AOL blues
It's always seemed clear to me that AOL acquired its gajillions of members because, in an era when connecting to the Internet seemed to require a computer science degree, the ubiquitous AOL disk provided a no-hassle connection path. That business isn't growing the way it used to, though. And meanwhile, AOL's ad revenue is declining too, as the company reaches the end of big contracts entered into during the bubble years. (What's astonishing is that AOL might still have any deals in place from that era that its partners haven't pulled out of or renegotiated.)
So today AOL held a big dog-and-pony show in New York to try to convince Wall Street that it still has a future, and to try to tell the world what it will do next. I wasn't there, but I've now read several press accounts, and all I can say is, huh? It appears that AOL wants to back off from its role as ISP and instead become a provider of premium content and services -- so that you'd pay a cable company or phone company for broadband at probably $40 a month, and then you'd pay AOL another $15 a month for its service.
Why on earth would one do so? I suppose there are plenty of people willing to pay that much to keep their beloved screen names and maintain their AOL e-mail addresses. And AOL appears to be seizing a variety of Time Warner properties and removing them from general Web access, making them only available via AOL -- according to the New York Times, "the online editions of Entertainment Weekly, People, Teen People, InStyle, Time for Kids and Sports Illustrated for Kids."
Well, maybe that will be attractive to several million of AOL's current subscribers. But it hardly seems like a "growth business" -- which may be why AOL also plans, according to accounts, on trying to find innovative ways to squeeze more money from each subscriber each month.
All of this carries with it a whiff of desperation and, really, a lack of imagination. Surely the company that connects more people to the Internet than anyone else -- 34 million or so -- must have more up its sleeve.
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