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AOL

what once was is no longer

Mar 12th, 2008
by Lou Paglia.
6 comments

I always find this funny, and it quite related to some of my views regarding the Yahoo! situation a few days back. Here is an excerpt from today’s NYTimes, “Amid Hurdles at AOL, Chief of Its Parent Is Open To A Deal“:

AOL still enjoys many advantages that most companies can only dream about, from a prestigious brand name to an enormous revenue stream ($5.2 billion in 2007, down 33 percent from 2006). AOL’s Web sites attract 112 million visitors a month, and 9.3 million Americans still pay the company for Internet services.

I find it amazing at the difference businesses are viewed on their way up rather than down or hit maturity with no longer a steep growth curve. Granted I find that there a fundamental issues with the AOL business and there has been since the point where they missed the mark thinking $19.95/month was always going to be the path to perpetual greatness.

But, for a moment, think back to the time AOL was the media darling. When $1B, then $2B, then $3B (BILLION!) and so on made an online media company the place to be and was only sung praises. It is that oft imperceivable shift where you go from “a juggernaut, where will it stop” to “the pace of growth has slowed”.

(editor’s note: AOL’s advertising stream has slowed to 18% growth, I can think of a number of firms that pine for an 18% growth rate)

Facebook and AOL

Jun 27th, 2007
by Lou Paglia.
1 comment

A couple of days ago, I read a post by Jeff Pulver entitled Facebook: Evolving beyond being “Just a Social Network”. His comparison of Facebook and AOL, calling Facebook potentially the “new” AOL, immediately struck a contemplative cord with me. What strikes me
as so fascinating how similar the two stories are.

In the late 90′s, AOL was still a darling of the web. But its strategic issues really were showing themselves with their “walled garden” approach while the “open” web was growing, thriving and becoming a true disruption to their destination business. One could say that having everyone come to AOL was a large factor in the difficulties they ran into.

So here we are in 2007, Facebook is all the rage and creating for themselves a “new” garden. Are we heading into a scenario where much of social web experiences are found in the Facebook environment. I find it very interesting that at a high level, Facebook is in fact doing exactly what
AOL did in the past.  Now, granted, an open API architecture where developers are consciously tying their solutions and services onto the Facebook platform is quite different. In fact, I am not criticizing their solution in any way, I think their strategic move to “open up” could be a brilliant one and really changes the playing field particularly for vertically-oriented social networks.

But the premise remains the same, you can go to the web (or in this case the “social” web) but you need to come to Facebook first. Perhaps Jeff was on to something with his question, “Is Facebook the “new” AOL?”, indeed.