AOL Kicked To Street By Time Warner

Nick Gillespie | May 29, 2009

Internet and email provider AOL, which bought Time Warner a little less than a decade ago for $147 billion (and in many way signalling the peak of the tech-bubble-boom; a year later AOL Time Warner was writing off $99 billion in losses), is being sent out to face the 21st on its lonesome. The split should be complete by year's end:

"Becoming a stand-alone public company positions AOL to strengthen its core businesses, deliver new and innovative products and services, and enhance our strategic options," said Tim Armstrong, AOL's chairman and chief executive officer. "We play in a very competitive landscape and will be using our new status to retain and attract top talent."

Rots o' ruck, buddy, especially if you can't stop talking in corporatese. More here.

This final breakup scene reminds me of the absolute hysteria that the AOL Time Warner merger whipped up at the time, when nothing less than the fate of the Republic was at hand. The new behemoth on the media block would, don't you know, never print any news critical of anything vaguely related to any of the companies or interests of AOL Time Warner. The web and cable shows/sites would just become uncritical shills for every goddamned product under the sun and real journalism would take a backseat to the sort of celebrity jock-sniffing that drives so much traffic to The Huffington Post. We would never again hear a critical word uttered about the Batman franchise, gazillionaire fatcats, that Man in the White House, or ever get to see a Woman there. You know the drill.

Back in 2000, I wrote about the heavy burden of market dominance, when a company often has to start giving away its product to maintain its market share. That was a situation that was overtaking AOL at just that moment, which was giving away ever-larger numbers of free hours of access to lure customers.

In a relatively free market, companies get big and stay big primarily by giving people what they want—and often more than they want—at pretty good prices. They may be brutally competitive with other firms but they tend to put on kid gloves when it comes to the customer.

Examples of this abound throughout the economy, where the big kids on the block tend to act more like buddies than bullies: Think of Coca-Cola, which dominates the U.S. soft drink market with a 44 percent share (and two-thirds of fountain sales). When's the last time Coke raised its prices? Over at least the past 20 years, a 2-liter bottle of Coke—or Diet Coke, or Caffeine Free Diet Coke, or Cherry Coke, or any of its proliferating sub-brands—has rarely wandered out of the 99 cents-$1.50 range.

The same goes for McDonald's, which rules the U.S. fast-food market with a 43 percent share. McDonald's is so desperate for customers that it's held prices essentially constant over the past two decades, while boosting portion sizes (burgers, fries, and drinks are all bigger than they used to be), expanding its menu, and building elaborate play structures for kids while simultaneously throwing increasingly sophisticated toys at them. In the case of McDonald's, such tactics have not even been particularly successful: Despite maintaining its top niche position, the Golden Arches continues to leak market share to an increasing number of rivals.

More here. 

At its peak, AOL had something like 27 million dial-up subscribers (it also had a ton of bring-your-own-access customers) and it still has on the order of 6 million dial-up folks, along with a number of popular content sites (best known is TMZ) and other services (AIM is still the king of instant messaging). The email service went free years ago of course, and there are literally millions of legitimate complaints from users scattered around the intertubes like so many Jack T. Chick tracts hoping to be read. And don't even get me started on Time Warner's early rollout of the Roadrunner service, which seemed to be run by Wile E. Coyote based on its ability to deliver only bangs for the buck in the late '90s.

But as an AOL user since 1993, I'd like to say that for all the abuse the company and its users took over the years (remember back when Usenet groups would snobbishly flame you for simply having an AOL address? Recall all the moral panics about the anonymity afforded users by dint of weird handles back when most services were enforcing transparency in email identities?), it was almost always there when I needed it, just an overly expensive phone call away. Which is far more than I could say for most of the ISPs I tried out in the early 1990s, including a couple of university-based ones.

Good luck AOL, lingering on into the future like an A&P grocery store, a fading retrovirus of a once vast commercial empire reduced to virtual nothingness. I'll be happy to bore my grandchildren with tales of AOL's past grandeur when they note that weird unused icon on their thumbnail computers from MSAPPLE in the year 2040.

Comments

|5.29.09 @ 8:00AM|#

In grad school, around the time of the merger, it seems all talk revolved around "synergy." Mergers were based on how the two companies could supposedly "synergize" (sorry, but I can't write any iteration of that word with quotes).

I suspect the talk now is that mergers should be based on how the two companies can save costs. Who am I kidding? You're probably right, they are still talking that "synergy" BS.

|5.29.09 @ 8:01AM|#

Again - rearranged - I give up today...

In grad school, around the time of the merger, it seemed all talk revolved around "synergy." Mergers were based on how the two companies could supposedly "synergize" (sorry, but I can't write any iteration of that word without quotes).

I suspect the talk now is that mergers should be based on how the two companies can save costs. Who am I kidding? You're probably right, they are still talking that "synergy" BS.

Xmas|5.29.09 @ 8:02AM|#

Nick...Usenet...seriously. Next you'll be talking about the good ol' days of alt.fan.warlord and RICHH's work on alt.sex.stories.

|5.29.09 @ 8:06AM|#

The only thing that really bugged me about AOL was that they kept sending me CDs I didn't ask for.

-jcr

Seward|5.29.09 @ 8:09AM|#

Xmas,

When mentioning Usenet one should also always reference MUDs and MUSHes.

Seward|5.29.09 @ 8:09AM|#

Randolph,

That's back when CDs were the bomb!

|5.29.09 @ 8:30AM|#

"The only thing that really bugged me about AOL,"was having to sign-up for AOL to get a discount on a desktop at CompUsa, only to have my first act as soon as I got the desktop home was to cancel my AOL subscription. I guess they were counting on people forgeting to cancel or some such.

Xmas|5.29.09 @ 8:34AM|#

Seward,

I've seen more than my fair share of people failing out of colleges due to MUDding. I've also appeared as a character in other people's Fan Fiction.

I was young, and I needed the money.

|5.29.09 @ 8:53AM|#

When I went over seas I killed my AOL service. It took me or my Dad pretending to me actually, to get the bastards to stop my service and stop billing my credit card. They were really bad about pulling tricks like that.

That said, back in the day, I met more than a few woman via chatting on AOL. Despite its flaws, I really can't complain too much about a service that resulting in my getting laid.

|5.29.09 @ 8:53AM|#

It took them months to stop billing my credit card and cancel my service.

Spoonman|5.29.09 @ 8:55AM|#

AIM may be the king of instant messaging, but when was the last time you used AIM itself? I haven't for at least six years.

Spoonman|5.29.09 @ 8:55AM|#

(To clarify, I mean I've used clients like Trillian and Pidgin.)

Dormouse|5.29.09 @ 8:58AM|#

McDonald's is so desperate for customers that it's held prices essentially constant over the past two decades, while boosting portion sizes

Umm...no.

ed|5.29.09 @ 9:00AM|#

"The new behemoth on the media block would, don't you know, [___________] any news critical of anything vaguely related to any of the companies or interests of AOL Time Warner"

Looks like you lost a word or two there, Nick.
Might I suggest "squelch," "squash," "censor" or simply "kill"?

|5.29.09 @ 9:02AM|#

BTW, anyone remember the "Cancel my account" fiasco?

When I saw that, I knew AOL was headed for the ash-heap of history.

-jcr

|5.29.09 @ 9:08AM|#

Damnation!!one!1 And just when I was about to upgrade from Compuserve. Well, I guess you can still email me at 17846325893902@compuserve.

John Tagliaferro|5.29.09 @ 9:12AM|#

The only thing that really bugged me about AOL was that they kept sending me CDs I didn't ask for.

I liked them for decorating purposes. Never got this fancy.

Not finding those 3.5" disk or CD dresses that enterprising young ladies were creating a few years go. Thought they were interesting.

|5.29.09 @ 9:15AM|#

I was a Prodigy user first. Man, those were the days!

|5.29.09 @ 9:20AM|#

Seems to me Time Warner is cutting its losses. I give AOL another year at most. Never was the same since Steve Case left.

RT
www.privacy-tools.echoz.com

WTF?|5.29.09 @ 9:29AM|#

"The new behemoth on the media block would, don't you know, any news critical of anything vaguely related to any of the companies or interests of AOL Time Warner."

Is there a word or two missing here?

Spoonman|5.29.09 @ 9:32AM|#

WTF?, the word missing is "accidentally", as in "would, don't you know, accidentally any news critical of..."

|5.29.09 @ 9:38AM|#

I've signed onto AOL around the same time Nick did. Been through all the ups and downs with them. I'd hate to loose my AOL email addresses. I've been using them for so long now. I can't even begin to think of all the people and businesses I'd have to update if I had to change.

If I do, what's best? I've heard good things about Gmail

Mike Laursen|5.29.09 @ 9:45AM|#

remember back when Usenet groups would snobbishly flame you for simply having an AOL address?

Remember?! I was one of those snobs! Shut the fuck up, AOLers!

Warty|5.29.09 @ 9:49AM|#

I used to microwave AOL CDs. It was way cooler than you think.

Warty|5.29.09 @ 9:50AM|#

If I do, what's best? I've heard good things about Gmail.

Yes. Gmail.

|5.29.09 @ 9:52AM|#

Warren, if you're lucky someone might buy the accounts off AOL and let you keep the addresses. I have a pre-merger with Earthlink Mindspring address.

Man. I remember when Usenet was the bomb. Met Mrs. Jammer that way.

|5.29.09 @ 9:54AM|#

If I do, what's best? I've heard good things about Gmail

I still use a Yahoo account for purchases or anything likely to get me on a spammer list. I will say this: their spam filter has improved massively over the last year or so. I used to collect a couple dozen spams a day in that account; now I get only a few.

neener|5.29.09 @ 10:06AM|#

When I was an undergrad we used to take those AOL CD's and throw them off the balcony at the building next door at night. It was a poor man's fireworks.

I started out on Prodigy. Remember when you'd get charged for going past the 30th email in a month?

|5.29.09 @ 10:08AM|#

If I were Ted Turner, I'd hire the Mormon Tabernacle Choir to go to the annual shareholders' meeting and chant "I told you so, I told you so!" on the sidewalk outside.

|5.29.09 @ 10:58AM|#

Ted Turner:

Braves great when I owned them, declined in your hands, not so great in Liberty Media's hands. Check.

CNN: Ha! Check.

AOL: WTF? Check.

TBS: Where are the Braves? And the Beav? Check.

Losers.

John Tagliaferro|5.29.09 @ 10:59AM|#

Two thoughts. First, maybe Obama is going to bail out AOL? Could do it like the banks. Make Microsoft take this toxic asset. No, I do not support that, but the way things have been going . . .

Second, folks who mention Gmail, I love it and just started using it a year or two ago.

Google has all sorts of services that generally tie together well. Made a blog for my book, profiles for the characters, email addresses related to them, AdWords accounts, analytics for the web site and there are still items that I have not even looked at yet.

It is not perfect, but it is good and convenient, easy to learn.

One odd thing, when you share email addresses there is a big delay in seeing mail addressed to any of them that you are not logged in on.

Can cause some confusion too, like when me or my co-writer/co-blogger mistakenly sends mail with the wrong user name on it. I remember friends setting up their own mail servers in that manner and always wondered how they kept it straight.

Joel|5.29.09 @ 11:28AM|#

I'd hate to loose my AOL email addresses.

Yeah, it's a problem. The last time I loosed mine they mauled three kids down the block and it took me like forever to get them back in the box. Lawsuits out the yingyang, boy.

|5.29.09 @ 11:34AM|#

Cheer up, AOLers! You can always look down your noses at those with WebTV accounts!

Does this mean that September is finally over?

Kevin

B|5.29.09 @ 11:40AM|#

For a good chunk of the 90s I used those AOL CDs as coasters. Still probably some around here somewhere.

|5.29.09 @ 12:06PM|#

I've been using them for so long now. I can't even begin to think of all the people and businesses I'd have to update if I had to change.

Ha-ha! AOLamer!

I started out on IDT in 95 using a UNIX shell account to log on. 14.4 Kb/sec baby! A buddy of mine still clings to newsgroups, but I never saw much use in them. Too much spam and too time intensive.

John Tagliaferro|5.29.09 @ 12:08PM|#

For a good chunk of the 90s I used those AOL CDs as coasters. Still probably some around here somewhere.

That was my most common decorating use for them.

Would also collect odd ones from the library and other departments in college.

|5.29.09 @ 12:13PM|#

"remember back when Usenet groups would snobbishly flame you for simply having an AOL address?"

It's not like AOLers did anything to endear themselves to us long-time Usenet denizens. Do the words, "Me too!" mean anything to you?

Joel|5.29.09 @ 12:48PM|#

Do the words, "Me too!" mean anything to you?

Is that worse than "+1"?

z|5.29.09 @ 12:59PM|#

Is it me, or is big corporate American an unending cycle of mergers followed by spinoffs followed by mergers?

AOL nostalgia|5.29.09 @ 12:59PM|#

Loading artwork, please wait...

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Mike Laursen|5.29.09 @ 1:13PM|#

Is it me, or is big corporate American an unending cycle of mergers followed by spinoffs followed by mergers?

And between those events you gotta have a reorg of the corporate org chart at least once a year.

JB|5.29.09 @ 2:08PM|#

The people at AOL had their heads stuck in the sand. I talked to them in 2000 about broadband and they looked at me like I was crazy.

Dinosaurs die because they don't adapt as their business changes. This is why you have to hire smart, creative people who can change their mind and try new things. Nothing is static.

|5.29.09 @ 2:58PM|#

I'm routinely mocked for clinging to my AOL account but there's something about Gmail that just creeps me out; it's as though Google totally takes over your computer, watching every key-stroke and giving you way too many "suggestions".

I liked having the AOL discs, since I had a crap computer and needed to reload the software at least 3 times a year. Back in the dial up days, it could take forever if you tried to download it.

|5.29.09 @ 3:03PM|#

That said, back in the day, I met more than a few woman via chatting on AOL. Despite its flaws, I really can't complain too much about a service that resulting in my getting laid.

I can. I was in the service for twenty years and made 6 deployments (Westpac, Southpac and IO). Got laid by women of many cultures. That didn't stop me from complaining about the U.S. Navy. A lot

John Tagliaferro|5.29.09 @ 3:12PM|#

It's not like AOLers did anything to endear themselves to us long-time Usenet denizens. Do the words, "Me too!" mean anything to you?

LOL, I remember that. I first found USENET through assistance from Eric Corley on how to get to it from AOL. Then the flames began, no matter how "on topic" I was. I soon found out why.

Loading artwork, please wait...

Are you sure you want to log off and stop being charged?

Are you really sure you want to log off and stop being charged?

Please type the following to confirm: I, JaberWok69, of sound mind and body, do certify this as meaning that I want to log off.

I remember that too, back in my $666 per month billing days.

I'm routinely mocked for clinging to my AOL account but there's something about Gmail that just creeps me out; it's as though Google totally takes over your computer, watching every key-stroke and giving you way too many "suggestions".

LOL, that was funny.

|5.29.09 @ 10:38PM|#

I used those AOL CDs as coasters.

They sucked as coasters. Hole in the middle, no lip around the edge. You'd end up getting condensation running right under the disk.

-jcr

Saunterer|5.31.09 @ 11:34PM|#

So Long AOL, thanks for AIM.