America Online's Subscriber Challenge

from the move-'em-on-to-broadband dept

Business Week is looking at the challenges AOL is facing, and wondering if they’ll be able to beat them. It appears that AOL’s strategy has consistently focused on subscriber growth, but the market is now pretty well saturated, and people are beginning to realize you don’t get much premium for the premium price you pay AOL (in fact, many of the “premiums” – such as horrible email and constant advertising – may seem quite negative when compared to what you get from other ISPs). Furthermore, AOL has always avoided pushing for broadband, ralizing that the margins are lower. The mistake in this, of course, is that the trends clearly show people migrating to broadband services, often provided by local telephone or cable companies. In that situation, people are starting to wonder why they need AOL at all. While AOL seems to have realized the issues, their response may be too little too late.

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