing for us is we were not the best sellers of advertising in the past. We are now pretty good and getting good fast. And we have really tackled that and made great strides and are getting to be very good sellers online. And we've [gotten that] at scale, and we're monetizing at a high rate. In fact, we can monetize now. We feel, as much good supply as we can put into the marketplace, we feel we can monetize. That was not true in the recent past, or a little bit [more different].

So the biggest thing, to me, in terms of driving the business on a kind of the tactical level is how we put in great supply. And that basically means how to get more people on the Web to use AOL, and how do you plug the so-called leaky bucket in terms of subscribers? And I think you can see there's different initiatives under way for that. But the biggest thing is we can handle supply now. We can …