Value investing, supposedly, is back, after years in which anyone who tried to make a rational investment decision based on such things as price/earnings ratios or actual revenues was derided as a hopelessly out-of-touch fuddy-duddy.

So, from a value perspective, was the merger a good idea? Steve Case, not surprisingly, believes it was. In an interview televised on CNBC, he noted, "There's no question that this merger so far has been a disappointment ... [but] if you look out 10 to 15 years, I think people will look back and have a different view on this merger."

The statement is typical Case: milquetoasty, kind of boring, and almost impossible to prove or disprove. But what if he's right? What if AOL Time Warner's leadership figures out how to properly exploit the 35 million subscribers to AOL, in conjunction with the conglomerate's stellar media and entertainment entities? What if, 10 years down the line, passing through some kind of AOL Time Warner gateway (dare we say "portal"?) to the computer-tainment universe is de rigueur for the online world?

A great deal will have to happen for such a future to materialize. AOL will need to successfully negotiate the exploding broadband market for Internet access. It will have to weather the current media/advertising recession. Most important, it will have to avoid being jettisoned by a board of directors who hope that striking the evil letters A-O-L from the corporate masthead will get Time Warner's stock price back up where it belongs.

It will require, above all, management taking the long view. Which means being able to ignore short-term stock price fluctuations while pursuing a long-term strategy. We may well wonder whether any publicly traded corporation in America is capable of such behavior. But it's clear that most of the mega-media corporations in the United States are looking for ways to pool content and distribution networks in precisely the way that AOL Time Warner has.

Right now, the Federal Communications Commission is deliberating whether to reduce restrictions on media ownership that prevent media conglomerates from owning too many outlets in the same market or more than a certain percentage of, for example, all the TV stations in the country. Under heavy lobbying pressure from major media corporations, and with the ideological backing of the Bush administration, the FCC appears extremely likely to lift, or greatly ease, such restrictions.

In other words, NewsCorp, Disney, Viacom and their peers all believe that their long-term strategy should be to get bigger, to control more of the means of media distribution than less. But AOL Time Warner is already there -- thanks to Steve Case.

Maybe Murdoch, Redstone and Eisner are all wrong. Maybe bigger is not better for the bottom line. Certainly, from a democratic point of view, the consolidation of control over both content and distribution isn't anything to be complacent about.

But the drop in share price for AOL Time Warner doesn't appear to be a referendum on the value of a long-term strategy -- it's a reaction to short-term pain. It's pissed-off executives watching their stock options and 401K plans get hammered. Steve Case is an obvious scapegoat, and maybe getting rid of him will ease some of the suffering. But one has to wonder, if he is as great a bungler as media accounts citing anonymous Time Warner sources are making him out to be, then how exactly did he get to be chairman of the world's largest media corporation? Surely the board of directors of Time Warner had something to do with that.

Brilliant visionary or fumbling clod? That may depend on how much patience you have.

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