Hmm this looks like a make or break time for AOL.
http://www.theregister.co.uk/2006/07/13/aol_considers_change/Throwing existing revenue away is a tough business and you can never be sure it's the right thing to do. And it's especially difficult to throw away a profitable cash cow piece of revenue. But that's exactly what the AOL board is being asked to go ahead and authorise by AOL CEO Jonathan Miller.
At the heart of the matter is a major issue about whether or not content is better off being free, with a multiplicity of advertising offerings, or better being a paid subscription service? There's no easy answer to this especially for a company that is currently losing three million subscribers a year.
And part of the problem is that AOL was less than honest when it collected all of those subscribers in the first place. It never really thought about whether or not what is was offering was worth all the money that it charged. Instead, by getting in early, it asked for money in order to provide a connection to the internet over a dial up line.
The content it offered was supposed to be a way of satisfying its customers without letting them wander out onto the wider public internet and it was usually described as internet access with "safety wheels".
The world has moved on a long way since then, and Miller is right in understanding with some clarity that AOL's cash cow days are all but over. People only pay their monthly AOL bills out of habit, and although habits are sometimes hard to break, the modern world is conspiring to eliminate dial up, even if AOL still has 13m dial up customers.
It sounds like they are going to sell to out soon anyway, whether or not they take the closure action and refocus the business on free content, as many companies are eager to obtain the well known name for their own service platforms.
