Once upon a time–two decades ago this year, actually–a startup called Quantum Computer Services changed the name of its moderately popular online service to America Online and added a cheery e-mail notification recorded by an employee’s husband: “You’ve got mail!”
As the 1990s progressed, the company lived up to the promise of its new moniker, doing more than any other to introduce the country to the online world. As the Internet took off, it served as the most important on-ramp to what was often called the Information Highway. And although today’s AOL is no longer the country’s dominant ISP, its services and sites add up to the fourth most popular property on the Web, from instant-messaging kingpin AIM to muckraker TMZ.com to video engine Truveo.
Over the years, it’s also found a remarkable number of ways to drive both loyal customers and random bystanders bonkers, shooting itself in its corporate foot again and again through everything from monumental technical glitches to willful strategic decisions. Herewith, a 20th-anniversary retrospective.
It’s hard to fathom today, but in 1993, most people had never heard of AOL–it only had 250,000 subscribers. And even if they had heard of it, they didn’t know how to get it. Then direct-marketing maven Jan Brandt convinced a skeptical CEO Steve Case to spend a quarter-million dollars sending out floppy disks with AOL software and a free trial offer. It worked. So they mailed out more. And more. The company ended up distributing millions of floppies and CD-ROMs; just how many has never been disclosed. They showed up in your mailbox. They were bound into your favorite computer magazines. They were stacked up at retail-store checkouts, doled out in high-school cafeterias, and inserted into cereal boxes. In short, they were like pop-up ads–except that they intruded on your real life, and there was no way to block them.
The early floppies were kind of cool, since they could be reformatted and put to good use. Not so for the CD-ROMs. And before long, many of them cluttered up the lives of two groups of people who didn’t need them: Existing AOL members and anyone who had no interest in becoming an AOL member.
Over the years, the omnipresent marketing freebies inspired both protesters and collectors, and showed up as a cultural touchstone in the darndest places (an episode of the animated TV show Futurama involved an earth-threatening meteor consisting in part of discarded discs).
Was AOL proud of what it had wrought? You betcha: When your author visited the company’s headquarters in 2001, he walked down a very long hallway with walls plastered with framed discs, displayed as proudly as if they’d been Grammy awards.
Bonus annoyance: One late disc touted 1045 free hours over 45 days, which was an insult to the intelligence of anyone with the ability to do long division–if you’d taken advantage of every minute of free time, you would have had slightly over an hour each day to sleep or otherwise do anything but use AOL.
In December, 1996, AOL moved from hourly rates to flat-rate pricing. Customers who were used to carefully monitoring their consumption began simply dialing in and staying on, maxing out the service’s inadequate capacity and leaving other subscribers with busy signals rather than the squeal of a successful dial-up connection. It was a little like a restaurant instituting an all-you-can-eat policy and then running out of food on a regular basis.
It took until 2002 before the company came to a realization that its subscribers had reached long before: “The most important thing we offer advertisers is the chance to be part of a service consumers love, and we’ve determined that pop-ups aren’t the best way to do that,” said AOL chairman Jon Miller as he announced that it was ending the practice. Funny–just about any AOL subscriber could have told the company that years earlier.
To be fair, sleazy chat rooms and porn spam were hardly unique to AOL. But they were particularly at odds with AOL’s wholesome reputation. Even today, the most popular rooms at what is now called AIM Chat tend to be a little creepy.
The Neutering of Netscape
Even if you’re the world’s biggest ISP, $4.2 billion isn’t chump change. That’s what AOL paid in 1998 to acquire Netscape Communications, whose eponymous browser remains the single most important piece of software in the history of the Web. But what did AOL do with its new toy? Almost nothing–it didn’t even dump Microsoft’s Internet Explorer as the default AOL browser. Netscape slipped into not-so-benign neglect and ever-declining usage, culminating in AOL’s formal abandonment of it in 2007.
The one thing that went right for Netscape during its AOL years stemmed from a decision that Netscape Communications made in January 1998, when it was still independent: It released the browser’s code as open source. It took years, but the move eventually led to Blake Ross and Dave Hyatt’s creation of Firefox. The two youthful programmers managed to accomplish what the billion-dollar AOL couldn’t or wouldn’t do: Reignite browser competition and put Microsoft on the defensive.
The hubbub eventually died down, in that AOL eventually struck a deal with Apple to let iChat users sign into AIM accounts and no longer actively blocks Trillian,Meebo, and other IM applications from accessing its network. But even in 2009, IM interoperability remains the exception, not the rule.
“This is the classic one plus one equals three,” said AOL president Bob Pittman in January 2000. He was speaking of the company’s audacious $146 billion takeover of Time Warner, the biggest corporate merger ever. Pittman’s math turned out to be woefully overoptimistic: When the merger was approved a year later, it turned out to be bad news for everybody involved.
Eight years later, it’s still hard to identify ways in which AOL Time Warner fulfilled Steve Case’s vision of building “a company that helps to take the Internet to the next level–connecting, informing, and entertaining people around the world as never before, and benefiting consumers in valuable new ways.”
Within two years of the merger, both Case and Time Warner chief Jerry Levin had stepped down, and it was clear the company was failing to keep its Internet access business relevant in the broadband era. In 2003, AOL suffered the ultimate corporate insult: Its name was removed from the combined company’s moniker, leaving it as plain old Time Warner; today, just about everybody believes that the company is getting ready to undo the merger by spinning off AOL.
In 2004, AOL launched a big new TV campaign. It was supposed to help revitalize the company’s image, but instead the spots were roundly mocked. One commercial featured a teeming mob of irate customers showing up at company headquarters to demand new features–the idea being that AOL was listening to its subscribers, but the subscribers looked just plain angry (you almost wondered why they weren’t brandishing pitchforks and torches)–and it resonated with real AOL users. Another commercial, featuring the AOL “running man” icon having apparently just concluded a tryst with Sharon Stone and the claim that AOL for broadband was “just a little sexier than you might have imagined,” was unsettling on so many levels that I don’t know where to start.
Back in the 1990s when it looked like this World Wide Web thing just might amount to something, AOL gave its members tools for publishing their own sites, which it dubbed AOL Hometown. In 2008, it decided to discontinue the service–not in itself an outrage. But it gave members only a month’s notice before deleting their sites and redirecting their URLs to a single blog post with a terse apology. Given that many of the sites hosted by Hometown dated to AOL’s heyday, the act amounted to an abrupt razing of one of the Internet’s few remaining historic districts.