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American On Line, the world's
largest provider of internet access and online services, with over
35m subscribers and another 2.3m under the compuserve umbrella.
Aol made its mark by attracting subscribers with interactive services
such as chat via the distribution of hundreds of millions of trial
disks, comfortably the biggest such marketing programme in history. It then
exchanged access to those subscribers for original content from big
media names such as Time Warner, Cbs and New Line Cinema, alongside
free Advertising with those companies. The result was a service rich
in information and flush with visitors, which, for a while at least, made
real money in an other wise profitless sector.
Long regarding itself as a media concern as
well as a provider of online services, the company spent most of the
late 1990s figuring out ways to bring its content to ever more people in
ever more varied ways. Nobody was surprised when Aol bought
Netscape in 1998, marking its first real interest in the business
sector. The company spent much of 1999 forging deals with suppliers of
Broadband and satellite communications in a big push to provide
subscribers with high- speed access to its enhanced services. It moved into
online music distribution, buying two digital music companies, and it made
some aggressive moves towards the retail sector.
In January 2000, Aol announced a 150
billion takeover of entertainment giant Time Warner. By the time the merger
was completed a year later, the stock market was a few months away from
collapse and confidence in the new company was receding. Aol Time
Warner has struggled to live with its status as the world's biggest media
company. Despite a 100m- strong subscriber base and a vast distribution
Network, it failed to capitalise on its immense existing content assets
from its efforts on cross- promotional marketing activity, video-on-demand
trials and digital music subscriptions.
All this is now seen as evidence that the company's
detractors may have been right all along. Few technology companies have
attracted as much vitriol as Aol, or Aohell as it is known in
some circles. Often criticised for its poor service to dial-up subscribers,
its nannying and censorious behaviour, the ineptitude of its software and a
huge Spam problem, it now also appears to be a company whose
management badly misread the market for its services. Following the report
that the company had lost a staggering $99 billion in 2002, Steve Case,
Aol's chairman and founder, announced his departure from the company
early in 2003. |
