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AOL LLC
Company typeOwned by Time Warner (95%), Google (5%)
IndustryInternet & Communications
Founded1983 (as CVC)
HeadquartersDulles in Loudoun County, Virginia, USA
Key people
Jonathan Miller, Ted Leonsis
ProductsInternet service
Revenue(Q2 '06): $2.0 B USD (Decrease2%)
Number of employees
about 20,000
Websitewww.corp.aol.com www.aol.com

AOL LLC (formerly America Online, Inc) is an American online service provider, bulletin board system, and media company operated by Time Warner. Based in Dulles, Virginia, with regional branches around the world, the former "goliath among Internet service providers"[1] had at one time a customer base that reached over 30 million subscribers[1] and spanned several continents.

AOL is often regarded as the most difficult Internet service to unsubscribe from, which leads to its now tainted reputation.[2][3]

In 2000 AOL and Time Warner announced plans to merge, in a deal approved by the FTC on January 11 2001. The deal came to exemplify the bursting of the Internet bubble, and was later considered one of the worst corporate mergers in history, destroying over $200 billion in shareholder value.[4]

AOL is a company in transition, made evident by discussions of buy-outs and joint ventures during a period of dramatic decline in AOL's subscriber base. [1] News reports in fall 2005 identified companies such as Yahoo!, Microsoft, and Google as candidates for turning AOL into a joint venture[5]; those plans were apparently abandoned when it was revealed on December 20, 2005 that Google would purchase a 5% share of AOL for $1 billion. As of July 2006, the transition continues, with the decline of AOL's US subscriber base reaching less than 19 million subscribers[1] in a year that saw PC World declare it the worst tech product of all time.[6]

History

AOL release timeline
1989 AOL for Macintosh gains popularity as a Mac BBS
1991 AOL for DOS launched
1993 AOL for Windows launched, AOL 2.0 for Macintosh launched
1994 AOL 2.0 for Windows launched
1995 AOL 3.0 launched
1998 AOL 4.0 launched
1999 AOL 5.0 launched
2000 AOL 6.0 (K2) launched
2001 AOL 7.0 (Taz) launched
2002 AOL 8.0 (Spacely) launched
2003 AOL 8.0 Plus (Elroy) launched
2003 AOL 9.0 Optimized (Bunker Hill) launched
2004 AOL 9.0 Optimized SE/LE (Tahiti) launched
2004 AOL 9.0 Security Edition SE/LE (Strauss) launched
2006 AOL Suite launched
File:AOL.gif
Logo used until late 2004.

Beginnings

AOL began as a short-lived venture called Control Video Corporation (or CVC), founded by William von Meister. Its sole product was an online service called Gameline for the Atari 2600 video game console after von Meister's idea of buying music on demand was rejected by Warner Brothers. (Klein, 2003) Subscribers bought a modem from the company for $49.95 and paid a one-time $15 setup fee. Gameline permitted subscribers to temporarily download games and keep track of high scores, at a cost of approximately $1 an hour.

In 1983, the company nearly went bankrupt, and an investor in Control Video, Frank Caufield, had a friend of his, Jim Kimsey, brought in as a manufacturing consultant. That same year, Steve Case was hired as a part-time consultant; later on that year, he joined the company as a full-time marketing employee upon the joint recommendations of von Meister and Kimsey. Kimsey went on to become the Chief Executive Officer (CEO) of the newly renamed Quantum Computer Services in 1985, after von Meister was quietly dropped from the company.

Case himself rose quickly through the ranks; Kimsey promoted him to vice-president of marketing not long after becoming CEO, and later promoted him further to executive vice-president in 1987. Kimsey soon began to groom Case to ascend to the rank of CEO, which he did when Kimsey retired in 1991.

File:Aoleuropelogo.JPG
Logo used in Europe.

Kimsey changed the company's strategy, and in 1985 launched a sort of mega-BBS for Commodore 64 and 128 computers, originally called Quantum Link ("Q-Link" for short). In May 1988, Quantum and Apple launched AppleLink Personal Edition for Apple II and Macintosh computers. After the two companies parted ways in October 1989, Quantum changed the service's name to America Online.[7] [8] In August 1988, Quantum launched PC Link, a service for IBM-compatible PCs developed in a joint venture with the Tandy Corporation.

In the early years of AOL the company introduced many innovative online interactive titles and games, including graphical chat environments Habitat (1986) and Club Caribe (1989), the first online interactive fiction series QuantumLink Serial by Tracy Reed (1988), Quantum Space, the first fully automated Play by email game (1989), and the original Dungeons and Dragons title Neverwinter Nights, the first Massively Multiplayer Online Role Playing Game (MMORPG) to depict the adventure with graphics instead of text (1991).

In February 1991 AOL for DOS was launched using a GeoWorks interface followed a year later by AOL for Windows. In October 1991, Quantum changed its name to America Online. These changes coincided with growth in pay-based BBS services, like Prodigy, CompuServe, and GEnie. AOL discontinued Q-Link and PC Link in the fall of 1994.

Massive growth

Case drove AOL as the online service for people unfamiliar with computers, in particular contrast to CompuServe, which had long served the technical community. AOL was the first online service to require use of proprietary software, rather than a standard terminal program; as a result it was able to offer a graphical user interface (GUI) instead of command lines, and was well ahead of the competition in emphasizing communication among members as a feature.

In particular was the Chat Room (borrowed from IRC), which allowed a large group of people with similar interests to convene and hold conversations in real time, including:

  • Private rooms — created by any user. Hold up to 27 people.
  • Conference rooms — created with permission of AOL. Hold up to 48 people and often moderated.
  • Auditoriums — created with permission of AOL. Consisted of a stage and an unlimited number of rows. What happened on the stage was viewable by everybody in the auditorium but what happened within individual rows, of up to 27 people, was viewable only by the people within those rows.

There were also text games played in the chat rooms, known as AOL chatroom game.

Under Case's guidance, AOL committed to including online games in its mix of products even when it was only a Commodore 64 service. It hosted the first Play by email game from any service Quantum Space (1989-1991); the first graphical online community (Club Caribe from LucasArts); the first graphical MMORPG, Neverwinter Nights from Stormfront Studios (1991-1997) and the first chat room-based text role-playing game Black Bayou (1996-2004), a horror role-playing game from Hecklers Online and ANTAGONIST, Inc.

AOL quickly surpassed GEnie, and by the mid-1990s, it passed Prodigy (which for several years allowed AOL advertising) and CompuServe.

Originally, AOL charged its users an hourly fee, but in 1996 this changed and a flat rate of $19.99 a month was charged. Within three years, AOL's userbase would grow to 10 million people. During this time, AOL connections would be flooded with users trying to get on, and many canceled their accounts due to constant busy signals. Also, games which used to be paid for with the hourly fee migrated in droves to the Internet.

AOL was quickly running out of room in 1996 for its network at the Vienna, VA campus and and moved to Dulles, VA a short distance away. The move to the Dulles took place in 1997 and provided room for future growth.

AOL was relatively late in providing access to the open Internet. Originally, only some Internet features were accessible through a proprietary interface but eventually it became possible to run other Internet software while logged in through AOL. They were the first online service to seamlessly integrate a web browser into content.

AOL introduced the concept of Buddy Lists, leveraging their one-on-one instant messaging technology.

Change in focus

Since its merger with Time Warner, the value of AOL has dropped from its $200 billion high and it has seen similar losses among its subscription rate. It has since attempted to reposition itself as a content provider similar to companies such as Yahoo! as opposed to an Internet service provider which delivered content only to subscribers in what was termed a "walled garden". In 2005, AOL broadcast the Live 8 concert live over the Internet, and thousands of users downloaded clips of the concert over the following months.

AOL eventually announced plans to offer subscribers classic television programs for free with commercials inserted via its new IN2TV service. At the time of launch, AOL made available Warner Bros. Television's vast library of programs, with Welcome Back Kotter as its marquee offering. Other shows include Scarecrow and Mrs. King, The F.B.I., F Troop, and Growing Pains.

In 2006, AOL informed customers that it would increasing the price of its dial-up access to $25.90. The increase was part of an effort to migrate the service's remaining dial-up users to broadband, as the increased price was the same price they had been charging for monthly DSL access. [9]

One of AOL's recently added premium services is AOL Total Talk, a VoIP Internet service.

On April 3, 2006, AOL announced that the full name "America Online" will be retired, and that the official name of the service is now "AOL".[10]

On August 2, 2006, AOL announced that they will give away e-mail accounts and software previously available only to its paying customers in a strategy shift likely to accelerate the decline in its core Internet access business. The decision removes the few remaining reasons for AOL subscribers to keep paying when they already have high-speed Internet access through a cable or phone company. AOL hopes that by making services free, it can draw Internet users to its ad-supported Web sites and keep them from defecting to Microsoft, Google and Yahoo!, which have offered free e-mail for years.

CD-ROM distribution

See also: AOL disk collecting

AOL was able to rapidly bolster its growth by mailing out sign-up diskettes and CD-ROMs containing free trials to hundreds of millions of households. Once offering only a few hours of free service, the discs now include up to a month's worth of free subscription time.

This long and relentless campaign has produced a backlash, however. One program, called No More AOL CDs, seeks to gather one million unwanted AOL CDs and dump them at AOL headquarters. Other organizations have objected upon both environmental and privacy grounds; for example, many environmentalists say that AOL's CDs are largely unwanted and result in massive non-biodegradable plastic waste.

AOL's mailings have never violated the law, though, and have consistently interested new customers. Although AOL has provided means for people to remove themselves from AOL mailing lists, No More AOL CDs has documented claims that these removal attempts are sometimes ineffective.

Others view AOL disks as valuable collectible items due to the vast number of CD-ROM design variations.

Controversies

Community Leaders

Prior to the middle of 2005, AOL used volunteers called Community Leaders, or CLs, to monitor chatrooms, message boards, and libraries. Some community leaders were recruited for content design and maintenance using a proprietary language and interface called RAINMAN, although most content maintenance was performed by partner and internal employees.

In 1999, Kelly Hallissey and Brian Williams, former Community Leaders and founders of an anti-AOL website, filed a class action lawsuit against AOL citing violations of U.S. labor laws in its usage of CLs. The Department of Labor investigated but came to no conclusions, closing their investigation in 2001. In light of these events, AOL began drastically reducing the responsibilities and privileges of its volunteers in 2000. The program was eventually ended on June 8, 2005. Current Community Leaders at the time were offered 12 months of credit on their accounts.

Billing disputes

AOL has faced a number of lawsuits over claims that it has been slow to stop billing people after their accounts have been cancelled, either by the company or the user. In addition, AOL changed its method of calculating used minutes in response to a class action lawsuit. Previously, AOL would add fifteen seconds to the time a user was connected to the service and round up to the next whole minute (thus, a person who used the service for 11 minutes and 46 seconds would be charged for 13 minutes). AOL claimed this was to account for sign on/sign off time, but because this practice was not made known to its customers, the plaintiffs won (some also pointed out that signing on and off did not always take 15 seconds, especially when connecting via another ISP). AOL disclosed its connection time calculation methods to all of its customers and credited them with extra free hours. In addition, the AOL software would notify the user of exactly how long they were connected and how many minutes they were being charged.

Account cancellation

In response to approximately 300 consumer complaints, New York Attorney General Eliot Spitzer’s office began an inquiry of AOL’s customer service policies. The investigation revealed that the company had an elaborate system for rewarding employees who purported to retain or "save" subscribers who had called to cancel their Internet service. In many instances, such retention was done against subscribers’ wishes, or without their consent.

Under the system, consumer service personnel received bonuses worth tens of thousands of dollars if they could successfully dissuade or "save" half of the people who called to cancel service. For several years, AOL had instituted minimum retention or "save" percentages, which consumer representatives were expected to meet. These bonuses, and the minimum "save" rates accompanying them, had the effect of employees not honoring cancellations, or otherwise making cancellation unduly difficult for consumers.

Many consumers complained that AOL personnel ignored their demands to cancel service and stop billing.

On August 24 2005, America Online agreed to pay $1.25 million to the state of New York and reformed its customer service procedures. Under the agreement, AOL will no longer require its customer service representatives to meet a minimum quota for customer retention in order to receive a bonus. However, many AOL users outside New York still claim to have problems cancelling their accounts.

On June 13, 2006, a man named Vincent Ferrari documented his account cancellation phone call in a blog post, stating he had switched to broadband years earlier. In the recorded phone call, the AOL representative refused to cancel the account unless the 30-year-old Ferrari explained why AOL hours were still being recorded on it. Ferrari insisted that AOL software was not even installed on the computer. When Ferrari demanded that the account be canceled regardless, the AOL representative asked to speak with Ferrari's father, for whom the account had been set up. The conversation was aired on CNBC. When CNBC reporters tried to have an account on AOL cancelled, they were hung up on immediately and it ultimately took more than 45 minutes to cancel the account.[11]

On July 19, 2006, AOL's entire retention manual was released on the Internet. [1] (7MB PDF)

On August 3, 2006, Time Warner announced that the company would be dissolving AOL's retention centers due to its profits hinging on $1 billion in cost cuts. The company estimates that it will lose more than six million subscribers over the next year. [2]

Software

In 2000, AOL was served with an $8 billion lawsuit alleging that its (now dated) AOL 5.0 software caused significant difficulties for users attempting to use third-party Internet service providers. The lawsuit sought damages of up to $1000 for each user that had downloaded the software cited at the time of the lawsuit. AOL later agreed to a settlement of $15 million, without admission of wrongdoing. Now, the AOL software has a feature called AOL Dialer, or AOL Connect on Mac OS X. This feature allows users to connect to the ISP without running the full interface. This allows users to use only the applications they wish to use, especially if they do not favor the AOL Browser.

Usenet newsgroups

When AOL gave clients access to Usenet in 1994, they hid at least one newsgroup in standard list view: alt.aol-sucks. AOL did list the newsgroup in the alternative description view, but changed the description to "Flames and complaints about America Online".

Terms of Service (TOS)

There have been many complaints over rules that govern AOL's members conduct, called the Terms of Service, which apply to everyone who uses AOL, regardless of age, or where an AOL member is on the Internet. Claims are that these rules are too strict to follow and do not allow swearing. TOS is known as COS (conditions of service) in the UK.

Certified e-mail

In early 2005, AOL stated its intention to implement certified e-mail, which will allow companies to send email to users with whom they have pre-existing business relationships, with a visual indication that the email is from a trusted source and without the risk that the email messages might be blocked or stripped by spam filters. This decision has drawn fire from MoveOn, which characterizes the program as an "e-mail tax". Esther Dyson defended the move in a New York Times editorial saying "I hope Goodmail succeeds, and that it has lots of competition. I also think it and its competitors will eventually transform into services that more directly serve the interests of mail recipients. Instead of the fees going to Goodmail and AOL, they will also be shared with the individual recipients."[12]

Censorship in mainland China

AOL, along with Google, Microsoft, Yahoo, Cisco, Skype, and others, has cooperated with the Chinese government in implementing a system of Internet censorship in mainland China.

Many critics of these corporate policies argue that it is wrong for companies to profit from censorship and restrictions on freedom of the press and freedom of speech. The alternative, however, is censorship of the entire website.

Human rights advocates such as Human Rights Watch and media groups such as Reporters Without Borders point out that if companies would stop contributing to the authorities' censorship efforts the government could be forced to change.

Search data release

Main article: AOL search data

On August 4th, 2006, AOL released a compressed text file on one of its websites containing twenty million search keywords for over 650,000 users over a 3-month period, intended for research purposes. AOL pulled the file from public access by the 7th, but not before it had been mirrored, P2P-shared and seeded via BitTorrent.

Company purchases

As it grew, AOL purchased many other software companies, including:

Notable persons associated with AOL

McAfee

AOL includes McAfee VirusScan and McAfee Firewall Express for its subscribers. At the time of the release, McAfee VirusScan was 8.0 and Firewall Express was 5.0. Initially, it was only available to subscribers using the AOL 8.0 and 9.0 software; but since is available to anyone as low as 6.0.

AOL Keywords

Keywords are words or phrases that act as shortcuts to AOL areas and Web sites. For example, to view football news and results, you go to AOL Keyword: Football.

Many companies used to pay AOL to have their content featured as an AOL Keyword. One used to see AOL Keywords listed on products or in advertisements in much the same way that Web URLs are used today.

Some AOL keywords at AOL USA, AOL Germany, AOL Canada or AOL UK only works in these countries and cannot be used by AOL customers in other countries (and vice versa). Every other country (where AOL is available) has their own AOL keyword(s).

Free services

On Wednesday August 2, 2006 AOL announced: "We’re in the process of offering all of our content and many of our services for free -- with or without an AOL Internet connection." Among the announced plans are free email services similar to many 'free' email providers.

Movie studios partnership

On Friday, August 25, 2006, AOL announced that it had signed a deal with the major movie studios to open an online video store allowing users to "download to own" full length movies and television shows. The deal was signed with News Corp.'s 20th Century Fox, Sony Corp.'s Sony Pictures Home Entertainment, NBC Universal's Universal Pictures, and Time Warner Inc.'s Warner Bros. Home Entertainment Group[15]

See also

References

  1. ^ a b c d Holahan, Catherine (2006-07-31). "Will Less Be More for AOL?". BusinessWeek. Retrieved 2006-08-01. {{cite news}}: Check date values in: |date= (help)
  2. ^ http://www.stltoday.com/stltoday/business/columnists.nsf/techtalk/story/A0F7FD49EFA6565A862571BF006C005A?OpenDocument
  3. ^ http://www.msnbc.msn.com/id/13447232/
  4. ^ Li, Kenneth (2006-07-26). "AOL expected to scrap charges". Yahoo!. Retrieved 2006-08-09. {{cite news}}: Check date values in: |date= (help)
  5. ^ Yang, Catherine (2005-11-11). "Has AOL Met Its Match?". BusinessWeek. Retrieved 2006-08-01. {{cite news}}: Check date values in: |date= (help)
  6. ^ Tynan, Dan (2006-05-26). "1. America Online (1989-2006)". The 25 Worst Tech Products of All Time. PC World. Retrieved 2006-07-24. {{cite news}}: Check date values in: |date= (help)
  7. ^ "History of Computing Industrial Era (1985-1990)". The History of Computing Project. 2006-03-20. Retrieved 2005-09-24. {{cite web}}: Check date values in: |date= (help)
  8. ^ "Apple II history chapter 22". 2002-12-31. Retrieved 2005-09-24. {{cite web}}: Check date values in: |date= (help)
  9. ^ Mills, Elinor. "AOL hanging up on dial-up customers?". CNET. Retrieved August 3. {{cite web}}: Check date values in: |accessdate= (help); Unknown parameter |accessyear= ignored (|access-date= suggested) (help)
  10. ^ "America Online Changes Its Name to AOL". 2006-04-03. Retrieved 2006-07-24. {{cite news}}: Check date values in: |date= (help)
  11. ^ Wells, Jane (2006-06-21). "How hard can it be to cancel an AOL account?". CNBC. Retrieved 2006-07-24. {{cite news}}: Check date values in: |date= (help)
  12. ^ Dyson, Esther (2006-03-17). "You've Got Goodmail". New York Times. Retrieved 2006-07-24. {{cite news}}: Check date values in: |date= (help)
  13. ^ http://press.aol.com/article_display.cfm?article_id=1031&section_id=14
  14. ^ http://biz.gamedaily.com/industry/feature/?id=13535
  15. ^ http://www.washingtonpost.com/wp-dyn/content/article/2006/08/24/AR2006082401544.html
  • Klein, Alec (2003). Stealing Time: Steve Case, Jerry Levin, and the Collapse of AOL Time Warner. Simon & Schuster. ISBN 0-7432-5984-X.
  • Mehta, Stephanie N. & Vogelstein, Fred (Nov. 14, 2005). "AOL: The Relaunch". Fortune, p. 84–88.
  • Ed Foster's Gripelog || Fifty Ways to Leave AOL
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