Too Little, Too Late

In the early days on the internet, folks had dialup access. In many cases, their service provider was America Online, aka: AOL. For some less tech savvy folks, AOL was practically synonymous with the internet. AOL provided a fair amount of content, and encouraged users to play in the safety of their backyard, and not explore the chaotic world of "the world wide web."

AOL had a strong market share. I know more than one user that started with AOL, but then wanted to go to broadband, but keep their email account. AOL was only happy to let him keep the account for a mere $5 a month. As the email account was worth paying for for him, he begrudgingly paid for it.

Then there were the discs. AOL would send me at least one a month, and often more than that. They were shiny, and came packaged in a variety of cases. I even got a few in a metal box. They were emblazoned with "Free Trial" on them. Some even included some free software, but it was never anything of any use to anyone.

The world was moving to broadband, and AOL was stuck in a rut. Instead of remaining competitive, they raised their prices. I can't imagine who was willing to pay over $20 a month for dialup access, but millions did. Finally as DSL has become more affordable, AOL simply can't compete at those price points.

As members decided to cancel, we ended up with the mafia running the call center at AOL. Stories abounded of folks unable to cancel their AOL account. I personally know more than one former AOL user that had to call in three consecutive months to cancel their account. As the users fled, AOL tried to hold onto them for one more month. Clearly their influence was waning, and suscriber base was fleeing in droves.

So now, AOL wants to reinvent themselves. Personally, I doubt it will be all that successful. At least they lowered the monthly fee to $9.95 which matches the NetZero rate. They are giving away their email accounts. However, this is no great achievement as there are countless places to get a free email account, and there have been for over a decade. They are going to give away 5 GB of online storage space, however this is not exactly unique. They plan on hosting videos, but YouTube already has them beat. Finally they redesigned their home page to look like Yahoo.

Will AOL transform themselves into a new internet portal that will dominate? I sincerely doubt it. They are going to need far more than free email, and a copy of the Yahoo main site to reinvent themselves. The good news is maybe they'll stop sending out those CD's by the truckload! Perhaps with some innovation, like a blog interface that works better (for example), they may be around a decade from now.

--Jonas

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