Steve Case resigned from Time Warner's ( TWX) board, citing the need to tend to his modestly named new health care services company, Revolution.

The move comes more than two years after Case left the executive ranks of the New York media giant. Case was chairman at the company that was then called AOL Time Warner for two years after leading America Online to great success in the 1990s.

Case's resignation won't draw any tears on the part of Time Warner shareholders, who have seen their stock plunge over the five years since the merger was proposed. When the merger of America Online and Time Warner was proposed in January 2000, the transaction was billed as "the digital transformation of Time Warner" by then-Time Warner Chairman Jerry Levin, and as the spark of "the next Internet revolution" by Case.

But after the deal closed in January 2001, the course of events failed to fulfill the vision. Amid the collapse of the dot-com boom, allegations of inflated revenue recognition and declining numbers in AOL's once-booming subscriber counts, AOL's poor performance translated into serial financial disappointments for Time Warner. Rather than becoming the magic new-media ingredient in an old media company comprising cable systems, TV networks, a film studio and a stable of magazines, AOL became just another division -- an underperforming one at that.

Even so, Case's departure comes at a time of relative good news at AOL. The online service continues to hemorrhage subscribers in its core dial-up Internet service business, but AOL's Web sites have lately become a key strategic property in the fast-shifting online landscape. Just this fall, rivals as huge and far flung as Google ( GOOG), Comcast ( CMCSA), Microsoft ( MSFT) and Yahoo! ( YHOO) have entered talks over possible investments in AOL.

Last week, Time Warner signed AOL chief Jon Miller to a new three-year contract. Under Miller's leadership, AOL's reputation has improved with investors. Though the business continues to hemorrhage dial-up subscribers, losing 917,000 in the U.S. in the latest quarter, it is gaining advertising dollars as companies shift their spending online. AOL's second-quarter advertising sales rose 45% to $320 million in the second quarter. The unit also has put many of the features that were once available only to AOL members on its Web site, AOL.com, which started last year. An advertising campaign for AOL.com began earlier this month.

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