"I firmly believe that technological advances in communications are on the verge of significantly altering our way of life. Innovations in telecommunications, especially two-way cable systems, will result in our television sets - big screen of course - becoming an information line, newspaper, school, computer, referendum machine, and catalogue." These are the words of a 21-year-old man trying to get a job in an advertising agency 20 years ago.

That young man, Mr Steve Case, did not get the job. In fact, the jobs he did get back then lacked a great deal of visionary thrust, despite his innovations at Pizza Hut; he came up with new pizza toppings, including pineapple.

But this week, Mr Case got the chance to make good on every futuristic pronouncement he has made since then. And there have been plenty of them.

As the new chairman of America Online-Time Warner, Mr Case now leads a 21st century company whose diversity and potential impact are being touted as the most revolutionary in modern history.

This year will mark the transition of the Internet from technology to mass-media industry, said Mr Paul Saffo, director of the Institute for the Future, a Silicon Valley think-tank. It was an audacious deal, one which Mr Case initiated after he met Time Warner chairman, Mr Gerald Levin, back in September at a meeting of media and technology executives in Paris. It culminated with several bottles of expensive red wine last Thursday after a five-hour dinner at Mr Case's home in Virginia.

On the face of it, the marriage proposal had much going for it, primarily mutual need. Both companies could bring something to the other. Time Warner was an old-line media company whose first product was Time magazine, launched in 1923. Its other 33 magazines include People and Sports Illustrated. It also owns television stations, including CNN, book publishers, sports teams, music and film studios.

Importantly, it has cable television distribution capability and has been laying a US-wide groundwork for high-speed cable modem Internet access.

But the company has had a dismal record trying to break into the Internet.

It has been unsuccessful in translating all that content - news and entertainment - onto the new medium.

AOL, for its part, is one of the first Internet companies actually to make a profit, as it did for the first time in its 15-year history in 1998. With 22 million subscribers, AOL is the US's largest Internet service provider.

But the future of AOL would be stymied, experts said. Without content and without the high-speed connections - just try downloading graphic-heavy web pages or videos on a 56k connection - AOL would be left in the dust.

Hence the attraction, but the deal was still outrageous. Time Warner is as staid as AOL is volatile. The profit margins of each company are also radically different. On revenues of $4.8 billion (€4.6 billion), AOL's after-tax profit was $762 million for 1998. AOL, based in Virginia, has 12,100 employees.

Time Warner, based in New York, had revenues of $26.8 billion but its net profit was only $168 million and it supports 70,000 employees.

An Internet company is simply more profitable and less costly to run. One Time Warner insider, predicting the demise of the print magazines in the not-so-distant future, said: "Remember this figure - Time spent $1 billion last year on paper and postage. Figure it out."

The inference is that delivering news and entertainment via the Web is simply more cost efficient.

That perhaps is why AOL appears to be the leader here, having swallowed up Time Warner.

AOL shareholders will own 55 per cent of the new company. Its stock symbol will be AOL. A key player, and the one that observers say may be most pivotal in the next few years, is AOL vice-chairman Mr Robert Pittman, who will serve as co-chief operating officer.

Mr Pittman is largely credited with founding MTV. He is a master marketer, and in his own words, an aggressive expert on consumers' desires.

So, apart from those Time Warner employees who sat at their desks with their calculators this week, tallying up the newly risen worth of shares in their retirement accounts, what does this mean for the rest of us? In the short term, the biggest effect may be on music.

Instead of buying CDs, an Internet user can have music digitally downloaded directly into the home computer. Or, as the user clicks on AOL, he or she can sample music tracks offered by Warner music, then choose to buy the CD and have it shipped.

For those who think digital downloading of music is in the distant future, glance over to those vinyl record albums. Next, think of movies. You click on AOL, and right before you are Warner Brothers movie previews via video. Sample a few, then go to the theatre. In the future, you might be able to simply download the entire movie. Remember that movie You've Got Mail with Meg Ryan and Tom Hanks? It was produced by Warner Brothers with AOL's co-operation.

You might get your news via CNN and Time delivered right to your computer. You will even be able to customise the news you want. If you are not interested in the Kremlin, you won't have to read about it. News delivery will be able to be customised to individual taste, focusing on sport, entertainment, and finance, for example.

Online shopping and television delivery could also be affected in ways that few of us have even considered. And the merger will also put pressure on European Internet and content providers, which are still fragmented by operating on a nation-by-nation basis.

"It fills me with awe and respect - this is the real thing," Mr Marcus Bicknell, head of European operations for CMGI, a holding company for many Internet providers, told the Wall Street Journal. "It means that you have to get together and get big if you are going to compete."

The delivery of news, information and entertainment is being consolidated into the hands of just a few companies. Aside from concerns about the monopoly on prices, legitimate questions are being raised as to whether such consolidation of power is a good thing for democracy and freedom of exchange.

(Elaine Lafferty, a former Time magazine staff member, has Time Warner shares in her retirement account. Elaine Lafferty is at elainelafferty@ireland.com)