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August 2nd, 2006, 09:37 AM #1In an attempt to reclaim users and revenue, AOL likely to drop fees
Headline: In an attempt to reclaim users and revenue, AOL likely to drop fees
Story leaked that AOL is considering dropping fees (not completely for dial up users). I think this is a sign of continuing weakness as they struggle to be relevant and of interest to consumers.
First 3 paragraphs:
After losing almost a third of its subscribers in three years and about $200 billion in market value in five, Internet giant AOL likely will transform its entire business model to become a free, advertising-driven web portal and e-mail service—and possibly even social networking destination—to compete with the likes of Yahoo, Google, MySpace and others.
Word of the massive change leaked to the media in advance of today’s Time Warner Inc. board of directors meeting. It is anticipated the board of Time Warner, which merged with AOL in 2001, will thrash out final details today and formally announce the transformation Aug. 2, the same day it will release Q2 2006 financials, as part of a new turnaround plan—its fourth in five years.
The new AOL would be free to broadband users, who can access the Internet sans AOL via their broadband providers and then access their AOL account at AOL.com; the company, however, would continue to charge subscribers who use dial-up access, according to leaked reports
August 2nd, 2006, 11:00 AM #2Aol
Donuts, not sure what the overall impact would be from this. In your opinion, would this possibly open the door to ppc similar to the big three for AOL and advertisers?
August 2nd, 2006, 11:15 AM #3
August 2nd, 2006, 11:28 AM #4
Can you imagine walking away from that monthly revenue though? I know it's flagging, but I would have loved to sit in the board room when he pitched that to the Time Warner cronies.
I haven't been on an AOL page in ages. Are they already leveraging AdSense?
August 2nd, 2006, 11:54 AM #5
AOL shows Google AdWords ads. And the traffic is high quality, often better than the traffic at Google.com itself. This isn't an adsense / content network partner, it's the Google Search Network partner. Among the Search Network partners, I consider it one of the very best. So this news really isn't about ppc because I expect G will continue to be AOL's prime ad supplier and since AOL is shrinking, it'd be suicide to go down the we'll-make-our-own-ad-system-like-MSN-is-doing path.
AOL's problem is shrinking numbers of users (and therefore revenue) and their business model. People used to use them because they organized content via keywords, but now that search engines index the web so well, their manual efforts are doomed. So their angle of providing content, as an ISP, is long dead. Many AOL users dislike the way AOL mangles the browser and they won't even use the AOL-modified versions on browsers.
So AOL is reduced to being just an ISP.
Google, MSN and Yahoo aren't anything like AOL.
AOL needs to figure out just 2 things - how to stabilize (and then grow) their number of users and how to leverage / monetize them. Using G's syndicated ads is the best (and current) solution to the latter, their problem is really the former.
As dial-up dwindles, what becomes of AOL. They merged with Time Warner and TW already has many broadband products to choose from. So if AOL is this thing... let's define it as "dial-up service and content nobody wants" and dial-up is dwindling, well, you get the picture of their future.
The merger should let the AOL minds (bright in their time) teach TW (cable tv people by background) how to monetize all those broadband users, not via AOL content, but via ad syndication as AOL has always done.
AOL itself, is doomed. But what they did can be applied to the things that TW is doing now with broadband.
Example... I have broadband cable internet access in my home via Time Warner. There's nothing I ever installed (except cable modem settings) onto any of the PCs in my home sharing my wireless network. TW is not monetizing me in any way other than my cable bill that I pay. In the old days, AOL extended their ISP onto the desktop with features driving people to use them as a search engine and more. And they made (and continue to make) tons fro this arrangement, mainly via deal with G. So why has broadband thinking become totally sterilized of any other ad monetization thinking? This is killing TW and allowing AOL's slow death to go to waste. A few small ideas taken from AOL, brought up to date to fit TW's broadband model, and they're off and running again.
TW should offer me a cable internet access discount if I use the AOL search engine, or set my default page to whatever TW-AOL search page they choose going forward, or of I use their toolbar for searches, or whatever... presently, they've lost the monetization connection (that AOL used to be great at) between TW and the TW broadband customers. If they started maximizing stuff on TW end, then letting AOL slowly die as dial-up fades, wouldn't be a big deal to stockholders - the TW broadband bucket would fill up as the smaller AOL dial up bucket slowly drained.
August 2nd, 2006, 01:02 PM #6
As I recall Donuts, from when I signed up with Time Warner broadband, there is an OPTIONAL software install that was sent on CD along with the modem. I know it included RR Medic, and probably a freeware version of MacAfee or something similar.
So they have probably got some people already using their software. It didn't specifically say it was optional, I was just savvy enough to know that it was
They also have monetized their local pages, i.e. www.rochester.rr.com with sponsors and ads once you get to news and search, etc.. The Webmail page is also loaded with ads.
But, they don't have content. And neither really does AOL. So what they're left with is millions of potential daily eyeballs, and nothing really to show them.
So you're right. RR needs to develop a worthwhile desktop app, probably that would be relevant to Vista users when it launches.
August 2nd, 2006, 01:06 PM #7
August 2nd, 2006, 02:05 PM #8Originally Posted by Donuts
August 2nd, 2006, 02:31 PM #9
Originally Posted by Rhia7
- Join Date
- January 18th, 2005
I know the new old new economy is back in swing. but really, having people actually pay for products that cost money is never a bad idea and hardly a rip-off.
August 2nd, 2006, 02:35 PM #10Originally Posted by chetf
August 2nd, 2006, 04:19 PM #11
- Join Date
- January 18th, 2005
Broadband users do NOT get connectivity for free. AOL does not provide it for them, so they don't charge them.... they do provide the dialup, so they charge for that.
August 2nd, 2006, 05:08 PM #12
The following comments are from a non-AOL user and only my opinion:
AOL is a rip off. It's not about paying for something or not paying for something. It's about paying too much for something. I have some friends on AOL, they're paying around $25 a month for dial up. If that price isn't a rip off, they also have to sit through a bunch of ads and pop-ups whenever they log on. If I'm paying a premium price, I expect a premium service. And that ain't AOL.But are you still master of your domain?
August 2nd, 2006, 10:03 PM #13
- Join Date
- February 20th, 2006
- Bay Area, CA
SBC / AT&T DSL is about $14 a month and about $18 for high speed. The DSL comes with free dial up (for out of town connectivity). I remember being on a dial up about five years back with EarthLink - and I paid initially about $20 which kept on decreasing over the years.
AOL used to charge $20 for dial up which then increased to about $24. While the world was moving toward cheaper / better connectivity, AOL went the other way. One of the primary reason the AOL remains that users do not want to give up their AOL email. I know people who have both AOL and DSL (from another provider) but keep AOL just for the email account.
It will be a welcome move for them to change over to Google / Yahoo mode - give out free emails etc, create portal, get PPC from Google - in fact a new business model. . AOL relevency has indeed diminished and as a company will get totally wiped out if they don't take drastic actions.
August 2nd, 2006, 10:31 PM #14
some history, and I'm not defending that dating service called AOL:
once upon a time there were no ISPs. There were companies you could dial into with a modem and they functioned as huge bulletin boards. There were several large ones like Compuserve and their peers. But Compuserve was for computer nerds and college types, engineers, etc.
There was some "value-added," though, because your first reason was for dialing in (and paying maybe $3/minute) for your email, but your second reason was because internal to their system were relevant forums.
Connecting to the Internet (early Web) had to wait until people started inventing browsers and they worked and looked baaaad.
AOL showed up and had the same communities but promoted chat in their ads. Hence the dating service feel they had. They also had very good accountants. And a need to expand. So they started sending out disks with their software on it to get people to go with them.
They neglected to tell certain authorities that they were counting people on 30-day trials as fully paid subscribers. They made some other mistakes, like rounding up your call times even from a few seconds to a full minute. And billing you for an extra month even though you cancelled the service in time. They lost a few class action suits. But they kept the accountants.
Later those accountants could "prove" that their company could buy out other companies for stock. And did.
But the advent of high speed connections coming from other vendors caused many to think they didn't need to go through the clunky software any more. Indeed, they didn't if all they wanted was to go to the Web and surf.
Remember, the full time subscribers were paying much less by the month than the $3 or more per minute people. And their forums were splitting some of that money.
So now they figure they'll spam everyone with advertising and anything else they can sell from their own pack. And maybe it won't matter that those who were paying customers are now just visitors. The interesting part is that those coming in via high speed connections will also figure out they don't need AOL any more. They'll get their email from their new ISP anyway.
August 2nd, 2006, 10:34 PM #15
- Join Date
- January 18th, 2005
So now AOL will let you have the service for free, along with all of the adware BHOs, popups and other crap they will hit you with. It sounds to me like AOL just became a power affiliate.
August 3rd, 2006, 02:25 PM #16
I added the bolding below.
There are several more paragraphs that follow what I quoted below, but of lesser interest. Use link above to see the whole article at [irony] yahoo [/irony].
5,000 workers to go.
NEW YORK (Reuters) - Time Warner Inc.'s (NYSE:TWX - news) AOL online division said on Thursday that some 5,000 workers, or about a quarter of its staff, would no longer be on its payroll within six months as part of a restructuring that includes selling its European Internet access businesses.
"At a company meeting this morning, Jon Miller (AOL's chief executive officer) told AOL's worldwide work force of 19,000 people that within six months, it was likely that around 5,000 employees would no longer be with the company," an AOL spokesman said on Thursday.
AOL said on Wednesday on a conference call that it has a new strategy to boost online advertising sales by offering its e-mail and other Web services for free. It said it would continue selling dial-up Internet access, but would no longer market those services.
The one-time king of the online world said it expects to book restructuring charges of up to $350 million by the end of 2007. It also plans to cut more than $1 billion in operating expenses in 2007.
August 3rd, 2006, 02:29 PM #17
- Join Date
- June 7th, 2006
AOL was great when it was a Mac community. Went downhill when the PC folks showed up and AOL let them in the door.
August 29th, 2006, 06:07 PM #18
AOL has a search engine marketing program? I suppose the must...but its news to me. Whats it called?
August 29th, 2006, 08:40 PM #19Originally Posted by nakedgamer
August 29th, 2006, 11:10 PM #20Changing landscape
Yep, nothing is more certain as change. Just as AOL was the king just a few short years ago - new players have entered the picture and AOL is now restructuring to move forward with a new model.
Their move is probably not unlike many of the old pro affiliates experiences. Product popularity rises and falls, the affiliate restructures his/her sites, product offerings, marketing focus and a new model is born.
Today G, Y and M are the big guys. Who knows what new players will emerge in the next 5 - 7 years.....
September 21st, 2006, 02:19 PM #21
- Join Date
- September 21st, 2006
I have AOL & I only have it to this day, because I have had the account since about 1995 or 1996. I mostly use it for business & all of the customers know the address.
Anyway, I got an email from them, letting me know to check out their new subcription rates, so I did.
I didn't see my plan that I had paid for for years, & so I called because it appeared my plan or close to it, was only $9.95.
The person tried to tell me that the plans on their page did not exsist & that I would still have to continue to pay $19.95 per month.
We argued about an hour because the person was clueless.
She said those were temporary plans, but then later said oh they are plans for NEW users.
I was so disappointed that AOL would treat a long time customer like this.
Rip the old customers off & throw money at new customers.
We worked it out, but I don't trust AOL anymore.
I may think about getting rid of them.
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