While AOL beat Wall Street estimates this past quarter, it was also revealed that it still has multiple millions people still paying $20 a month for Internet access. How is this possible in 2014?
But as always, the most amazing thing about AOL’s business is the thing that drives AOL’s business: Millions of people, who started paying the company a monthly fee for Internet access more than a decade ago, who continue to pay the company a monthly fee for Internet access, even though they likely aren’t getting Internet access from AOL anymore.
Granted, the whole “instant communications” sector is going through a major upheaval as there are so so many options for people to use these days – Pinger, FaceTime, Facebook IM, Text Messaging, Skype, ooVoo, and on and on – but wow, AOL Instant Messenger’s usage has fallen 64% over the past year.
Whoever is to blame, the truth is that there has been no bigger missed opportunity in the technology business than AOL Instant Messenger. There’s an investor we (ed: SAI) know in New York who swears AOL blew it when it didn’t turn AIM into a full-on Skype competitor.
When I briefly worked at AOL and on the IM product, it was sometimes referred to as AOL’s “800 pound gorilla” because it had so so many registered users that AOL had no idea what to do with. I guess they never figured out what to do with them and now their once dominant market position has eroded in a major way.
Saw this banner at an empty retail space which was once a CompUSA on 6th Ave in NYC.
To paraphrase Pink Floyd. It appears Tim Armstrong is on his way to turning AOL into a content producing machine. That is a big shift from where AOL used to be however it is just the next step in their evolution. The first step was when they bought Advertising.com, the second step was when they acquired Weblogs, Inc. and all their assets. And now, it would not surprise me if they complete the transformation by turning themselves into a prolific content producing machine where their independent blogs such as TMZ and engadget.com become more profitable and prolific than the “mother ship” AOL itself.
I think people are finally waking up to the fact that there is great value in content on the Web and that asset needs to be cultivated and protected. Those that will be able to produce content, accelerate its distribution, and extract value at every turn, will be the most successful in the next evolution of the Web. To me, AOL is a fascinating case study and one that bears watching.
Interesting. Google’s Tim Armstrong was named AOL CEO today. I guess there is still life over at AOL. This will be very interesting to see how this plays out not only at AOL but within the overall online advertising/portal marketplace.
There is a little contentious battle brewing between The Atlantic and the NY Times. The NY Times says it is not going away in May, as was suggested by The Atlantic’s Michael Hirschorn. Yet while its not going away anytime soon, it is an institution that has seen its better days. Be sure to read John Battelle’s post on the future of publishing, which was prompted by the same article.
Here’s an interesting rumor. AOL execs are pursuing merger talks with Microsoft. What an amazing turn of events this would be for Microsoft…to go from courting Yahoo to being courted by AOL.
Now AOL is not anything close to what it used to be. Its transformation into an advertising supported business appears to be flat-lining. Its one “800 lb gorilla” – AOL Instant Messenger appears to have lost about 400 of those pounds with new social networking services like Twitter, Plurk, et al.
Could be an interesting combo. More to come.
I just read the Fast Company article Dead Man Walking, depicting AOL’s recent troubles and missteps. With a tip of the cap to Monty Python, I wonder if a king, queen, or pauper will be riding in to pick up the dead as speculated in the article? Not a pretty picture.
AOL for free? You can’t be serious. I never thought I would see the day. It took them long enough! Its funny when you look at the twists and turns of the Internet portal space and how all the “big boys” have essentially taken different paths but are ending up in the same place. Yahoo, Google and MSN (plus other not so big sites like Lycos, Ask, etc.) have a big lead in the ad market, however the volume of users at AOL can’t be denied.
From my perspective, AOL IM (disclosure: I used to work at AOL on the IM product) is now not the 800 lb. gorilla within AOL, but the 8 ton gorilla. With 35+Million users, this is an engaged audience that AOL needs to actively cross sell in order to get them to expand their usage of other AOL products and services.
I think the most pressing question is: what is everyone going to do with their AOL CD-ROMs?
With much fanfare, AOL has released its new free portal and “MyAOL” service. Granted, it feels like a flasback to 1998 when everyone and their dog were releasing portals. Obviously, it seems that AOL is still coding like its 1999.
Granted its a Beta release, but it appears that AOL (Disclosure: I used to work at AOL) still has some work to do before the portal can be considered completed.
Example, please…you ask. Well, I first loaded up AOL in my favorite Firefox browser. And being that my Firefox has the text set a bit on the small side, the AOL page rendered as it appears on the right hand side here (click through for a larger image). As you can see, the page looks like it has some serious design challenges, with images partially covered, navigation tabs partially covered, ads that are wider than the column they are sitting in, text extending outside of its section, icons that are misaligned.
It gets even worse with Internet Explorer. When AOL’s homepage is rendered in IE, if the text size is set to “smaller”, the two main columns of the page sit on top of each other making the page twice the intended length and nearly imossible to comprehend.
Now to be fair, when you go to most sites (for example, go to Yahoo and increase the browser text size) and adjust the text size larger or smaller, the interface does adjust (expand and contract) with the text size. However, in many cases, the layout of the site follows with the adjustment of the text and keeps the basic integrety of the “normal text” interface. And with well coded CSS driven sites, the text size is pretty much fixed and controlled by the style sheet. Howver, I’ve seen few sites as high profile as AOL degrade so quickly after a single text size adjustment higher or lower within the browser settings.
Has AOL still not figured out that they need to look beyond their “walled garden” when it comes to developing online products? I am rooting for them. I think they have a lot of great products that are overshadowed by the perception that AOL is “internet on training wheels”. I’m looking forward to the Alpha release of this portal!
This week marks my last week working at America Online and living in Northern Virginia. I leave with very mixed emotions. For starters, I am very proud of the fact that I was hired on to work on their market leading Instant Messenger product. In many ways, I feel as though I am leaving unfinished business on the table because there were so many ideas and neat initiatives that I wanted to move forward with. Sometimes when you get so involved in a project or a product of such a scale, you fail take a step back and think about what it is that you are working on. Maybe that’s a good thing. :-) The scope of influence that the AIM product has, and the absolutely insane number of people that it touches, is just mind-boggling. AIM has over 35 million active users…thirty-five million…and vastly more accounts that are inactive.
The people at AOL are absolutely fantastic. Everyone I met was supremely nice, professional and just a pleasure to work with. I always felt comfortable. In my short time here, I made some friends that I hope to keep in touch with in the future (probably via AIM!) and I re-connected with some old friends (old in that I have known them for a while, not that they are actually old in years ;-) who I had not seen in a long time. And as a company, I thought AOL offered a lot of great perks to its employees, and it offered a wonderful work environment. I think there were 2, maybe 3, days in total where I did not want to go into the office. That says a lot.
But, life is not all work. And the reality of the situation is that this was just not the right fit for me and my family from a personal perspective. I thought it would be. I thought that it would be an easier transition down to Virginia than it really was. When we were looking for places to live, something just did not feel right. Maybe it was the high prices for cookie cutter townhouses, maybe it was the traffic, maybe it was the “robo towns” or just being away from Lisa and the kids…whatever it was, it was just not right. My wife and I had always intended to live in the NYC area and be close to our many relatives in that area. Its something that is important to us and for our kids. And in the end, that was a key factor in the decision.
I leave Northern VA with few regrets and enthusiasticaly return to New Jersey and the New York metro area. I will be working in Lower Manhattan starting in early August and I am thrilled to be back working in Manhattan. The commute will be something I will have to adjust to, but I have my iPod to keep me rockin’ and my wonderful wife and kids to go home to.
I’ve been in Virginia for amost two weeks now and I have to say its good. The traffic is definitely heavy most of the time, and much of it is probably due to the vast amount of construction that is going on here. The one item that I am very concerned about is finding a decent neghborhood to live in. I drove up north of Route 7 to the Cascades and I was impressed by that area. It had the best neighborhood feel of any place that I have seen to date. All the houses were new and they all looked the same.