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View Full Version : AOL Puts Hope In New 9.0


notech
Jul 31, 2003, 10:07 PM
(Taken from Yahoo! Finance)

July 31, 2003

If AOL Time Warner (NYSE: AOL) ever needed a wildly successful launch of the latest version of its online service, it's now. Once a standalone company -- and a soaring one at that -- AOL has been flagging during the last few years as subscribers flee by the thousands and advertising revenue plummets.

Last quarter, AOL lost 804,000 subscribers, bringing its total narrowband subs to a number not seen since late 2001 -- about 25 million. In the same quarter, advertising revenue nosedived 48%. Management is hoping that Friday's launch of AOL version 9.0, along with a recent $35 million marketing spree, will stem the bleeding and increase broadband subscriber interest.

The problem is, versions 7.0 and 8.0 -- both of which touted enhanced broadband capabilities -- didn't reverse losses in AOL's member base, and mere content enhancements in version 9.0 aren't likely to do the trick, either. More and more people are subscribing to Digital Subscriber Line (DSL) services marketed by the likes of SBC Communications (NYSE: SBC) and Verizon (NYSE: VZ), or they're joining a less expensive Internet service offered by Microsoft (Nasdaq: MSFT) or Earthlink (Nasdaq: ELNK).

Cable Internet providers such as Comcast (Nasdaq: CMCSA) are also stealing away narrowband AOL subscribers through packaged cable TV and Internet deals, even though AOL has the largest cable network in the country and is also growing cable subs.

So, the question is: Launching tomorrow for broadband users and later this summer for all AOL users, how will version 9.0 Optimized (as it's called) steal back market share?

The strategy includes offering AOL-exclusive content from Time Warner's enormous war chest, including Time, People, and Entertainment Weekly articles; enhanced Instant Messenger, including an ability to send photos and audio through IM; better spam filters and new e-mail features; and enhanced broadband content with a more dynamic welcome page. Additionally, Apple's (Nasdaq: AAPL) QuickTime media player will be offered for the first time, alongside the usual media players and AOL's new proprietary player.

All these features and exclusive content, marketed well, should be enough to gain new interest from those relatively few Americans who have yet to sign online, but may not be enough to keep AOL subscribers who are ready for something different from moving on. For many, marketing deals from the Baby Bells and competing cable companies keep beckoning. Plus, when you're the largest ISP with perhaps 20% of American households already subscribing, it seems easier to lose market share than gain it.

Stelliform
Jul 31, 2003, 10:58 PM
I am sure AOL isn't surprised by this. They haven't adapted quickly enough to changing times. IMHO.

Mudbug
Aug 1, 2003, 12:50 AM
AOL was a good idea when the internet was an odd and unknown thing, because it brought together points of information in a single simple place, but for a price. But now, it's still trying to do that same old tired thing, and failing at it because there are too many options for the same thing, and most of them are free. So why pay an inflated fee for something you can get for no cost, or in a more poetic way, why pay for milk, when you can have the cow for free?

MrMacMan
Aug 1, 2003, 06:57 AM
Well Mac users have been left behind.

Our version is inferior to that of the windows version, I remember in Os 9 when Mac's had 5.0 and Pc's had like 7.0...

Now we have 'AOL: Mac Os X' well thats a POS!

They haven't upgraded significantly since they launched it!

We might get the features of AOL 9 in like 3 years...

Capt Underpants
Aug 1, 2003, 09:22 AM
Originally posted by MrMacman
Well Mac users have been left behind.

Our version is inferior to that of the windows version, I remember in Os 9 when Mac's had 5.0 and Pc's had like 7.0...

Now we have 'AOL: Mac Os X' well thats a POS!

They haven't upgraded significantly since they launched it!

We might get the features of AOL 9 in like 3 years...

Do you really want AOL that badly?

NavyIntel007
Aug 1, 2003, 11:04 AM
I think MSN is doing a much better job in doing the "all-in-one" internet experience for broadband. Verizon offers it with it's service for free although you don't have to use it. I believe Cogeco cable in Ontario also offers it with their service. I've never used it though. If you're traveling in Latin America, there's no other way than AOL.

MacManDan
Aug 1, 2003, 12:15 PM
Originally posted by Mudbug
AOL was a good idea when the internet was an odd and unknown thing, because it brought together points of information in a single simple place, but for a price. But now, it's still trying to do that same old tired thing, and failing at it because there are too many options for the same thing, and most of them are free. So why pay an inflated fee for something you can get for no cost, or in a more poetic way, why pay for milk, when you can have the cow for free?

I agree. Well said. I think AOL's late arrival into the broadband era coupled with their wishful thinking that people would still want to pay for their services and information is making them lose market share quickly. Of course, there are still those loyal people that enjoy AOL and its content, but they are becoming fewer and farther between. I don't think AOL has anywhere to go but down. Kind of sad, I suppose, since AOL was my first ISP :(