AOL Learns That You Can't Just Go 'Free, With Ads.' You Need To Give People Reasons To Visit

from the business-model-101 dept

Wed, Nov 7th 2007 8:17pm — Mike Masnick

It's been a little over a year since AOL made the big decision to go free. It was about the only thing the company could do at the time. It's subscriptions were dropping rapidly. It held little to differentiate itself from the many free services out there. It had failed to build a real broadband strategy for years. The problem, though, was that the decision to go free was made way too late and, most importantly, without much additional strategy behind it. It seemed like the strategy was basically just "if we go free, we'll sell ads." They left out the important middle step though: the company needed to actually give people a reason to visit and give advertisers a reason to buy ads. Without that step, it really isn't surprising that the company is realizing its "free, with ads" strategy isn't working as well as planned. On the same day that AOL officially bought another online ad company, it was revealed that the growth in ad revenue has been slowing, and it lost a big advertising partner. This is a good reminder, though, for other companies out there who are trying to figure out how to embrace "free" as a part of their business model. You can't really neglect the rest of your business model.

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Filed Under: advertising, business models, free
Companies: aol, time warner

10 Comments

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Max Powers at http://ConsumerFight.com, 7 Nov 2007 @ 9:00pm

AOL blew it big time
People still use AOL? How did AOL get in this position to begin with? What were they doing when all the Free ways to access the Internet were popping up all around them?

When you have an astronomical amount of subscribers and you just sit by and let your business stagnate you get what you deserve.
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Anonymous Coward, 7 Nov 2007 @ 9:22pm

Do you think all those free AOL cds in the mail finally caught up with them?
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Anonymous Coward, 7 Nov 2007 @ 10:00pm

Re:
Do you think all those free AOL cds in the mail finally caught up with them?

I sure hope so.
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Why Me, 8 Nov 2007 @ 12:16am

I thought AOL died some years back. I'm surprised to hear they are still around :(
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AOL and Vista, 8 Nov 2007 @ 12:28am

Silly me, I put AOL chat on Vista. No more sound. Found a fix after many wasted hours. I found a comand line fix on google. If you have AOL chat and loose your itunes, go to Google.

AOL gotohell.
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jhozae, 8 Nov 2007 @ 3:29am

It's the memory of AOL that keeps people away
I remember how AOL software would try to take over your computer, and make it difficult to use competing software. I remember how a non-profit I volunteered for paid 2 yrs for an account no longer used because we couldn't cancel it. And if you wanted sites outside AOL, you had to open Netscape or Internet Explorer. But I remember that if you complained about things in an AOL acceptable manner, they would give you 3 or 4 months free. Don't think I paid for the last year I had them. Still wasn't worth the hassle though.
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james, 8 Nov 2007 @ 4:55am

corporate plan from AOL exec meeting
Step 1: Steal underwear.
Step 2: ..... (Confused looks) ..
Step 3: Profit!
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Lewis Salem, 8 Nov 2007 @ 6:56am

AOHell.
I think I speak for everybody here when I say that when AOL implodes, no tears will be shed.
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Haha, 8 Nov 2007 @ 10:59am

I havent liked AOL since my first month on the int
@7 exactly what i was thinking

Step 1: Give people no reason to use your free service.
Step 2:......
Step 3: Profit

Yup looks like AOL is now run by underwear gnomes.
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Anonymous Coward, 8 Nov 2007 @ 12:04pm

Well, If you cant get comments posted, and are not seeing new comments but every 12 hours or so, I guess i will move on from TD.
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