Wednesday, August 02, 2006

AOL officially a shell of its old self

There was a time when AOL was the bread and butter of Internet connectivity. The free trial CDs became pop culture icons, the ubiquitious @aol.com suffix was a staple for Internet e-mail addresses, and AIM was a necessity for communication. Now, the AOL e-mail address is no longer a premium thing, but a free service for all internet users. AOL is transforming itself from the stodgy dial-up player to a portal like Google and Yahoo. The Company announced today that the decline in subscribers (who are moving to broadband) means that most of AOL's services will be accessible for free, including e-mail. The dial-up business will remain, but its numbers (understandably) are rapidly declining. CNN has a nice piece covering AOL's past and future. The question for AOL is can ad revenue growth outpace their loss in revenue from typical monthly subscriber fees? Google and Yahoo have crowded the search market and with MSN making a play in the space as well, one has to wonder how much ad revenue is out there.

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