It looks like AOL Time Warner has dodged a bullet.

The leviathan created by Steve Case, Gerald Levin and their fellow power brokers has, in its first quarter as a merged entity, beaten the Street’s estimates of per-share operating income by what financial wizards regard as an all-important 3¢.

Wall Street, deeply grateful for any good news it gets these days, responded by tacking $15 billion or so onto AOL TW’s market value within just a few hours.

Don’t, however, expect the Street to forgive even the slightest misstep 90 or 180 days from now.

May I suggest to the company’s exec team a slightly different approach to managing Wall Street’s expectations?

Explain that your much ballyhooed $11 billion estimate of cash flow for 2001 is, assuming it is achieved, the confluence of a variety of special circumstances.

Tough to sustain

Point out that AOL Time Warner is far too big a company to grow at anything approaching a 30% annual rate on any normalized basis.Those businesses you call content, after all, are not susceptible to being “managed by the numbers.”

Setting arbitrary growth and profitability targets simply won’t work for motion picture and TV production, or music, or even cable nets — unless you have discovered a way to eliminate the fickleness of public tastes from the equation.

While proclaiming such goals may have a hortatory effect on the troops, it won’t be pretty when Wall Street rediscovers this truth: These businesses, when managed to build long-term values, will in the short run prove inescapably volatile.

Even more important, these businesses do not, or at least should not, answer solely to shareholders.

Proper focus

You, as corporate overseers, must keep in mind your primary asset: the people who create for and manage these companies. You also have to answer to the public.

Fortunately, I know from his many public statements, that Gerry Levin shares this view.

Lacking such prior assurances from you, Steve Case, I was enormously relieved to read your bold assertion that “corporations must be run not just for shareholders but also in the public interest”– a statement you made to explain your decision to hang Henry Luce’s portrait in your new office.

“Building shareholder values” may have been the mantra of the ’90s. But I am just enough of an optimist to hope that building audience loyalty may be the touchstone of the coming decade.

Along these lines, may I also point out to all of you, but especially to Jamie Kellner, what a special asset you have under your wing in CNN.

The round-the-clock cabler has built up an extraordinary public trust in its not-quite-21-year history.

The recent flap with China brought this home quite sharply. Not only did its coverage remind serious viewers of the reason it exists, but we got to watch George W. learn from CNN that the crew members were safely out of China.

News over numbers

What Ted Turner and his teammates built over two decades should not be lightly tampered with — not in the name of a short-term boost in ratings, and certainly not in the name of meeting some profit target.

CNN’s operating income last year approached $300 million. I doubt that CBS News, in the heyday of Ed Murrow and Eric Sevareid, produced anything but losses for the parent company.At some point viewers will have had their fill of a barely watchable version of Limbaughish talk radio on Fox News and of following NASDAQ’s minute-by-minute gyrations on CNBC.

With your support, CNN will still be demonstrating that not everything these days has to be dumbed down to draw an audience or even to earn a substantial profit.

Admittedly, CNN has seen its competition proliferate and, for the moment, its ratings falter. If ad revenues dip due to macroeconomic conditions outside anyone’s control, so be it.

Use the opportunity — and a little bit of that $11 billion cash flow — to maintain the standards this island of journalistic integrity has set.

That would honor the memory of Luce, the traditions established by Turner and the public duty of the world’s largest media company. It might even result in higher profit margins in the future.”It’s Only Money” will be on hiatus for several months.