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America Online is paying the price for falling behind in the Internet revolution. According to this morning's Wall Street Journal, AOL is considering forgoing billions in subscription revenue by allowing households with their own broadband connections to access the service for free.
AOL Wants to Be Free [news.moneycentral.msn.com]
They'll make up the loss by firing thousands of people from marketing, administration, and IT. Combine that with some aggressive cost-cutting in other areas, and it'll work out in their favor.
I see the Internet side of AOL/Time Warner being sold or spun-off shortly.
As Gordon Gecko once said... "it's a dog with fleas".
AOL: todays ISP, tomorrows Myspace competitor?
No way that could ever happen. AOL is clueless with what kids are doing on the net these days. Aside from that there is all the negative publicity of late including that news snippet of a subscriber who spent 20 minutes trying to cancel his account only to be given the run around.
When they first started out, they were busted for having too many hidden charges. Their shadey behavior never stopped, as they continued to ship out millions of unwanted CD junkmailers for "Free Internet Access" and them made it impossible to cancel your account.
AOL is the short yellow bus of the internet, and they are finding out that there just aren't as many idiots as there once was.
Even if they'd had excellent service, the product itself is worthless now because content and access have been totally separated from each other in the age of the internet and world wide web.
People might consider paying a website for certain kinds of content, but they'd very rarely consider paying their access provider because the access provider wouldn't be able to compete as it could only sell content to its own subscribers. Websites let people sell content to literally anyone with web access, there's just no point in doing it through proprietary subscription systems any more.
Microsoft found this out pretty quickly when they tried to set up the original MSN, not the website we know today but an AOL/Compuserve-style proprietary network which appeared just as those kinds of networks were going out of style. Another proprietary network which appeared at just the wrong time was the Sierra Network, a games-oriented dial-up community service run by the games publisher Sierra On Line (who ironically enough had never actually done anything online before TSN).