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Is AOL Finally Crashing and Burning?
An anonymous reader writes "AOL's disastrous quarterly report showed cash from continuing operations was down 44% from a year ago (adjusted operating income was down 37%), as it continues a rocky transition from monthly subscription fees to advertising. (Their quarterly report also notes 'the cessation of large-scale access subscriber acquisition campaigns' — investor-speak for the fact that AOL will finally stop mass mailings of free trial accounts.) Unfortunately, AOL's advertising business 'did even worse. Its revenues declined by $110 million... every single segment is down.' AOL has already lost 86% of the 30 million subscribers it reported in 2001 — down to just 4.3 million — but advertising hasn't yet filled the gap (possibly because many AOL ads had been displayed to the users AOL no longer has). But at least, as one technology blogger notes, AOL has finally released a mobile application, 'in the new definition of "late to the party."'"
With AOL dead, one of the primary causes of the Eternal September is over. (People won't be geting their Usenet through AOL anymore).
FTFA:
Tim Armstrong, Chairman and Chief Executive Officer. "Although we have much more significant goals for the future of AOL, we are pleased with this quarter's internal and external trends."
According to the report they went from a $90M net profit last year to a $1B net loss this year. I'm glad the CEO is pleased, but If I worked there I'd be looking for another job.
These companies that reign on top for years like AOL always seem to be almost unable to change and adapt to new times and technology. They get locked in to their success to the point that they stagnate. When change happens they just get left behind.
Maybe they should go into chat rooms and ask for help...with the CAPS lock on, of course.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Cash in on the Web 2.0 fad. Hire a hundred bloggers to blog all day long. Turn AOL.com into a huge social network, rivaling Facebook. Everyone with an AOL account is automatically added to the social network, with all privacy defaults set to "disallow all but my friends". Advertise on television that AOL is now web 2.0, more private than Facebook, and hiring bloggers.
Do they still own the Netscape brand? If so, I'd resurrect it. Make a bootable Linux CD-ROM that has Firefox on it, connects to AOL, and uses KDE as a desktop. Put them in computer stores and gaming stores. Sell them for $1 or make them free.
They could still make it through this.
>> I used them as coasters.
Yeah, they fit perfectly in the cupholder on my machine.
The CEO will probably be paid a large bonus whether he drives the company out of existence...
If the CEO is able to drive AOL out of existence, he deserves to get paid a large bonus for such a tremendous public service.
Brings back memories. People would call up, wait on hold for half an hour or more and end up on a call with me or any other SAVES rep:
*ping* (female phone voice) AOL. Saves. [connect]
Me: Thank you for calling America Online, this is Pezbian. How can I help you have an even better online experience today?
Luser: Cancel my account. (yeah. So original.)
What I'd say while playing Solitaire on the computer: I'm sorry to hear things aren't going well for you. Let's get started.
What I'd be thinking: Okay so what are you? Computer-stupid, no longer in need of training wheels, sick of overpaying or just trying to make a stand?
From there, it was a matter of talking them into staying. I probably gave away a lifetime worth of free service months in two month blocks during the few months I was there. Did it matter? No, and I'll explain why later. If you were a jerk, you got transferred or hung up on. We were taught never to hang up on lusers, but disconnecting the cord from the back of the phone didn't count as a hangup. I did it a couple dozen times when I'd get cursed at. There were often logs from previous support reps in the Merlin system regarding customer behavior so I pretty well knew who was going to be trouble and who was going to get free stuff.
At the end of the call, there were sometimes these "Special Member Benefits" where lusers would hear a speil for something else. I got $1.25 if they would just listen to it. Some people were wise. "Do you get a bonus if I just listen to it?" "Yes I do." "Well since you've helped me so much, you're going to get that bonus." Schweet. While I was there, the SMB was a Sprint long distance deal. Yeah, for a landline. Remember those? I probably got $200 a month just off of those transfers.
Pay: $8 an hour plus bonuses. Bonuses... boy howdy... 80+% of your income. I didn't believe it until I got my first 90-day long-term retention check. That's correct. Your long-term retention bonus was on a 90 day scale. Not a year. Why? Ultimately, it was because the revenue generated by each user for AOL was $125 a month. That's on top of the $23.90 a month they were charging for you to be their lab rat.
I wasn't delusional enough to expect the crazy bonus checks to last forever since the dollars for banner ads (no matter how attention-whoring/seizure-inducing) boom was already crashing hard and popups/pop-unders were starting to become the norm.
The funniest thing about working there was the special event days they'd have where Warner Bros movies that were still in theaters were screened in the call center during work hours. The techs and everyone but SAVES would be watching while SAVES saw it as a distraction from the big money. Some reps were making six figures a year. I kid you not. You were on a tiered scale where you were paid for saves per month and the more you got, the more each one paid you. Those who were making that kind of money had little time for anything else, however. 12-16 hour days non-stop. One lady hadn't had a day off in three months and slept at work sometimes, but she did make $125,000 a year this way.
In the middle of my time there, an "All Hands" meeting was called where everyone in the callcenter went to a big reception center and got put through a big dog and pony show. It was mostly about a new SAVES pay scale change that was more focused on quantity than quality. This wasn't beneficial to my style. I was all about long term. I didn't care about the average $1.50 24-hour or pissant $.50 30-day retention bonuses. I was all about the 90-day kind that paid like $9 each if I remember correctly. I was going to take a big hit on my paychecks to the extent that it just wasn't worth keeping that job.
It's worth mentioning that, during the Q&A portion, a butthurt tech dared ask when the tech support people were going to be paid like Saves reps. The suit on stage snickered slightly while the question was met with groans and laughter from Saves goons like myself. The
In a world of the blind, the one-eyed man is king--and the two-eyed man is a heretic.
Cash in on the Web 2.0 fad. Hire a hundred bloggers to blog all day long. Turn AOL.com into a huge social network, rivaling Facebook
They tried this, multiple times. And failed, multiple times. I know, I was deeply involved with the effort. First came AIMPages.com. Millions of dollars spent, negligible uptake. Then they tried building another social network based off of the old Member Directory. That never even made it out the door. Then they bought Bebo for about 5x what it was worth and only succeeded in driving away those customers it already had.
There are a lot of really smart people at AOL down in the trenches -- some of the most knowledgeable DBAs, SAs, and developers I've worked with in 20 years I met at AOL. Most of the smart ones fled or got laid off but I still know a few of the good ones who are still there, and they are the only reason anything at AOL works at all.
Executive leadership is lacking, to say the least, and they cripple every product by trying to emulate every feature a competitor has without understanding that "actually working" and "not being slow as crap" are essential features for any product. If AOL was building houses, you'd have 3 dozen managers obsessing over having marble counters, oak cabinets, and Italian tile floors, and ignoring the workers who were telling them that the roof leaked, the plumbing backed up, and the foundation was cracked.
Netscape? They pretty well killed that brand off years ago. They bought Netscape for the traffic going to the portal site, which is why they created the Mozilla foundation and dropped the browser code like a hot potato. And the traffic that they paid so much to get? 90% of it was gone within a year of the takeover. They made a half-assed attempt to resurrect it as a Digg-style social networking site, but that took off like a lead balloon.
Why is it that the proponents of "one nation under God" are so eager to get rid of "liberty and justice for all"?