America Online and Time Warner Will Merge to Create World's First Internet-age Media and Communications Company.

     Business Editors

     DULLES, Va. and NEW YORK--(BUSINESS WIRE)--January 10, 2000--

              AOL Time Warner Will Be Premier Global Company
     Delivering Branded Information, Entertainment and Communications
    Across Rapidly Converging Media Platforms and Changing Technology

            Will Provide Far-Reaching Benefits to Consumers
               By Speeding Growth of Interactive Medium

    Will Accelerate Availability of Broadband Interactive Services
              Offering Vast Array of World-Class Content

            Will Drive Growth of Advertising and E-Commerce
            Across Unmatched Combination of Leading Brands

                Companies Also Announce New Marketing,
             Commerce, Content and Promotional Agreements


     America Online, Inc. [NYSE:AOL] and Time Warner Inc. [NYSE:TWX]
today announced a strategic merger of equals to create the world's
first fully integrated media and communications company for the
Internet Century in an all-stock combination valued at $350 billion.
     To be named AOL Time Warner Inc. with combined revenues of over
$30 billion, this unique new enterprise will be the premier global
company delivering branded information, entertainment and
communications services across rapidly converging media platforms.
     The merger will combine Time Warner's vast array of world-class
media, entertainment and news brands and its technologically advanced
broadband delivery systems with America Online's extensive Internet
franchises, technology and infrastructure, including the world's
premier consumer online brands, the largest community in cyberspace,
and unmatched e-commerce capabilities. AOL Time Warner's unparalleled
resources of creative and journalistic talent, technology assets and
expertise, and management experience will enable the new company to
dramatically enhance consumers' access to the broadest selection of
high-quality content and interactive services.
     By merging the world's leading Internet and media companies, AOL
Time Warner will be uniquely positioned to speed the development of
the interactive medium and the growth of all its businesses. The new
company will provide an important new broadband distribution platform
for America Online's interactive services and drive subscriber growth
through cross-marketing with Time Warner's pre-eminent brands.
     AOL Time Warner's brands will include AOL, Time, CNN, CompuServe,
Warner Bros., Netscape, Sports Illustrated, People, HBO, ICQ, AOL
Instant Messenger, AOL MovieFone, TBS, TNT, Cartoon Network, Digital
City, Warner Music Group, Spinner, Winamp, Fortune, AOL.COM,
Entertainment Weekly, and Looney Tunes. In addition to fully
integrating its brands into a digital environment and bringing them
closer to consumers, AOL Time Warner will have a wealth of creative
resources to develop products specifically suited to interactive
media.
     Under the terms of a definitive merger agreement approved by
unanimous votes at meetings of each company's board of directors, Time
Warner and America Online stock will be converted to AOL Time Warner
stock at fixed exchange ratios. The Time Warner shareholders will
receive 1.5 shares of AOL Time Warner for each share of Time Warner
stock they own. America Online shareholders will receive one share of
AOL Time Warner stock for each share of America Online stock they own.
The merger will be effected on a tax-free basis to shareholders. When
complete, America Online's shareholders will own approximately 55% and
Time Warner's shareholders will own approximately 45% of the new
company. The stock will be traded under the symbol AOL on the New York
Stock Exchange.
     The merger will be accounted for as a purchase transaction and is
expected to be accretive to America Online's cash earnings per share
before the amortization of goodwill. This transaction is subject to
certain closing conditions, including regulatory approvals and the
approval of America Online and Time Warner shareholders, and is
expected to close by the end of the year. Mr. Ted Turner, Vice
Chairman of Time Warner, has agreed to vote his Time Warner shares,
representing approximately 9% of the company's outstanding common
stock, in favor of the merger.
     Steve Case, Chairman and Chief Executive Officer of America
Online, will become Chairman of the Board of the new company. Gerald
M. Levin, Time Warner's Chairman and Chief Executive Officer, will
become AOL Time Warner's Chief Executive Officer. As Chairman, Mr.
Case will play an active role in helping to build and lead AOL Time
Warner, focusing particularly on the technological developments and
policy initiatives driving the global expansion of the interactive
medium. As Chief Executive Officer, Mr. Levin will set the company's
strategy, working closely with Mr. Case, and will oversee the
management of the company. Mr. Levin will report to the board
consisting of 16 members, with eight appointed by each of the current
America Online and Time Warner boards.
     Mr. Turner will become Vice Chairman of AOL Time Warner.  Time
Warner President Richard Parsons and America Online President and
Chief Operating Officer Bob Pittman will be co-Chief Operating
Officers of AOL Time Warner.  J. Michael Kelly, Senior Vice President
and Chief Financial Officer of America Online, will become the new
company's Chief Financial Officer and Executive Vice President.  A
four-person integration committee, composed of Messrs. Pittman;
Parsons; Kenneth J. Novack, America Online's Vice Chairman; and
Richard Bressler, Chairman and Chief Executive Officer of Time Warner
Digital Media, has been formed to ensure a smooth and rapid
combination of the two companies.  The Committee will make its
recommendations to Messrs. Case and Levin.  Messrs. Parsons, Pittman
and Kelly will report to Mr. Levin.

Building a New Medium for the New Millennium

     Mr. Case said: "This is an historic moment in which new media has
truly come of age. We've always said that America Online's mission is
to make the Internet as central to people's lives as the telephone and
television, and even more valuable, and this is a once-in-a-lifetime
opportunity to turn this promise into reality. We're kicking off the
new century with a unique new company that has unparalleled assets and
the ability to have a profoundly positive impact on society. By
joining forces with Time Warner, we will fundamentally change the way
people get information, communicate with others, buy products and are
entertained - providing far-reaching benefits to our customers and
shareholders.
     Mr. Case added: "We have tremendous respect for Jerry Levin and
Time Warner management, who have built the world's pre-eminent media
company and have fostered an entrepreneurial culture that will mesh
well with our own. Time Warner is the first major media company to not
only recognize, but also fully embrace the interactive medium. I look
forward to working with them to build the most valued and respected
company in the world. By mobilizing the combined creative energies and
extraordinary management talent of both companies, we will bring
customers around the world an unmatched array of interactive services,
with enriched multi-media content and e-commerce opportunities."
     Mr. Levin said: "This strategic combination with AOL accelerates
the digital transformation of Time Warner by giving our creative and
content businesses the widest possible canvas. The digital revolution
has already begun to create unprecedented and instantaneous access to
every form of media and to unleash immense possibilities for economic
growth, human understanding and creative expression. AOL Time Warner
will lead this transformation, improving the lives of consumers
worldwide."
     Mr. Levin added:  "I look forward to partnering with Steve Case
- a visionary leader of the Internet - and his impressive management
team.  The opportunities are limitless for everyone connected to AOL
Time Warner - shareholders, consumers, advertisers, the creative and
talented people who drive our success, and the global audiences we
serve."
     Mr. Pittman said: "The value of this merger lies not only in what
it is today but in what it will be in the future. We believe that AOL
Time Warner will provide companies worldwide with a convenient,
one-stop way to put advertising and commerce online as well as take
advantage of the best in traditional marketing. We will accelerate the
development of Time Warner's cable broadband assets by bringing AOL's
hallmark ease-of-use to this platform. We expect America Online to
help drive the growth of cable broadband audiences, and we will use
our combined infrastructure and cross-promotional strengths to enhance
the growth and development of both America Online and Time Warner
brands around the world."
     Mr. Parsons said: "This is a defining event for Time Warner and
America Online as well as a pivotal moment in the unfolding of the
Internet age. By joining the resources and talents of these two highly
creative companies, we can accelerate the development and deployment
of a whole new generation of interactive services and content. The
heightened competition and expanded choices this will bring about will
be of great benefit to consumers. For the creative and innovative
people who are the lifeblood of our companies, it means a truly
exciting range of new opportunities to explore and give shape to. For
our shareholders, it means we'll be able to grow in ways we couldn't
have as separate companies, producing superior returns in both the
short and long term."

New Marketing, Commerce, Content and Promotional Agreements

     Separate from the merger transaction, America Online and Time
Warner also announced new marketing, commerce, content and promotional
agreements that will immediately expand various relationships already
in place between the two companies. These include:

--   The AOL service will feature Time Warner's popular InStyle
     magazine, expanding on the popular content Time Warner already
     offers AOL members from People, Teen People, Entertainment Weekly
     and other content currently on the service.

--   CNN.com and Entertaindom.com programming will be featured
     prominently on various America Online services.

--   AOL members will have access to a wide range of Time Warner
     promotional music clips from Time Warner's unparalleled selection
     of popular artists.

--   Time Warner and AOL MovieFone will participate in online-offline
     cross-promotion of Time Warner movies and related content,
     including live events.

--   Broadband CNN news content will be distributed on AOL Plus, the
     rich media content offering designed for AOL members connecting
     via broadband, when it launches this spring.

--   Time Warner will offer a number of special offers exclusively for
     AOL members, which will include everything from discounts on
     magazine subscriptions to premium cable subscriptions and movie
     passes.

--   Building on the companies' current offline cross-promotional
     activities, including keywords on popular magazines like People
     and Teen People, Time Warner will dramatically expand
     cross-promotion of AOL in a number of their top offline media
     properties.

--   The popular Warner Bros. retail stores will promote the AOL
     service, including through the in-store distribution of AOL
     disks.

--   Time Warner will include AOL disks in promotional mailings and
     product shipments.

--   America Online will make available on Road Runner popular America
     Online brands and products, including AOL Instant Messenger,
     Digital City, AOL Search and AOL MovieFone.

     The companies also said, with respect to broadband access, that
AOL Time Warner will be committed to ensuring consumer choice of ISPs
and content and that they hope this merger will persuade all companies
operating broadband platforms to provide consumers with real choice.

Combination Creates Full Range of Growth Opportunities

     In addition to today's announcements, America Online and Time
Warner will have many other opportunities to combine their assets to
create unique new expanded services to drive increased consumer usage,
and marketing and promotion capabilities to fuel rapid growth for
their shareholders and employees. These, among others, include:
     Music: The combination of Time Warner's prestigious music labels
and roster of established stars and new artists with America Online's
online marketing and e-commerce capacities will create powerful music
destinations.
     Entertainment: America Online's AOL TV and MovieFone combined
with Time Warner's cable networks and Warner Bros. movies and
television will provide valuable programming, cross-promotional,
and e-commerce opportunities.
     Broadband: AOL Time Warner's ability to offer the finest content
will expand the already growing number of consumers seeking to access
the Internet at high speeds via cable modem, DSL, wireless or
satellite.
     News: AOL Time Warner will continue to enhance its online news
offering with the world's most recognized and respected news media,
including CNN, Time, and local all-news channels such as NY1 News.
     Technology: AOL Time Warner will be able to develop and leverage
technology across all of the businesses, creating new opportunities
to expand services and share infrastructure.
     Telephony: For businesses and consumers, AOL Time Warner will
offer a major communications platform that combines America Online's
popular instant messaging products with Time Warner's ability to offer
local telephony over cable.

About America Online, Inc.

     Founded in 1985, America Online, Inc., based in Dulles, Virginia,
is the world's leader in interactive services, Web brands, Internet
technologies, and e-commerce services. America Online, Inc. operates:
two worldwide Internet services, America Online, with more than 20
million members, and CompuServe, with more than 2.2 million members;
several leading Internet brands including ICQ, AOL Instant Messenger
and Digital City, Inc.; the Netscape Netcenter and AOL.COM portals;
the Netscape Navigator and Communicator browsers; AOL MovieFone, the
nation's # 1 movie listing guide and ticketing service; and Spinner
Networks and NullSoft, Inc., leaders in Internet music. Through its
strategic alliance with Sun Microsystems, the company develops and
offers easy-to-deploy, end-to-end e-commerce and enterprise solutions
for companies operating in the Net Economy.

About Time Warner Inc.

     Time Warner Inc. (NYSE: TWX, www.timewarner.com) is the world's
leading media company. Its businesses: cable networks, publishing,
music, filmed entertainment, cable and digital media.

Editor's Note:

An audio feed of the America Online/Time Warner press conference at 11
am EST Monday, January 10, 2000 will be available to the media by
calling 888-469-1386 (US) or 1-712-271-0747 (international) -
Password: AOL.

Webcasts of the press conference will be available at
http://www.corp.aol.com/cgi/announce.html and
http://www.timewarner.com

A live satellite feed will begin Monday at 6:45 am EST with logos
and b-roll of both companies being broadcast
until approximately 11:00 am EST. At that time, live coverage of the
press conference including the question-and-answer session will begin.
After the live broadcast, the companies' logos and b-roll, as well as
selected highlights of the press conference, will be re-broadcast
(1:00-3:00 pm EST).

Satellite Coordinates: Galaxy 7, Transponder 2,
C-Band Downlink Frequency 3740 Vertical.

This release contains forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These statements are based on management's current
expectations or beliefs and are subject to a number of factors and
uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. The forward-
looking statements in this release address the following subjects:
expected date of closing the merger; future financial and operating
results; and timing and benefits of the merger.

The following factors, among others, could cause actual results
to differ materially from those described in the forward-looking
statements: the risk that the America Online's and Time Warner's
businesses will not be integrated successfully; costs related to the
merger; failure of the America Online or Time Warner stockholders to
approve the merger; inability to obtain, or meet conditions imposed
for, governmental approvals for the merger; inability to further
identify, develop and achieve commercial success for new products,
services and technologies; increased competition and its effects on
pricing, spending, third-party relationships, the subscriber base and
revenues; inability to establish and maintain relationships with
commerce, advertising, marketing, technology and content providers;
risk of accepting warrants in certain agreements; risks of new and
changing regulation in the U.S. and internationally.

For a detailed discussion of these and other cautionary
statements, please refer to America Online's filings with the
Securities and Exchange Commission, especially in the "Forward-Looking
Statements" section of the Management's Discussion and Analysis
section of the Company's Form 10-K for the fiscal year ended June 30,
1999 and the Risk Factors section of the Company's S-3 filing that
became effective in November 1999, and Time Warner's filings with the
Securities and Exchange Commission, including the section titled
"Caution Concerning Forward-Looking Statements" of the Management's
Discussion and Analysis in its Form 10-K for the year ended December
31, 1998.

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AOL Time Warner: World's First Internet-Age Media and Communications
Company

       America Online, Inc.                       Time Warner Inc.

                          Companies At a Glance


Headquarters:  Dulles, VA             Headquarters:  New York City, NY
Founded 1985                          Formed in 1990
Employees: 12,100                     Employees: 70,000
FY 1999 revenue:  $4.8 billion        1998 revenue:  $26.8 billion
FY 1999 net income:  $762.0 million   1998 net income:  $168 million
AOL:  2.35 billion shares outstanding TWX:  1.5 billion fully diluted
                                      shares outstanding
Market Value:  $164 billion           Market Value:  $97 billion

               Strength in Every Segment of the Media Value Chain

World's largest online service             Strongest franchises in TV
                                           entertainment
Services in 15 countries and 7 languages   World's foremost news
                                           brand - CNN
World's largest dial-up narrowband network Most successful premium TV
                                           network - HBO
Leading interactive technology development Foremost creator of
                                           publishing brands
Most popular e-commerce platform           Leading global music
                                           company
No. 1 downloaded music player              International leader in
                                           filmed entertainment
No. 1 and No. 2 Instant Messaging
products                                   Most technologically
                                           advanced cable systems

                   Reaching Audiences Around the World

20 million AOL members                     1 billion with access to a
                                           CNN service
2.2 million CompuServe members             35 million HBO U.S.
                                           subscribers
3.4 million international members          120 million magazine
                                           readers
50 million AIM users                       13 million cable
                                           subscribers
50 million ICQ registrants                 3 of 5 top-rated
                                           basic-cable networks
20 million Netcenter registrants           320,000+ Road Runner
                                           customers
1.4 million simultaneous online users

                    World-Class Brands and Businesses

America Online                            HBO
CompuServe                                CNN
Netscape                                  TNT
ICQ                                       Cartoon Network
AOL MovieFone                             Time
AOL Instant                               People
   Messenger                              Sports Illustrated
Digital City                              Warner Music
Spinner                                   Warner Bros.
Winamp                                    The WB
                                          Looney Tunes
                                          Time Warner Cable
                                          Road Runner
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     --30--eb/ny*

     CONTACT: Tricia Primrose
              [phone]
              [e-mail]
                     or
              Edward Adler
              [phone]
              [e-mail]

     KEYWORD:  VIRGINIA
     INDUSTRY KEYWORD:  COMPUTERS/ELECTRONICS TELECOMMUNICATIONS
INTERNET ENTERTAINMENT E-COMMERCE MERGERS/ACQ