AOL, which had been increasingly resembling a sinking ship as it lost millions of customers over the last few years, recently announced that it will begin giving away its service for free.
That’s a good thing, because its service was frankly not worth paying for anymore. You were slapped with a monthly fee on top of what you already paid for broadband access, and they gave you no compelling reason to do so. Everything available on AOL could be had for free elsewhere on the Internet.
Rather than keep losing customers, AOL will stop charging them and hopes to stop the bleeding. Instead, AOL will try to make money through advertisements, which demands that it keep as many people in a captive audience as possible.
Unfortunately this means AOL will be axing about 5000 employees, or 25% of its workforce. It simply can’t afford them anymore.
Personally, I think AOL isn’t even worth using for free (which is really sad). The AOL e-mail address means nothing, and is actually perceived by some as being for amateurs. Free e-mail is readily available through Yahoo or Hotmail. Just about the only thing I see the service being good for is for the chat rooms, if you’re into online chatting.
What a change from the days when AOL WAS the Internet (those being my poor college days where I’d rack up $200 AOL bills when you had to pay by the hour.) AOL even invented the instant message in its modern form and yet failed to capitalize on it.
AOL (and the associated merger with Time Warner) is the poster child of how not to run a business. They’ve had their butts kicked by the likes of Google, Yahoo, and Microsoft, who offer greater value for less money. Now it remains to be seen whether they survive at all.
Ah, the joy and efficiency of laissez-faire economics at work.
No related posts.
Comments on this entry are closed.