Last week, AOL Time Warner announced that it was writing off $54 billion of its net worth as being completely unsaleable and without any value whatsoever. This embarrassing loss is in addition to the nosediving stock price for the last fifteen months, during which the value of the company has dropped sixty percent. There will come a time when this is blamed on Microsoft, of course, and any minor improvement during the next year will be mercilessly pumped up as a sign that the company is happy and healthy.

Being prepared for the spin is always handy, so you might want to read this fairly savage analysis that places the blame squarely on Gerald Levin, the departing chief, and all of the other execs that conceived of the merger idea – a terrible idea from the beginning – and allowed a tangled organizational mess to develop that defies comprehension, much less any rational business planning. “What a colossal disgrace, topped only by the pathetic efforts of the company’s brass to spin the fiasco – which amounts to the largest balance sheet evisceration in American corporate history – as nothing more than a kind of accounting hiccup that affects nothing. No, I don’t think so. The charge-off in question – which removes $54 billion in balance sheet goodwill from the company’s books – amounts, in effect, to a complete repudiation of whatever sense may have once been thought to lurk in the January 2000 merger of America Online and Time Warner Inc. in the first place.”

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