I was an analyst (yes, on the dark side) following the large cable and media companies when Dick Parsons took the helm of what was then AOL Time Warner in 2002. The company, which is now known again as just Time Warner (NYSE:TWX), had been through something of a fiasco, primarily involving a questionable media combination about a year earlier that had been billed as easily superior to sliced bread.

As I've told Fools in the past, I well recall mingling with hundreds of analysts and institutional investors who were huddled together in a New York hotel in 2001 as the virtues of this new combination were extolled by AOL Chairman Steve Case and his minions and by then-Time Warner CEO Jerry Levin and his own charges. The mantra was that this was to be a wonderful and "synergistic" coming together of new media and old media, and that it would benefit both mightily. And it probably did -- for a matter of months.

But then things began to crumble. The management team of the new company, which had largely been composed of AOL types (most of whom were not oozing humility), began to fall away as their unit started to falter. At precisely the same time, the inherent strength of many of the Time Warner old-media units seemingly rose from the ashes. It didn't take long before the Time Warner crew had retrieved the top positions throughout the company.

What does all of this tell Fools about Parsons' performance and about the future of Time Warner? To be honest, Parsons' takeoff at the company took longer than I would have liked. But then, he'd inherited a chaotic situation, including almost certain turf wars between the managers of the two recently combined companies, along with the difficulties created by the figurative air rushing out of the AOL balloon.

Over the past few years, however, Parsons' handiwork has become more and more apparent, and while nobody, not even former GE (NYSE:GE) CEO Jack Welch, can single-handedly manage a company the size of Time Warner -- or GE, for that matter -- it's fair to say that Parsons has set an extremely positive tone at the company. In many respects, the Time Warner of today is looking like a finely tuned media machine.

During the past several months, its Time Warner Cable operation -- which is second in the industry in subscribers, trailing only Comcast (NASDAQ:CMCSA) -- has been prepared for a spin-off that is now occurring; its Time Inc. magazine unit is being pared of its underachievers; and its Warner Brothers film and television production unit cleaned up Sunday at the Academy Awards presentation. Further, the company has bought back a slug of its own stock during the past year, and its share price has risen more than 20% since February 2006.

That's not to say that there are no remaining challenges for Parsons. He must get on with the naming of his successor -- almost certainly Jeff Bewkes, the company's president and chief operating officer -- and he'll have to ante up $405 million to settle claims by shareholders related to past accounting problems at AOL. But the Time Warner of today feels so very much more solid than it did five years ago. I'd urge Fools with big media on their mind to resolutely keep it in their sights.

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Fool contributor David Lee Smith does not own shares of any of the companies mentioned. He welcomes your comments or questions. The Fool's disclosure policy will never mail you unsolicited CD-ROMs.