Time Warner, which had been drowning in debt at the end of the 1980s, built an impressive stable of traditional media brands like Time, Sports Illustrated and People magazines, cable TV's CNN and HBO, the Warner Bros. film studio and Warner music group, and emerged at the end of the century with worldwide sales in excess of $12 billion.

But at the dawn of a new millennium, it becomes part of a company that has built its reputation on the so-called "new media" of the computer age. Time Warner Chairman and Chief Executive Gerald Levin, successor to old-time entertainment mogul Steve Ross who died in 1992, becomes chief executive of the new AOL Time Warner.

The writing was on the wall last year when independent-minded Warner Bros. studios' co-heads Bob Daly and Terry Semel left after 20 years.

Their departure underscored the transition of Time Warner from an entertainment-based company to a cable and digital company, Variety's Peter Bart wrote at the time. "The balance of power, which once resided in the office of Daly, now ineluctably lies with Levin in New York."

Under Levin, Time Warner could rightly claim to be the world's leading media company, with fingers in multiple media pies, like movie and TV production, cable systems and cable programming such as Turner Entertainment. It also owns baseball's Atlanta Braves and World Championship Wrestling.

Nearly 50 percent of sales are generated through Warner Bros., which produces and distributes programming for feature films, television ("ER," "Friends"), and home video markets.

Time Warner also manages America's largest cable system, serving nearly 13 million subscribers. The company's Home Box Office is the most popular pay television service in the United States, which along with affiliated network Cinemax, has about 35 million subscribers. In addition, TWE owns The WB Television Network — which targets young audiences with programs such as "Dawson's Creek," "Buffy the Vampire Slayer," and the ubiquitous "Pokemon" — and has stakes in cable's Comedy Central and Court TV.

Time Warner owns 75 percent of Time Warner Entertainment; cable firm MediaOne Group owns 25 percent, but terminated its management interest in 1999 in preparation for its purchase by AT&T.;

It's all a far cry from 1989, when Time Inc. and Warner Communications merged in a heavily leveraged deal. In order to reduce debt and generate funds to upgrade cable systems, Time Warner Inc. created TWE in 1992 as a limited partnership to house most of its filmed entertainment and cable business. Japanese companies Toshiba Corp. and Itochu Corp each took 6 percent stakes in the new entity for a combined $1 billion.

In 1993, telecommunications company U S WEST invested $2.5 billion for a 25 percent stake in TWE and Time Warner welcomed its new partner's expertise. But the next year, the two were at odds and Time Warner began looking for ways to reclaim its Warner Bros. and HBO properties while leaving its cable business under the partnership agreement.

TWE entered a cable television joint venture with media conglomerate Advance Publications and Newhouse Broadcasting in 1995. It also sold 51 percent of its Six Flags Theme Parks to Boston Ventures Group for $200 million plus the assumption of $800 million in debt.

That same year, Toshiba and Itochu exchanged their stakes in TWE for Time Warner stock. Time Warner also announced in 1995 that it would acquire Turner Broadcasting System and restructure its entertainment holdings.

Outraged that Time Warner was acquiring TBS for itself instead of TWE, U S WEST sued to block the transaction. Time Warner responded with a countersuit, claiming that U S WEST failed to help upgrade TWE's cable systems.

In 1996 a federal judge rejected U S WEST's suit and by the end of the year Time Warner completed its purchase of TBS. Also in 1996, Road Runner, a high-speed Internet access joint venture between Time Warner and TWE, was launched. The following year TWE announced it would merge Road Runner with U S WEST's MediaOne Express to create the nation's largest broadband online business.

In 1998 Microsoft Corp. and Compaq Computer Corp. invested in Road Runner, each gaining a 10 percent stake. U S WEST changed its name to MediaOne Group in 1998 and after AT&T; announced last year it would purchase MediaOne, the cable company ended its 50 percent management interest (although it still owns 25 percent equity), giving Time Warner complete control of TWE.