America Online co-founder Steve Case, who orchestrated his company's often-ridiculed merger with Time Warner, resigned from the media giant's...

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America Online co-founder Steve Case, who orchestrated his company’s often-ridiculed merger with Time Warner, resigned from the media giant’s board Monday — just as the era of digital entertainment he envisioned is taking shape.

Case’s departure from Time Warner comes as AOL’s stature within the company has grown. Once a weight around Time Warner’s neck, AOL now is seen as crucial to delivering Time Warner’s vast array of content, and competitors such as Microsoft and Google are vying to buy a minority share.

“Over the past few months, I have been pleased to see a renewed focus on AOL at Time Warner, and the emergence of so many strategic alternatives,” said Case, who stepped down as chairman two years ago but remains one of Time Warner’s biggest individual shareholders.

He said he was resigning to devote more time to Revolution, the company he launched in April to finance health-care and lifestyle businesses, including Seattle-based Flexcar.

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“Leaving Time Warner’s board,” he said, “will give me a greater opportunity to grow Revolution, including avoiding any potential conflicts of interest as Revolution moves into new areas.”

But analysts were split in their interpretation of Case’s departure.

“Our guess is, it means the board of Time Warner has decided definitively to sell a piece of AOL, and that has upset Steve Case,” said Laura Martin, senior media analyst with Soleil/Media Metrics.

Under pressure to boost its stock price, Time Warner is negotiating with Microsoft and with Google for a stake in AOL.

A person close to Time Warner suggested that AOL’s negotiations played a secondary role in Case’s decision to step down. Case was not opposed to such a deal, the person said, but apparently felt he wouldn’t have much voice in setting AOL’s course.

However, Mark Stahlman, technology strategist for Caris & Co., said he takes Case at his word.

People of Case’s stature often stay at a company until they feel it’s finally pointed in the right direction, the analyst said.