AOL: You've Got Broadband Issues

[Steve Mehs]

An exodus of top executives, crushing debt and the biggest annual loss in U.S. business history are only the beginning of the issues facing America Online, according to a report from technology research and consulting firm Strategy Analytics.

The firm's report, "Can AOL Bridge Its Broadband Gap?," predicts that the world's leading Internet service provider faces potentially huge revenue losses for its dial-up offering in the next few years as broadband becomes the predominant form of Internet access.

"Broadband subscribers account for only about a quarter of the U.S. online audience today," said James Penhune, a director with Strategy Analytics' Global Broadband Practice. "But by 2005, we expect that half of all online homes will be using broadband connections, most of them provided by cable and telephone companies. AOL may be able to maintain a commanding share of the dial-up audience, but the overall size of this market will have declined significantly."

Competition from broadband service providers isn't the only problem for AOL. Even if it succeeds in upgrading current customers to broadband, the result will be hundreds of millions in lost subscription revenue, Strategy Analytics said.

"Broadband may be the future, but AOL first needs to fix its core dial-up business," Penhune said. "Management should make the most of the service's huge base of subscribers by rebuilding ad revenues and establishing more premium services. They may also experiment with prices by adding less expensive options for new customers while boosting rates for the flagship service."

From SkyReport (http://www.skyreport.com/skyreport/feb2003/021303.shtm#three) (Used with Permission)

[waydwolf]

:rant:

    AOL's satellite and DSL offerings have sucked like a 500hp Electrolux precisely because as they have bowed to the force of history and grudgingly become more and more IP-friendly, a $10/month bring-your-own account suffices to make use of their service on any platform that uses IP. Why use their pure service with all the attendant limitations they insist on throwing into it?

    Has their content improved? Not to judge by their intolerable refusal to do thing one about IM bots deployed at will by script kiddies, the mounds of steaming hot spam stinking up inboxes like a sewage treatment plant, and their total lack of commitment to putting solid money down on entertainment content anyone is willing to watch. Ooooh, aaaah, Justin Timberlake is still pining for Brittney...

    They obviously didn't catch @Home's self-inflicted fatality during their time in the ring in Portal Kombat. Portals? Who gives a flying fark? People in the main do not even bother with home pages anymore, as every marketing site on the net ceaselessly tries to change it to make their product the first thing you see. With the address entry on the Windows taskbar, I almost never see mine.

    Yahoo did someone say? Seriously, how many people go to the main Yahoo page as their starting source for everything? I have a family chock full of people who can barely spell "internet" without consulting a copy of Newsweek and still manage to look for the "any" key and even they don't use portals. Even my mother managed to stumble across www.goatse.cx (http://www.goatse.cx) without one. She's resting comfortably, thank you.

    Unless AOL is willing to give the people what they really want, they are going to continue their downward spiral. What do the people want? Well to judge by traffic on servers I've had to deal with, they want porn. As much as they can stand without being mistaken for a blind wolfman with decidely more than a roll of quarters in their pocket. That and step by step directions from Mapquest because of the growing American inability to read a map.

    "New AOL 10.0 has new adult friendly features like uncensored exclusive videos of your favorite stars that they forgot to remove from the rented camcorder, swinger chat with interactive Windows XP compatible peripherals to enhance your cyber pleasure, and free audio sex chat. You've got porn!"

    Okay, so maybe that's silly, but come on, what makes the most money on the net hands down? Okay, one hand down? :P

    America Offline is coming and we will be better off without AOL. The Internet is about content, but more like a library than McDonald's. We want a huge and growing choice, not an easy to use menu so simple it can be represented pictographically for the children who cannot read behind the counter since it is evidently not required for a work permit at sixteen any more.

    YMMV.