Chicago Tribune from Chicago, Illinois • Page 17

NW 153 Year- No. 11 Chicago Tribune 6 Sections THE AOL-TIME WARNER MERGER TODAY'S TRIBUNE SPORTS Contract mess will be fixed, Daley says Embarrassed mayor orders overhaul of city's purchasing mocha ImteaTO I A. VnK $162 billion marriage joins Internet, cable and content The fight of his life Boxer Tony Ayala Jr. who served prison time for rape, sets his sights on rehabbing his image and his life. BUSINESS Farley removed at Fruit Garment-maker Fruit of the Loom replaces Bill Farley as chairman with board member Sir Brian Wolfson.

Credit card breach Hacker steals 350,000 numbers, posts some on Web site after retailer resists blackmail. f.lETRO Taurus plant may expand Ford's Torrence Avenue operation may add facilities for making auto parts, company executives say. TEMPO By Tim Jones Tribune Media Writer Time Warner created by the world's biggest media merger a decade ago, celebrated its 10th year Monday by announcing it had agreed to be taken over by Internet pioneer America Online Inc. in a record-setting $162 billion stock transaction. The proposed merger of the two communications giants, one a venerable publishing and entertainment business, the other a teenage techno-phenom, indisputably would be the largest in corporate history.

The merger also is a declarationsome would argue a validationthat the Internet will be the primary communications route of the future. Reflecting just how much the communications industry has changed in the past few years, it was AOL that proposed the merger to Time Warner in October, and AOL that is controlling the new company. Analysts said Monday that this major merger, which took Wall Street and even CNN, Time Warner's cable news outlet, by surprise, could set the standard for communications mergers, forcing more telephone companies and traditional media businesses into closer relationships with Internet providers. Consumers shouldn't expect any immediate impact from Monday's announcement because federal regulators will take most and perhaps the remainder of this year to con- See AOL, Page 9 i 4n' A I1' I 'if 1 By Andrew Martin and Laurie Cohen Tribune Staff Writers Mayor Richard Daley on Monday called for an overhaul of the city's Purchasing Department and an audit of payments to a politically connected company that has supplied all of the city's "wrought iron" fencing, in the wake of revelations about billing irregularities. Daley, already on the defensive over disclosures that political insiders reaped benefits from the city's minority contract set-aside program, apologized before a group of reporters, saying his staff should have caught the problems long ago.

"I'm upset with myself," said Daley, who admitted the fences are a pet project. "I'm mad at myself. I'm embarrassed. These things should have, been caught, to be very frank." The Tribune reported Sunday that once G.F. Structures won the city's fence contract in 1997, it was immediately allowed to scrap the prices in its winning bid and charge fees that were far higher.

The company has won more than $55 million in city business since Daley took office in 1989. Daley insisted again that politics played no role in the awarding of the fence contract or in any lack of oversight that may have resulted in overpayments to G.F. Structures. G.F. Structures' owner, Richard C.

Crandall buys commercial insurance from the mayor's brother, John Daley, who considers Crandall a friend. Crandall is also pals with Alexander Grzyb, the city's acting purchasing agent. The Tribune learned Monday that Grzyb's nephew, Adam Wavrunek, works at Builders Chicago, another company owned by Crandall. "Do you think I would jeopardize my career because of somebody using somebody for insurance or anything else?" said Daley, who has historically been angry and defensive when queried about cronyism allegations. "I have billions of dollars of work going out.

None of it can be clouted." Despite his focus on the Purchasing Department, Daley said it was too soon to say if Grzyb's job, or anyone else's, would be jeopardized by the Tribune's findings. Daley said the problems were with the process, "a flawed system that needs fixing." He said he has asked his chief of staff to review all purchasing procedureswith help from Arthur Andersen and other private sector advisers to "guarantee the integrity of the contracting process." Daley also said the city had hired an auditing firm, Alts-chuler, Melvoin and Glasser, to See Daley, Page 11 v. rdf. Reuters photo by Mike Segar AOL's Steve Case (left) and Time Warner's Gerald Levin celebrate the planned merger in New York. 'Blue' streak After a controversial delay, a leaner Dennis Franz returns to ABC with 22 new episodes of "NYPD Blue." create a company with a market capitalization of $350 billion and annual revenue topping $30 billion.

A new media giant America Online's purchase of Time Warner Inc. would A i.l'WIJ WORKING WITH WORKING WITH AOL OWNERSHIP TIME WARNER UP AOL 55X The age of money Time Warner plans to expand cross-promotion of AOL and make a number of promotional offers available to only AOL members. TIME WARNER AOL will feature Time Warner's CNN.com, Entertaindom.com and InStyle magazine content, and provide access to a range of Time Warner products. Operations: Media company combining entertainment, news, telecommunications. Revenue: $26.8 billion 9 Net income: $168 million Name: AOL Time Warner Chairman: Steve Case, AOL chairman, founder CEO: Gerald Levin, Time Warner Chairman, CEO Employees: 79,600 What does it say about a a culture and Operations: Interactive services, Web brands, e-commerce services.

Revenue: $4.8 billion Net income: $762 million time in which Time Warner: 45X Chicago Tribune "Greed" is good and NOTE: Revenue and net income data for AOL are for fiscal year 1999; for Time Warner, fiscal year 1998 Sources: America Online, Time Warner Reuters everyone "Wants to be a Consumers: Bonding of 2 goliaths could be a boon more targeted forms of entertainment and information. AOL has shown a talent for that, said Robert Rosenberg, president of Insight Research a New Jersey-based consultant. "They have something for the 12-year-old girl who collects Beanie Babies and something for her 50-year-old dad who's into auto racing." So what kind of new services might be in the offing? The possibilities sound almost like.sci- See Consumers, Page 8 COMPLETE COVERAGE This risky but exciting merger can't happen soon enough for David Greising. In Business. Steve Case and Gerald Levin are corporate titans with a twist.

Page 8. Execs reach deal after 3 months of talks. Page 9. Get updates throughout the day at chicagotribune.com By Jon Van Tribune Staff Writer Turning on your television set and punching in a request to watch whatever you want say a program on fly fishing in Irelandsoon could be as easy as finding "I Love Lucy" reruns. That's the message to consumers behind Monday's proposed blockbuster merger of new-media upstart America Online Inc.

and old-media giant Time Warner Inc. For years, experts have predicted that television, computers and phones would converge to become a new medium. The moguls at Time Warner and AOL are betting their companies that convergence is ready to happen now. Experts say that, in addition to developing the right technology, the key will be offering content that entices customers. The AOL-Time Warner deal might be the catalyst needed to speed up the introduction of WEATHER Tuesday: Windy; high 37-4 1 Tuesday night: Low 20-27.

Wednesday: Ft. cloudy; high 40. Complete report, Sec. 2, Back Page. DETAILED ftffiEX, PAGE 4 Ghastly ebola unlikely to be last of its land Hk By Paul Salopek Tribune Foreign Correspondent A A THE AILING CONTINENT Last of a three-part series 4 mHE IVINDO RIVER, Gabon-The wind has no name.

But it is a fierce wind, a bad wind, and when it blows down this tar-black jungle river 1997, swiftly killing at least 100 people, or about 8 out of every 10 of its victims. As always, after burning through the local population it subsided back into the jungle without a trace. For all that scientists can manage to decipher of ebola's natural history, it may as well be a mystical wind-one that bodes See Africa, Back Page most people run. Because it turns their eyes the color of i blood. Because the wind kills 1 1 VtA recalled Edjimouagno, 61, one of scores of gold partners who were brought down the Ivindo River in dugouts, vomiting blood and semi-conscious.

"But the next time the wind came they all ran away. The police had to set up roadblocks in the towns, They wanted to run all the wy to the capital" Edjimouagno's harrowing brush with the foul winds of the Ivindo River was actually the world's last recorded outbreak of ebola, Africa's notoriously lethal virus. The fatal germ with the terrifying mystique has howled down the broad, silent river several times now, most recently in I 7 1 JA them. Isidore Edjimouagno knows. He survived the evil wind, though it left him a broken man.

This is his one claim to fame: He breathed the wind and lived. He is a dead man who sits blinking in surprise under the shade trees of his garden. "People thought it was yellow fever at first, and weren't that frightened," The AIDS epidemic threatens political stability in Africa, Vice President Al Gore warns the UN Security Council. Page 11. Tribune photo by Nancy Stone Isidore Edjimouagno and his wife, Charlotte Bamaye, survived an outbreak of the deadly ebola virus along the Ivindo River in Gabon.

7-3.