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  • AOL: Opening the Last Barrier

    June 25th, 2005

    In the fall of 1989, I received a floppy disk in the mail, along with material promoting a new online service. At the time, I was enduring the high prices of CompuServe, since it was the best game in town, but I was sorely tempted by the lower price offered by America Online, then a Mac only service.

    At the beginning, it was a lonely place, and there wasn’t a whole lot of content, but it was simple to navigate, and, like others, I soon discovered the message boards. Over time, those message boards developed into a wonderful outlet for Mac users to get advice, trade troubleshooting tips and just stay in touch with one another. I got sucked in and, before long, one of the producers at AOL offered me a free account in exchange for becoming a forum person.

    In those days, AOL was a universe unto itself. You could only send mail to fellow members, and, from your vantage point, there was no such thing as an Internet, since you were shut off from the rest of the world.

    Over the years, AOL gradually opened its borders and allowed you to communicate with outsiders. The rest of the Internet features you now take for granted were gradually phased in, and AOL became king of the online universe, big time.

    Today, AOL is still number one, and number two is way, way behind in membership, but people are leaving the service in droves. Like other Internet companies during the dot.com boom, AOL had an artificially inflated cash value, sufficient to allow it to take over Time Warner. Of course, the folks at Time Warner eventually realized they were snookered, and they’re now in charge. With membership and income hemorrhaging, AOL had to find a new financial model, and that was to become like Yahoo and allow everyone to access its content, while deriving more and more of its income from advertising.

    The other day, a friend, who was still part of AOL’s forum staff, was notified that the program was being axed. Yes, you can still sign up with AOL and use its proprietary software to experience a sanitized version of the Internet, but it’s no longer necessary. If you want most of what AOL has to offer, just visit its aol.com portal. That includes its message boards and information centers. Need an AOL or AIM user name? It’s free for the asking.

    Over the next few months, pretty much all of AOL’s proprietary content will become part of its Web portal. Most of it is there now and that includes its message boards, which are apparently no longer going to be monitored by a staff of volunteers. Pity, because it means that visitors won’t be protected from unsavory characters, but how many of you actually bother with message boards these days?

    On the other hand, millions still use AIM for instant messaging, and chances are that your kids are part of the crowd. In fact, it’s still very common for children to come home from school, fire up their personal computers, and launch their instant messaging software. They talk to their friends online and, when it’s time to use the phone, remember that land lines are relics of the past. Your kids will just take their cell phones out of their backpacks and quickly use up your monthly minute allotment.

    AOL, by the way, is working hard to develop new income streams. In addition to ads, it has created an Internet phone service that’s integrated with its online software. But Mac users, who once ruled the roost at AOL, have played second fiddle for years, and some of its content, such as AOL Radio, remain Windows only. In fact, AOL Radio doesn’t even work with Firefox, part of AOL’s Mozilla spin-off. But that will come, although it’s not certain whether Mac users will be supported.

    But does it really matter? Is AOL just late to the game, or will its content be compelling enough to garner enough traffic to keep advertisers happy? Right now, the picture seems somewhat encouraging, as AOL is indeed deriving more and more of its income from ads, while members rapidly depart and select faster, cheaper online alternatives. One of those alternatives, by the way, is AOL’s own Netscape service, which is $9.95 per month but, alas, also restricted to the Windows platform.

    AOL’s future, however, is by no means certain. While AIM instant messaging seems destined to remain popular for the foreseeable future, I wonder how many folks will consider deserting Yahoo and Google in favor of AOL?

    In a way, I miss the old days, but even then AOL was slow to catch up with the rest of the world. That may still be the case, and maybe some day, AOL will itself be history. But maybe Time Warner’s executives will be glad to finally get rid of that albatross once and for all.



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