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Sunday, July 21, 2002
AOL = SOL?
Here is one of the best pieces I've read about the AOL fiasco. Of course it's published by MSNBC (read: Microsoft), but still it's balanced and insightful.
The main news of the past week is that Robert Pittman, the COO of AOL Time Warner resigned (some say ousted), but the backdrop behind the move is the sad state that AOL now finds itself in. Replacing Pittman is a true Time Warner guy, so the mood there is likely to change. The "Internet DNA" vision that AOL had during its merger has been replaced by Time Warner's serious business philosophy, as execs try to right the ship.
I think this is probably a beneficial move for AOL, but I wonder if AOL's good days are behind it. The article points out that subscriber growth has slowed considerably and speculates that AOL has simply saturated the market and will have trouble finding new customers. This is no surprise since AOL is still dial-up only, basically.
In order for AOL to really stay viable far into the future, it will have to make a much stronger entry into the high-speed access market, which will take years to do. And then it might really be too late. Time will tell, for sure.
On a side note, the article makes another point about how the various divisions of AOL Time Warner hate on another. This shouldn't be a surprise, either, since the company is really a conglomerate of countless other companies like magazines, TV stations and movie studios. IMHO, the merger should never have happened anyway, but not for anti-trust reasons.
When you have that many disparate companies trying to create "synergy" across so many different properties, it's nigh impossible to pull it off. Again, time will tell, but it's starting to seem that the merger was a very dumb idea.
Posted by
Cory Kleinschmidt
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D'oh!
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