One Year After Tearing Down The Walls, AOL Still An Also-Ran

from the free,-as-in-CDs dept

Mon, Aug 20th 2007 12:47pm — Joseph Weisenthal

Last year, in a move that came only six years too late, AOL decided that walled gardens were out and that free web services were in. For a brief period, there was a flurry of news about AOL's attempt to reinvent itself as a Yahoo-like portal. With the walls torn down, the challenge for management was to actually give people a reason to use AOL's services, thus driving up traffic and ad revenue. Simply being free would not be enough to bring people back unless there was a compelling reason. A year later, it doesn't look like the company has accomplished this. Earnings guidance was recently reduced as the company's growth rate continues to lag behind the industry average. As Wall Street gets antsy over its performance, it seems likely that we'll hear renewed calls for Time Warner to just dump AOL and finally wash its hands of the whole affair. AOL's problem is the same one facing Yahoo: it's not Google. The difference is that Yahoo still has a lot of market share and traffic to work with. Both companies have made several acquisitions in the past year or so in an attempt to reinvent themselves, but unless one of them stumbles onto the next MySpace, Facebook or YouTube, it's unlikely that acquisitions will hold the key to a turnaround.

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Filed Under: free, walled garden
Companies: aol, google, time warner, yahoo

9 Comments

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Ajax 4Hire, 20 Aug 2007 @ 1:04pm

AOL is still in business?
I guess so, I saw a AOL free for 3 months CD today at the Wal-Mart check-out.

I think Dave Barry is correct in stating that half of today's landfills are AOL CDs and disposable Diapers.
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Anonymous Coward, 20 Aug 2007 @ 1:54pm

Re: AOL is still in business?
Both relegated to such a fate by the same set of circumstances.
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Anonymous Coward, 20 Aug 2007 @ 2:14pm

Re: Re: AOL is still in business?
"Both relegated to such a fate by the same set of circumstances."

What a poetic way to say they are "Full of shit." I am impressed.
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Neal, 20 Aug 2007 @ 2:23pm

Ugghhhh
Let's see... log on to AOL and check your email. See five times as many ads as you do on Yahoo. Watch as each of your pages take 30 secs to one minute to load on a 1.5MPS dsl connection while Yahoo pages load in only five. Make it to your inbox and find so much spam that you'd drown if it were water and re-suffer the ads and slow downloads over and over as you delete each one...

Wonder why AOL can't make a go of it!?!?!?!? Could it be that they're such greedy, ignorant, Internet abusing morons that they can't comprehend that destroying the user experience drives results in fewer users and less page/ad views?
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Former AOL'ER, 20 Aug 2007 @ 2:52pm

Many AOL.com problems can be traced back to the incompetence of Barry Schuler and the people who reported to him in the 90's. They simply did not understand the web, and came at it with a CDROM mentality (Barry's company was Medior..which did CD-based shopping catalogs). They thought they could cookie cutter all of the channels, and talked in terms of 'gold master' for a web site. The Moviefone folks who later took over some portions of the site were a little more clued in.
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Haywood, 20 Aug 2007 @ 3:52pm

Then, there is image
I really don't know how they can get past the "AOL IDIOT" thing. I'm guilty of prejudice toward anyone with @AOL in their e-mail address. How are you going to pull others into the fold when going there proves beyond a shadow of a doubt; that you are lacking intelligence, or at least computer savvy.
Sadly, I have a brother who swears by AOL, I've tried to show him the light, but that only hardened his resolve. We have a fairly computer literate family, so he is an embarrassment, we just ignore the elephant in the room.
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boomhauer (profile), 20 Aug 2007 @ 4:10pm

Re: Re: AOL is still in business?
best comment yet - that relegated one ;)
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AA in LA, 21 Aug 2007 @ 1:48pm

Agree with all the posts, (specially the AOL disks and diapers analogy). AOL is indeed a victim of its arrogance. I hope their story serves as a lesson to other companies (attn: DELL, cell phone companies).
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novernetsbandit, 24 Aug 2007 @ 12:18pm

aol disks and garbage
Does anyone remember the old 3.5inch aol disks that used to come before cds. I was tring to do math after reading this post and i think i got 2 to 4 of those a month. So if i and the rest of the world threw those out how much did aol loss on marketing. each disk 2cents and postage maybe 15cents if you signed up they made 19.99 a month or more off you so after thinking about it they have wasted alot of money on advertising but it worked we all know who they are from the anoying disks and cds we got in the mail. I agree aol is outdated but if nothing else changes the people who cant get highspeed will always have aol.
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