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America Online

File:AOL logo.png
Company type	Jointly owned by Time Warner (95%) and Google (5%)
Industry	Internet & Communications
Founded	1985
Headquarters	Dulles, Virginia
Key people	Jonathan Miller, Ted Leonsis
Products	ISP
Revenue	$8.7 billion USD (2004)
Number of employees	about 20,000
Website	www.aol.com

America Online, or AOL for short, is a U.S.-based online service provider, Internet service provider, and media company operated by Time Warner. Based in Dulles, Virginia, a community in Loudoun County, Virginia, with regional branches around the world, it is by far the most successful proprietary online service, with more than 32 million subscribers at one point in the US, Canada, Germany, France, the United Kingdom, Latin America (declared bankrupt in 2004), Japan and formerly Russia. In early 2005, AOL Hong Kong stopped its service. In the fall of 2004, AOL reported total subscribers had dropped to 24 million, a drop of over a quarter of its subscribers. In late 1996, AOL suspended all dialup service within Russia in the face of massive billing fraud, forcing the company into a rare case of full market retreat.

For many Americans through the mid to late 1990s, AOL was the Internet, but the rise of high-speed Internet access from cable and telephone companies as well as the increasing sophistication of the public in handling browsers and other Internet utilities has cut into its user base. In 2000 AOL and Time Warner announced plans to merge, and the deal was approved by the Federal Trade Commission on January 11 2001. This merger was primarily a product of the Internet mania of the late 1990's, known as the Internet bubble. The subsequent massive decline in value of stocks such as AOL resulted in much recrimination over the merger. Also, the merger with AOL allowed for Time Warner to vote off WCW (World Championship Wrestling).

News reports in the fall of 2005 indicated a renewed interest in buying out AOL. Suitors such as Microsoft, Google, Yahoo and Comcast have had discussions with Time Warner about a possible purchase, and on December 16, 2005, Time Warner and Google announced that they were starting exclusive talks for Google to purchase $1 billion in AOL stock, a 5% share.

Although its dialup market is shrinking as more members switch to high-speed services, the success of its AOL for Broadband program has helped it to maintain members that would otherwise totally drop the AOL service. This combined with its growing advertising revenue through its relationship with Google, AOL collected 8.7 billion US dollars in revenue for 2004. In early March 2006, AOL informed its members that the narrowband monthly rate would be increasing from $23.95 to $25.90.

History

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 when he himself retired, which Case did in 1991.

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. , In August 1988, Quantum launched PC Link, a service for IBM-compatible PCs developed in a joint venture with the Tandy Corporation.

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); and the first graphical MMORPG, Neverwinter Nights from Stormfront Studios (1991-1997) and the first chatroom-based text role-playing game Black Bayou, 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 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.

Since its merger with Time Warner, the value of AOL has dropped from its $200 billion high and it has seen a 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.

More recently, AOL has 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.

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

CD-ROM distribution

AOL has tirelessly pushed itself through regularly mailing sign-up diskettes and CD-ROMs to over 100 million households, helping forge dominant growth. This campaign has been made particuarly effective by the way of these CDs offer free trials. In the early years of AOL's practice of offering free trials with CDs, the trials were usually only a few hours. The trial time has gradually increased, and now the CDs tend to offer a month's free trial.

However, this long campaign has produced a backlash, including a program called No More AOL CDs that seeks to gather one million unwanted AOL CDs and dump them at AOL headquarters. Other organizations have objected under both environmental and privacy grounds. Environmentalists say that AOL's CDs are largely unwanted and result in massive non-biodegradable plastic waste. However, AOL's mailings have never violated the law, and always interest some people. AOL has also always provided means for people to remove themselves from AOL mailing lists, though 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 drastically began 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. Also for a time AOL had a bot named CATWATCH which would pop into user created private rooms where TOS violations MAY be occuring, and everyone in the room would be disconnected from AOL and get a TOS strike against their account.

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 lawsuit 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 for.

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.

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. It is also notable that AOL users are required to use the AOL browser (a variant of Netscape) to access the World Wide Web and their E-Mail accounts. This has brought upon many complaints, as it guarantees that AOL has ultimate control over what the user can access, and clearly restricts the user from using any alternative Web browsers and/or E-Mail clients which most technically proficient users would consider safer and faster. However, the main complaint regarding this factor has undoubtedly concerned the excessive advertizing schemes present upon browser startup.

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, call the Terms Of Service, which apply/applied to everyone who used AOL, regardless of age, or where an AOL member is on the internet. Claims are that these rules are too strict to follow, do not allow swearing, or a very flexible rule called room disruption.

Certified e-mail

In early 2005, AOL has 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".

Company purchases

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

• BookLink bought in December 1994.
• NaviSoft's NaviServer (later to become AOLserver) in 1994.
• ImagiNation Network (I.N.N.) from AT&T in 1996.
• CompuServe in February 1998.
• Mirabilis (maker of ICQ) in 1998.
• PLS text-search software in 1998,
• Nullsoft (maker of Winamp), in 1999 for $86 million
• Netscape, in 1999 for $4.2 billion.
• Mapquest in 1999.
• Tegic in December 1999.
• Singingfish search engine, November 2003.
• Advertising.com, an Internet advertising agency, in June 2004.
• MailBlocks, a personal, Web-based email service, in August 2004.
• Wildseed, a privately held mobile software vendor, in August 2005.
• Xdrive, a leading provider of online storage and file sharing services, also in August 2005.
• Weblogs, Inc., a blogging network that runs such sites as Engadget, Autoblog, Cinematical and TVSquad, in October 2005, for $30 million.
• Truveo, Inc., a leading video search company, in December 2005, for an undisclosed value.

Notable persons associated with AOL

• Jim Kimsey (former CEO and board chairman)
• Steve Case (former CEO and board chairman)
• Jan Brandt (former President of Marketing)
• Justin Frankel (Nullsoft founder)
• Ted Leonsis (Vice-Chairman, President AOL Audience Group)
• Michael Powell (during merging with Time Warner)
• Marc Andreessen (Netscape co-founder)
• Jason Smathers (former AOL employee convicted of stealing the Internet provider's entire subscriber list -- over 30 million consumers, and their 90 million screen names -- and selling it to a known spammer.)
• Jason Calacanis (Co-founder of Weblogs, Inc.)

AOL Computer Checkup

AOL Computer Checkup is a service offered by AOL to AOL members. It is a performance and hardware analyzer, not unlike the scans in Norton Utilities.

McAfee

AOL also included McAfee VirusScan and McAfee Firewall Express in some versions

See also

• AOHell
• AOHack programs
• Sessions@AOL
• AOL Browser
• GAMEY

References

• 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.

External links

• AOL US
• AOL Brasil
• AOL Canada
• AOL Germany
• AOL France
• AOL México
• AOL UK
• AOL Japan
• AOL: A History
• AOL Disk Collection
• Important Dates & A Look at AOL's Evolving Interface
• The "No More AOL CDs" campaign
• alt.aol-sucks: Anti-AOL Usenet group (via Google)
• CNN.com Disgruntled AOL 5.0 users seek up to $8 billion in damages
• AOL fraud
• AOL's In2TV

• America Online
• Online service providers
• Time Warner subsidiaries