AOL was one of the most prominent players in the early internet industry. It sent out disks to everyone as part of its marketing campaigns. And millions of customers used AOL software daily to communicate, transfer files, and play online games. So what exactly happened to AOL?
Although the company suffered major losses from poor merging decisions and ultimately failed because it didn’t adjust to broadband connections and didn’t compete with other companies like Yahoo and Explorer, AOL is still around offering email services.
AOL and dial-up internet are key players in the internet’s history. People still use dial-up internet and the AOL software in 2022. But what happened to the company, where are they today, and what can we learn? We cover everything you need to know in the article below.
The History of AOL
AOL didn’t start as AOL; the company started as Control Video Corporation (CVC) in 1983, created by William Von Meister. CVC only sold GameLine, an online game rental service for the Atari 2600, temporarily allowing customers to download games and track high scores.
Unfortunately, CVD didn’t do too well and went under. But William Von Meister hired Steve Case as a marketing consultant. The team worked to develop Quantum Computer Services in 1985 and created Q-Link for Commodore 64 and 128 computers.
The Q-Link
The Q-Link software was revolutionary, providing users easy access to news, messaging, libraries, and games. The company rebranded the hit software in 1988 to PC-Link for computers and AppleLink for Apple devices. AppleLink was later renamed America Online, or AOL for short.
America Online was catchy and attracted users who weren’t as familiar with computers. The software provided accessible communication, file transfers, and even online games. Although the internet wasn’t as large as now, AOL had an estimated 500,000 users in the early days.
America Online flourished in the 90s through various marketing campaigns that sent out AOL disks to nearly everyone possible. As a result, a new subscriber signed up every six seconds and used the software for over two years on average. But unfortunately, this progress slowed down and started to go backward.
The Merger
America Online arguably suffered the worst mergers in corporate history with Time Warner. AOL was one of the largest internet companies and was a crucial player in the dot-com boom. Large corporate investors like Time Warner were trying to enter the internet market but didn’t have much success.
Time Warner merged with America Online for over $165 Billion around 2000. But unfortunately, the companies and cultures couldn’t intertwine, resulting in a failure that went down in history.
The Dot Com Boom
The years before 2000 were ripe with speculation around the internet and the dot-com bubble. Dotcom companies saw incredible returns on their stocks, and people were quitting their careers to enter full-time day trading ventures.
But most of the dot-com companies weren’t making any money. These companies were bleeding profit and opted for progress instead of stopping their losses. Company stocks were growing exponentially in value at the time. For instance, Qualcomm increased from 400% to 2619%.
This growth was unsustainable and inevitably failed. Most internet startups had lost roughly 80% of their market value by November 2000. The estimates were approximately $1.7 trillion lost. Advertising started to vanish, stocks failed, and large companies had to make substantial write-offs to stay afloat. The 2000s might have been the start of America Online’s downfall.
What Happened to AOL?
America Online grew exceptionally fast but couldn’t adjust to changing times. AOL prioritized dial-up internet while the world slowly moved on to broadband connections. The company tried to venture into broadband but had little success.
Other competitors like Yahoo and Explorer offered broadband connections which meant permanent internet access. Before AOL merged with Time Warner, it had 30 million subscribers. By 2007, they had lost over two-thirds and had roughly 10 million.
From there, the ship kept sinking, with multiple Chairmen and CEOS leaving throughout the years. New CEOs would bring strategies and plans to turn things around, but they couldn’t plug all the holes in the boat. As a result, the company continued to flounder for the years to come.
Is AOL Still Around?
Surprisingly, AOL is still around and available. But technically speaking, AOL is still available, not the company America Online. The name America Online was slowly dissolved after the merger in 2000. The name America Online was completely retired in 2006, and the service was officially renamed AOL.
How Does Aol Make Money?
AOL used to make most of its income through display ads, ad revenue, and dial-up services. Nowadays, the number of dial-up users is deficient and doesn’t account for much of the company’s profit.
AOL offers monthly technical support and identity theft services to around 1.5 million users. Customers pay between $9.99 and $14.99 for an AOL subscription, resulting in a reasonably profitable company. AOL might earn about $180 million of revenue each year.
What Does AOL Look Like Today?
AOL has operated independently since Time Warner announced the change in May 2008. However, the company is still surprisingly large. AOL owns Advertising.com, which is one of the largest online advertising networks.
The company also owns content sites like Huffington Post, Moviefone, Engadget, TechCrunch, gfgt, and Styelist. However, the company attempted to create a large local news and community product called Patch but lost hundreds of millions in the process.
Although the dial-up users are relatively low, AOL lives on and still offers the services. The company’s primary source of revenue is through monthly technical support and identity theft services provided to around 1.5 million users.
Customers pay between $9.99 and $14.99 for an AOL subscription, resulting in a fairly profitable company. AOL might earn around $180 million of revenue each year.