This is a partial transcript from Your World with Neil Cavuto, August 27, 2001.

NEIL CAVUTO, HOST: In the media world, they are the fiercest of competitors, AOL Time Warner and Microsoft.

Today, they might prove a petri dish for pushing promotion to a whole new level, Toyota Motor Corporation, the one hoping to benefit,launching its 2002 Camry in magazines like TIME and People, all the way to Web services, like MSN and AOL.

I'm just touching on the surface, but here to explain more is AOL Time Warner co-chief operating officer Bob Pittman and, out of L.A., Toyota Motor Corporation's Don Esmond.

Gentlemen, welcome to both of you.

DON ESMOND, TOYOTA MOTOR CORPORATION: Good afternoon, Neil.

CAVUTO: To you first, Bob. This is a multi-platform deal. So essentially, we seen Toyota as across the spectrum. Does that work?

BOB PITTMAN, AOL TIME WARNER CO-CHIEF OPERATING OFFICER: I think so. I think companies like Toyota are really pushing us to do what we should do, which is we have got this array of media assets.

They should expect a company like ours to e able to pull them together for their benefit and coordinate them and take responsibilities for coordinating it.

And I think what you see with Toyota is really the way media, we think, is going to be bought in the future and the kind of partnerships that will be struck, as we will have companies like Toyota that say it's very important that I launch this new product, it is critical to the success of the company, and therefore, I want to go with the folks who have the most control over their media who can guarantee us coordination and who will help us pull this together in a very coordinated way.

I think the fact they do it with only a few companies is, indeed, indicative of where we see the trends going.

CAVUTO: Don, are you afraid of over-saturating yourself?

ESMOND: We don't think so. Neil, we are, actually, very excited.

Toyota Camry's been the number-one selling car in the United States for the last four years, and we've just made it better.

It's larger, with a more powerful engine, better performance, a new four-cylinder engine, 20 percent more horsepower, yet better fuel economy.

CAVUTO: Wait a minute, is Fox part of that ad campaign. I was just curious.

So in other words, you think it is not a matter of robbing Peter to pay Paul.

Even though you are on a lot of platforms, it's not as if you're hitting people too much, right?

ESMOND: We are trying to look at a broader-based consumer, and certainly, in doing that, we have to utilize our media -- not only broadcast, but cable; certainly Web, Internet; and print. We are looking across all of our media and partnering with some very good companies.

CAVUTO: Bob, you did a similar deal like this with Bank of America, right? Is this the wave of the future, these triple-digit million dollar deals, where, all of a sudden, you are promising a platform second to none?

PITTMAN: I think so, and I think that is what the advertisers are looking for. In the past, these assets have been together in one company, but we have not had the mechanism to pull them together for the use of that advertising partner, and I think today, with the money they are spending, they can say,

Hey, we want to you step up; they do not want to have to put all the pieces together themselves and take the risk on execution. They want us to take the risk on execution.

CAVUTO: You could flip it around and say tough times beget tough deals. Is this your way of saying any individual on its own couldn't cut it.

We had to throw in Custer and all of the troops to make it work.

PITTMAN: I think we have leadership positions in all of these businesses we are in, but I do think there is a premium if you can give the advertiser a premium. They are not going to pay you for nothing.

They are going to pay you only if you do something that has real value to them. And I think if you are launching a product, that's what advertising is here for.

To help you launch it, you want to make sure you are getting maximum efficiency and maximum effectiveness. I see this trend going along.

CAVUTO: It's a bad trend, though. Advertising has not been a great trend.

PITTMAN: No, I think what you are finding in advertising is that advertising isn't one trend. I think you are finding a certain amount of flight to quality, flight to the folks who you know can deliver, flight to the sure thing. Fortunately for us, we happen to be in one of those positions.

CAVUTO: Yes, but the advertising environment itself is still, at best, dicey, so you almost have to do these gargantuan deals to make it worth while.

PITTMAN: I think you can't do business as usual and take a three-month vacation and have all of the numbers come in. You truly have to work with the advertisers.

And I think, by the way, it depends on swings a bit. I think, a year ago, if you talked to advertisers, they would say I can't get anybody to return my call.

CAVUTO: But you came in, Bob, very quickly trying to write the shot. A lot of the changes we are seeing have your fingerprints on them.

But having said that, a lot of the layoffs that we have seen, the AOL Time Warner layoffs -- is that the extent of it, the few thousand we've seen let go to date? Is that it?

PITTMAN: When we came in to the company, remember what the folks were worried about a year ago: Can you really make this company into one company?

So I think when you see things, as unfortunate as they are for human dimension of layoffs, what this says is, yes, we are making this into one company...

CAVUTO: Is that it, though? Is this the extent of the pain now?

PITTMAN: I think it's an ongoing process.

I think, as Barry Schuler said, at AOL, when somebody asked him, look, every year we do this. This is not unusual.

Every year, we take a hard look at our business and ask, Where are we? Are there assets we can use from the rest of AOL Time Warner that is part of decision.

CAVUTO: Is CNN part of that, but the way?

PITTMAN: CN what? Come on -- this is your competition.

I think CNN has really, with Walter Isaacson going in, taken that franchise, revitalized it -- I think Walter's make the decisions about where he wants to put the assets.

And I think the fact of what he has doing with Headline News has been terribly...

(CROSSTALK)

CAVUTO: The Headline News thing -- the quick change, meeting with some other Republican Party chieftains and all -is this part of a design to make CNN deem more fair and balanced?

PITTMAN: Is Rupert talking to you? (CROSSTALK)

CAVUTO: I am just curious.

PITTMAN: I think it is the fair and balanced network. I think the good news about CNN is that they have done 25 years of building the franchise the good old-fashioned way, which is trust, reliability, authority, and I think that what Walter is doing, and Jamie too, is going in and saying we have two networks, we do not have to make the decision about going in depth on one network versus keep the news going -- we've got two networks to do it. Thank you for plug.  (CROSSTALK)

CAVUTO: Don, real quickly, is this a recession, or are we are over it now?

ESMOND: Neil, for the car business, it looks like markets are down from last year, but it is about 16.7 million, and frankly, that's the third-best market we have had.

So we are still looking for a good year, and I think great products are going to determine that.

CAVUTO: Don Esmond and Bob Pittman, thank you very much.

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