The supply of AOL free trial CD’s at your local grocery store may have dried up long ago, though believe it or not, the service itself is still going relatively strong. According to the company’s most recent earnings release, AOL still has over 3.5 million subscribers to its dialup internet service, and the decline seems to be slowing. Q3 represented the company’s smallest decline yet, even though the company lost just over 630,000 subscribers over the past 12 months.
An enterprising antique hardware collector known only as “Phreakmonkey” on You Tube has recorded and posted a video showcasing what the internet would have looked like in 1964. After detailing his lovingly preserved Livemore Data Systems “Model A” Acousitc Coupler 300 Baud Modem, he then proceeds to demonstrate how he uses it to establish a connection to the net.
Oddly enough, my 10 Mbps cable modem choked on the streaming video a bit, but my faith in my ISP was quickly restored when I compared it to the 300 characters per second this speed demon maxed out at.
This modem is about as (un)maximum as it gets around here, but it certainly is an interesting watch for nostalgic types who enjoy taking a look back at the history of digital communication.
Business schools around the world often study the January 2000 merger of Time Warner & AOL under the headline “Worst Mergers In American Corporate History”. It is not unusual, or unnatural for content creation companies to enter the distribution market, but AOL and magazine publishing arm Time Inc. have dogged their parent companies earnings for years now. Looking to cut its losses, Time Warner announced on Wednesday that it was close to spinning off America Online, an acquisition that has cost the company more than $100 billion in shareholder value.
According to the filing; “Although the company’s board of directors has not made any decision, the company currently anticipates that it would initiate a process to spin off one or more parts of the businesses of AOL to Time Warner’s stockholders, in one or a series of transactions.” When asked about the future of Time Warner, CEO Jeffery L. Bewkes claims the future “may well include publishing” but made it clear that this could change at any time. The company is likely holding out on making any decisions about Time Inc. until the recession eases and it can see if weakening print sales are a result of the recession, or the shift of its readers to online mediums.
Time Warner has already spun off it's cable division, and is clearly looking to focus on content creation, rather than delivery. I also can't help but wonder whether or not an independent AOL would become an acquisition target for Microsoft. The ad network was one of the primary drivers behind the Yahoo talks, and this is one area that AOL still does reasonably well in.
Can AOL survive on it's own? Hit the jump and let us know what you think.
And is there any wonder? Time Warner has been in talks with both Microsoft and Yahoo about selling off its AOL unit through out this year, but both companies have been much more interested in each other than the crumbled remains of AOL. Time Warner has showed a renewed interest in a deal and Microsoft and Yahoo continue to listen, but neither company appeared to be especially interested.
The NYTimes.com quotes Richard Greenfield, an analyst who covers Time Warner for Pali Capital, “I don’t see why anyone would make a move now with all the pieces on the chess board where they are,” he said. He adds that Time Warner was in a bad spot because the value of AOL was declining. (Doesn’t everyone want dialup?) Its main business is now selling graphical display ads and that is under pricing pressure. Greenfield also says its brand has a “toxic” connotation with consumers. The company does not even use the AOL name when it starts new web sites.
From its days as the evil empire of dialup companies, they earned the nickname ‘AOHell’. The company seemed to lack firm direction, buying various companies with no obvious connection to their business and often ruining them in the process. Perhaps the most famous of these is ICQ. The most popular IM program of the time was turned into bloatware, which quickly sank out of sight. Don’t even get me started on Netscape. AOL entered the portal ring way late and had already bled dialup users seeking the freedom of the internet compared to AOL’s own internal version of it. The company has been aimless and with its almost necrotic touch, is it any wonder consumers find the brand toxic?
Although more than half of American homes now use broadband, compared to just 10% using dial-up, a new Pew survey suggests that more than half of current dial-up users aren't in any hurry to move to broadband. However, you might be surprised to learn how many former online users are no longer connected at home, and how a lot of "non-connected" users can actually get online - for free.