AOL Is Still the Weirdest Successful Tech Company in America
theatlantic.com
theatlantic.com
I've seen this many, many times.
Yet, I install Opera four years ago and come home to find its become his default browser and he knows the hotkeys better than I do. Go figure...
I just checked mailing list stats for our largest UK customer - where AOL never reached penetration anywhere near the US - and while AOL is by no means huge, they're the fourth largest e-mail provider represented on their list, after Hotmail (which out-distances everyone by a wide margin in the UK) and Gmail / Yahoo (which one is in second depends on whether you count Yahoo's various partnerships - they provide e-mail and other content services for some major ISPs).
Techies in particular tends to get very surprised when they realize that the entire world don't use Gmail... (gmail accounts for about 9%-10% of the subscribers on that list, compared to about 35% for Hotmail...)
This is a restaurant chain that covers a pretty good cross section of the UK, with a list of near a million users.
Especially since the financial crisis, people have been very budget conscious, and a lot of people are on these mailinglists to get offers for lunch etc.
We actually have a nice timeline of the crisis: When Lehmans toppled, bookings at the restaurants of our clients near their building shot through the roof. And looking back at bounce stats, we can tell which firms had large layoffs when, as we suddenly had 30% of addresses at one city firm bounce, 50% of another, and so on.
You're right that probably does account for a lot of AOL addresses, though. But the size of Talk Talk as a whole (don't know the breakdown between the Talk Talk brand and AOL brand for their ADSL) is too small to account for even a majority of the AOL addresses, and there are disproportionally many AOL addresses vs. market share compared to other operators like BT.
In some ways, perhaps dial-up is a better proposition than DSL or cable due to its slowness. It does discourage distraction and waste of time on the net, and since I don't browse YouTube and use
links2 -g
As for email, I still do use an AOL email address. I use it for Facebook and AIM, but I use my Hotmail (now "Outlook") for personal email and inquiries.
But AIM. Can't live without it.
If AOL calls it quits on AIM, I will probably shed a few tears. There is nothing like AIM left. Facebook is locked-down and doesn't support buddy lists, MSN is dead, Skype is proprietary and forces you to use its own client, and nobody I know has a Google Talk account and my IM client doesn't support it, even though I've tried to set it up as a Jabber/XMPP account.
In addition to the practical merits you've listed, nothing else sips bandwidth quite like AIM. Despite being the champion of open-source communication, XMPP is fairly awful on low-bandwidth, high-latency links. AIM, partially as a product of the era in which it was engineered, doesn't care a bit.
Facebook Chat has a Jabber interface.
Among my social group, everyone now uses Facebook Chat, iMessages, or Google Talk. I think I only have one or two people still on AIM. I think the problem with AIM is the lack of a default mobile client. Everyone's phone has Facebook installed, or comes with either iMessages or Google Talk. Nobody bothers to install an AIM client (I'm not even sure if there's an official one, and if it supports Push notifications)
https://itunes.apple.com/us/app/aim-free-edition/id281704574...
(not that I've ever used it, mind you. Just wanted to make it clear that it existed)
Seriously, there are massive swaths of people out there who pay for high speed internet _and_ AOL because they just don't know any better.
No, I don't do that job anymore (yay!). And no, I never explained to any of those people they are being stupid.
At that point, it was ~40% of revenue and ~80% of profits from subscribers. Apparently they've gone nowhere, fast.
Of course, with monopolies you get the kind of perverse incentives you're describing. Phone technology and prices stagnated for a decade or two when Bell had a de facto monopoly. I would still argue that a free market tends to produce fewer monopolies than any other practical regulatory scheme, but that's a topic for another post.
You should have an asterix next to "making a ton of money."
*Past performance is not indicative of future results!
More than 100 percent of its profits? Can someone explain that to me?
Therefore, the profits of those two divisions is greater than the profit of the company?
It's a shorthand way for the writer to say that subscriptions are such a cash cow, it really doesn't matter what the other divisions are doing.
If you make $168M from subscriptions and lose $5M from media, then subscriptions account for about 103% of your profits (168/(168-5)).
So, the revenue from their subscriptions/AIM customers is not merely the only thing which is profitable for them, but the other lines of business are all run at a loss.
Fictional example:
Line Revenue - Expenses = Profit dialup 1000 - 100 = 900 everything else 200 - 500 = (-300) Totals: 1200 - 600 = 600
Losing money isn't hard.
Stock A rising more than stock B only means that the market has been more pleasantly surprised about A than B.
So given that the point of the article is "AOL is doing surprisingly well thanks to low expectations", it'd be natural that the stock would gain more than companies that people expect more from.
Also, I'd have a hard time calling AOL successful (which the article does). They're net profitable, but on something that's doomed. And the thing that's supposed to save them, selling ads against content, is looking pretty sickly as well. Profit is correlated with success, but they're definitely different.
I guess now, in hindsight, im glad they were working with tech I didn't want to put my hands into or someday, I would be looking for another job.