Big AOL story in the WSJ

Filed under: AOL

This is a very big story obviously. I'm not going to get into my personal views on this since I'm an SVP at AOL and folks have been putting what I write on my blog (i.e. my person thoughts) into research reports recently (I'm not kidding). So, for now let me just outline what is being said and you guys can comment on it.

From the WSJ: Under the proposal, which AOL Chief Executive Jonathan Miller presented to top Time Warner executives in New York last week, AOL would stop charging a subscription fee for users who already have a high-speed Internet service or dial-up service from another provider. Subscribers who have traditional "dial-up" Internet access through AOL would still have to pay their monthly fee of as much as $25.90. Nearly one third of AOL's customer base of 18.6 million already has high-speed access -- but the company expects that 8 million of its existing dial-up customers would cancel their subscription to take advantage of the new offer.

For now let me pull some opinions from around the web:

My very, very, very smart friend Fred says this is a no brainer and AOL should go for it: "C'mon AOL, just do it. You know it's the right thing to do."
My other very, very, very smart friend Henry says this is "Scary But Smart" on his blog: "AOL is between a rock and a hard place. If it does nothing, it dies slowly. If it makes moves like the one described above, it deeply wounds itself but hopes that it will recover and have a long-term future. Neither option is appealing. But only one--the latter--gives the company a chance of being around for the next few decades."
IP&Democracy shows our amazing advertising growth.

Jul 6th 2006 1:04AM
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1. wouldn't that just encourge the broadband providers to
"pick up the $$ slack" with tiered service fees?

it would then appear to be a $0 cost change to many
of the customers...

Posted at 1:31PM on Jul 6th 2006 by Steven Yee

2. Not a bad idea, but tough if internet ad rates decline. Will be interesting that AOL and Google will essentially just be big ad-serving companies.

Who is writing the headlines over at Reuters?

http://today.reuters.com/news/NewsArticle.aspx?type=technologyNews&storyID=2006-07-06T083708Z_01_N06334082_RTRUKOC_0_US-MEDIA-TIMEWARNER-REPORT.xml

Posted at 2:39PM on Jul 6th 2006 by Nick Halloway

3. I'll take that "very, very, very smart friend" bit as a hint that you like the idea. ;-)

IMO, this sounds like a brilliant idea.

Ad revenue > lock-in ISP subscription revenue.

Sure, AOL will take an immediate hit, but I have no doubt that in the long run this will mean a more profitable and (here's the kicker) a more flexible AOL. This kind of gamble is what AOL needs to take in order to push its ISP service in the same direction that the rest of the company (thanks, in part, to Weblogs Inc) is going.

Posted at 2:50PM on Jul 6th 2006 by Conrad

4. An interesting idea (although obvious to anyone who has followed AOL), it really puts them in a battle with Yahoo, MSN and to a lesser extent, Google.

Are you going to have a large hand in AOL's site upgrade? We've known all along they have the data and customer base but the user interface needs an upgrade. A better AOL mail & messenging system (can you top Google's?) would make a huge impact considering the number of existing users.

Posted at 2:51PM on Jul 6th 2006 by Adam Cains

5. Do it.

Posted at 4:36PM on Jul 6th 2006 by Chris

6. I think this is a great move for AOL. Yea they may take a short term hit but in my opinion that's better than trying to continue milking a dying cow over the next 10 years.

Posted at 4:39PM on Jul 6th 2006 by Jeremy Mayes

7. I think it's a smart idea and an obvious one. AOL needs to do this to survive. I don't know of anyone who wants to pay extra on top of their broadband subscription to keep AOL.

If AOL implements this correctly, they could be a large player again and possibly move past MSN.

Posted at 5:54PM on Jul 6th 2006 by Scott-O-Rama

8. They need to web-ize everything before they make this move. Who wants to launch a fat client just to get content? Otherwise, great idea.

Posted at 4:56PM on Jul 7th 2006 by nick

9. So would AOL then just create it's own Firefox like AOL-branded browser (that can handle multiple tasks) for these "customers"? I'd dig that. A broswer that keeps my AIM friends that I log into while using always-on cable internet. Gosh that would be brilliant.

Posted at 2:33PM on Jul 10th 2006 by Dave T.

10. AOL can never be widespread as Firefix, therefor there is no chance that they will come to that idea.

Posted at 2:01PM on Apr 26th 2007 by Eminem

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