AOL (stylized as Aol., formerly a company known as AOL Inc. and originally known as America Online[1]) is an American web portal and online service provider based in New York City, and a brand marketed by Yahoo! Inc.
The service traces its history to an online service known as PlayNET. PlayNET licensed its software to Quantum Link (Q-Link), which went online in November 1985. A new IBM PC client was launched in 1988, and eventually renamed as America Online in 1989. AOL grew to become the largest online service, displacing established players like CompuServe and The Source. By 1995, AOL had about three million active users.[2]
AOL was (at one point) the most recognized brand on the Web in the United States. AOL once provided a dial-up Internet service to millions of Americans and pioneered instant messaging and chat rooms with AOL Instant Messenger (AIM). In 1998, AOL purchased Netscape for US$4.2 billion. By 2000, AOL was providing internet service to over 20 million consumers, dominating the market of Internet service providers (ISPs).[3] In 2001, at the height of its popularity, it purchased the media conglomerate Time Warner in the largest merger in US history. AOL shrank rapidly thereafter, partly due to the decline of dial-up and rise of broadband.[4] AOL was eventually spun off from Time Warner in 2009, with Tim Armstrong appointed the new CEO. Under his leadership, the company invested in media brands and advertising technologies.
On June 23, 2015, AOL was acquired by Verizon Communications for $4.4billion.[5][6] On May 3, 2021, Verizon announced it would sell Yahoo and AOL to private equity firm Apollo Global Management for $5 billion.[7] On September 1, 2021, AOL became part of the new Yahoo! Inc.
History
1983–1991: early years
AOL began in 1983, as a short-lived venture called Control Video Corporation (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 Bros.[8] 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 $1 per game.[9] The telephone disconnected and the downloaded game would remain in GameLine's Master Module, playable until the user turned off the console or downloaded another game.
In January 1983, Steve Case was hired as a marketing consultant for Control Video on the recommendation of his brother, investment banker Dan Case. In May 1983, Jim Kimsey became a manufacturing consultant for Control Video, which was near bankruptcy. Kimsey was brought in by his West Point friend Frank Caufield, an investor in the company.[8] In early 1985, von Meister left the company.[10]
On May 24, 1985, Quantum Computer Services, an online services company, was founded by Kimsey from the remnants of Control Video, with Kimsey as chief executive officer and Marc Seriff as chief technology officer. The technical team consisted of Seriff, Tom Ralston, Ray Heinrich, Steve Trus, Ken Huntsman, Janet Hunter, Dave Brown, Craig Dykstra, Doug Coward, and Mike Ficco. In 1987, Case was promoted again to executive vice-president. Kimsey soon began to groom Case to take over the role of CEO, which he did when Kimsey retired in 1991.[10]
Kimsey changed the company's strategy, and in 1985, launched a dedicated online service for Commodore 64 and 128 computers, originally called Quantum Link ("Q-Link" for short).[9] The Quantum Link software was based on software licensed from PlayNet, Inc., which was founded in 1983 by Howard Goldberg and Dave Panzl. The service was different from other online services as it used the computing power of the Commodore 64 and the Apple II rather than just a "dumb" terminal. It passed tokens back and forth and provided a fixed-price service tailored for home users. In May 1988, Quantum and Apple launched AppleLink Personal Edition for Apple II[11] and Macintosh computers. In August 1988, Quantum launched PC Link, a service for IBM-compatible PCs developed in a joint venture with the Tandy Corporation. After the company parted ways with Apple in October 1989, Quantum changed the service's name to America Online.[12][13] Case promoted and sold AOL as the online service for people unfamiliar with computers, in contrast to CompuServe, which was well established in the technical community.[10]
From the beginning, AOL included online games in its mix of products; many classic and casual games were included in the original PlayNet software system. The company introduced many innovative online interactive titles and games, including:
First AOL logo as "America Online", used from 1991 to 2005
In February 1991, AOL for DOS was launched using a GeoWorks interface; it was followed a year later by AOL for Windows.[9] This coincided with growth in pay-based online services, like Prodigy, CompuServe, and GEnie. 1991 also saw the introduction of an original Dungeons & Dragons title called Neverwinter Nights from Stormfront Studios, one of the first Multiplayer Online Role Playing Games to depict the adventure with graphics instead of text.[14]
During the early 1990s, the average subscription lasted for about 25 months and accounted for $350 in total revenue. Advertisements invited modem owners to "Try America Online FREE", promising free software and trial membership.[15] AOL discontinued Q-Link and PC Link in late 1994. In September 1993, AOL added Usenet access to its features.[16] This is commonly referred to as the "Eternal September", as Usenet's cycle of new users was previously dominated by smaller numbers of college and university freshmen gaining access in September and taking a few weeks to acclimate. This also coincided with a new "carpet bombing" marketing campaign by CMO Jan Brandt to distribute as many free trial AOL trial disks as possible through nonconventional distribution partners. At one point, 50% of the CDs produced worldwide had an AOL logo.[17] AOL quickly surpassed GEnie, and by the mid-1990s, it passed Prodigy (which for several years allowed AOL advertising) and CompuServe.[10] In November 1994, AOL purchased Booklink for its web browser, to give its users web access.[18] In 1996, AOL replaced Booklink with a browser based on Internet Explorer, reportedly in exchange for inclusion of AOL in Windows.[19]
AOL purchased search engine WebCrawler in 1995, but sold it to Excite the following year; the deal made Excite the sole search and directory service on AOL.[21] After the deal closed in March 1997, AOL launched its own branded search engine, based on Excite, called NetFind. This was renamed to AOL Search in 1999.[22]
America Online 2.0 software for Microsoft Windows (1994)
AOL charged its users an hourly fee until December 1996,[23] when the company changed to a flat monthly rate of $19.95.[9] During this time, AOL connections were flooded with users trying to connect, and many canceled their accounts due to constant busy signals. A commercial was made featuring Steve Case telling people AOL was working day and night to fix the problem. Within three years, AOL's user base grew to 10million people. In 1995, AOL was headquartered at 8619 Westwood Center Drive in the Tysons Corner CDP in unincorporatedFairfax County, Virginia,[24][25] near the Town of Vienna.[26]
AOL was quickly running out of room in October 1996 for its network at the Fairfax County campus. In mid-1996, AOL moved to 22000 AOL Way in Dulles, unincorporated Loudoun County, Virginia to provide room for future growth.[27] In a five-year landmark agreement with the most popular operating system, AOL was bundled with Windows software.[28]
On March 31, 1996, the short-lived eWorld was purchased by AOL. In 1997, about half of all US homes with Internet access had it through AOL.[29] During this time, AOL's content channels, under Jason Seiken, including News, Sports, and Entertainment, experienced their greatest growth as AOL become the dominant online service internationally with more than 34million subscribers.
In February 1998, AOL acquired Compuserve Interactive Services (CIS) via WorldCom (later Verizon), which kept Compuware's networking business.[30]
In November 1998, AOL announced it would acquire Netscape, best known for their web browser, in a major $4.2billion deal.[9] The deal closed on March 17, 1999. Another large acquisition in December 1999 was that of MapQuest, for $1.1billion.[31]
In January 2000, as new broadband technologies were being rolled out around the New York City metropolitan area and elsewhere across the US, AOL and Time Warner Entertainment announced plans to merge, forming AOL Time Warner, Inc. The terms of the deal called for AOL shareholders to own 55% of the new, combined company. The deal closed on January 11, 2001. The new company was led by executives from AOL, SBI, and Time Warner. Gerald Levin, who had served as CEO of Time Warner, was CEO of the new company. Steve Case served as chairman, J. Michael Kelly (from AOL) was the chief financial officer, Robert W. Pittman (from AOL) and Dick Parsons (from Time Warner) served as co-chief operating officers.[32] In 2002, Jonathan Miller became CEO of AOL.[33] The following year, AOL Time Warner dropped the "AOL" from its name. It was the largest merger in history when completed with the combined value of the companies at $360billion. This value fell sharply, to as low as $120billion, as markets repriced AOL's valuation as a pure internet firm more modestly when combined with the traditional media and cable business. This status did not last long, and the company's value rose again within three months. By the end of that year, the tide had turned against "pure" internet companies, with many collapsing under falling stock prices, and even the strongest companies in the field losing up to 75% of their market value. The decline continued though 2001, but even with the losses, AOL was among the internet giants that continued to outperform brick and mortar companies.[34]
In 2004, along with the launch of AOL 9.0 Optimized, AOL also made available the option of personalized greetings which would enable the user to hear his or her name while accessing basic functions and mail alerts, or while logging in or out. 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.[35] In late 2005, AOL released AOL Safety & Security Center, a bundle of McAfee Antivirus, CA anti-spyware, and proprietary firewall and phishing protection software.[36] News reports in late 2005 identified companies such as Yahoo!, Microsoft, and Google as candidates for turning AOL into a joint venture.[37] Those plans were abandoned when it was revealed on December 20, 2005, that Google would purchase a 5% share of AOL for $1billion.[38]
2006–2009: rebranding and decline
Former AOL logo, used from 2005 to 2009
On April 3, 2006, AOL announced that it would retire the full name America Online. The official name of the service became AOL, and the full name of the Time Warner subdivision became AOL LLC.[39] On June 8, 2006,[40] AOL offered a new program called AOL Active Security Monitor, a diagnostic tool to monitor and rate PC security status, and recommended additional security software from AOL or Download.com. Two months later,[41] AOL released AOL Active Virus Shield, a free product developed by Kaspersky Lab, that did not require an AOL account, only an internet email address. The ISP side of AOL UK was bought by Carphone Warehouse in October 2006 to take advantage of its 100,000 LLU customers, making Carphone Warehouse the largest LLU provider in the UK.[42]
Decline in AOL US subscribers Q2 2001 – Q2 2009, with a significant drop from Q2 2006 onward
In August 2006, AOL announced that it would offer email accounts and software previously available only to its paying customers, provided that users accessed AOL or AOL.com through an access method not owned by AOL (otherwise known as "third party transit", "bring your own access" or "BYOA"). The move was designed to reduce costs associated with the "walled garden" business model by reducing usage of AOL-owned access points and shifting members with high-speed internet access from client-based usage to the more lucrative advertising provider AOL.com.[43] The change from paid to free access was also designed to slow the rate at which members canceled their accounts and defected to MicrosoftHotmail, Yahoo! or other free email providers. The other free services included:[44]
AOL Video,[45] which featured professional content and allowed users to upload videos.
AOL Local, comprising its CityGuide,[46]Yellow Pages[47] and Local Search[48] services to help users find local information like restaurants, local events, and directory listings.
AOL News
AOL My eAddress, a custom domain name for email addresses. These email accounts could be accessed in a manner similar to those of other AOL and AIM email accounts.
Xdrive, which allowed users to back up files over the Internet.[49] It was acquired by AOL on August 4, 2005,[50] and closed on December 31, 2008.[51] It offered a free 5 GB account (free online file storage) to anyone with an AOL screenname.[49] Xdrive also provided remote backup services and 50GB of storage for $9.95 per month.[49]
Also in August, AOL informed its US customers of an increase in the price of its dial-up access to $25.90. The increase was part of an effort to migrate the service's remaining dial-up users to broadband, as the increased price was the same as that of its monthly DSL access.[52] However, AOL subsequently began offering unlimited dial-up access for $9.95 a month.[53]
On November 16, 2006, Randy Falco succeeded Jonathan Miller as CEO.[54] In December 2006, AOL closed its last remaining call center in the United States, "taking the America out of America Online," according to industry pundits. Service centers based in India and the Philippines continue to provide customer support and technical assistance to subscribers.[55]
On September 17, 2007, AOL announced the relocation of one of its corporate headquarters from Dulles, Virginia to New York City[56] and the combination of its advertising units into a new subsidiary called Platform A. This action followed several advertising acquisitions, most notably Advertising.com, and highlighted the company's new focus on advertising-driven business models. AOL management stressed that "significant operations" would remain in Dulles, which included the company's access services and modem banks.
In October 2007, AOL announced the relocation of its other headquarters from Loudoun County, Virginia to New York City, while continuing to operate its Virginia offices.[57] As part of the move to New York and the restructuring of responsibilities at the Dulles headquarters complex after the Reston move, Falco announced on October 15, 2007, plans to lay off 2,000 employees worldwide by the end of 2007, beginning "immediately."[58] The result was a layoff of approximately 40% of AOL's employees. Most compensation packages associated with the October 2007 layoffs included a minimum of 120 days of severance pay, 60 of which were offered in lieu of the 60-day advance notice requirement by provisions of the 1988 federal WARN Act.[58]
By November 2007, AOL's customer base had been reduced to 10.1million subscribers,[59] slightly more than the number of subscribers of Comcast and AT&T Yahoo!. According to Falco, as of December 2007, the conversion rate of accounts from paid access to free access was more than 80%.[60]
On January 3, 2008, AOL announced the closing of its Reston, Virginia data center, which was sold to CRG West.[61] On February 6, Time Warner CEO Jeff Bewkes announced that Time Warner would divide AOL's internet-access and advertising businesses, with the possibility of later selling the internet-access division.[62]
On March 13, 2008, AOL purchased the social networking site Bebo for $850 million (£417 million).[63] On July 25, AOL announced that it was shuttering Xdrive, AOL Pictures and BlueString to save on costs and focus on its core advertising business.[64] AOL Pictures was closed on December 31. On October 31, AOL Hometown (a web-hosting service for the websites of AOL customers) and the AOL Journal blog hosting service were eliminated.[65]
2009–2015: As a digital media company
The AOL 'eraser' logo, in use since 2009
On March 12, 2009, Tim Armstrong, formerly with Google, was named chairman and CEO of AOL.[66] On May 28, Time Warner announced that it would position AOL as an independent company after Google's shares ceased at the end of the fiscal year.[67] On November 23, AOL unveiled a new brand identity with the wordmark "Aol." superimposed onto canvases created by commissioned artists. The new identity, designed by Wolff Olins,[68] was integrated with all of AOL's services on December 10, the date upon which AOL traded independently for the first time since the Time Warner merger on the New York Stock Exchange under the symbol AOL.[69]
On April 6, 2010, AOL announced plans to shutter or sell Bebo.[70] On June 16, the property was sold to Criterion Capital Partners for an undisclosed amount, believed to be approximately $10million.[71] In December, AIM eliminated access to AOL chat rooms, noting a marked decline in usage in recent months.[72]
Under Armstrong's leadership, AOL followed a new business direction marked by a series of acquisitions. It announced the acquisition of Patch Media, a network of community-specific news and information sites focused on towns and communities.[73] On September 28, 2010, at the San Francisco TechCrunch Disrupt Conference, AOL signed an agreement to acquire TechCrunch.[74][75] On December 12, 2010, AOL acquired about.me, a personal profile and identity platform, four days after the platform's public launch.[76]
On January 31, 2011, AOL announced the acquisition of European video distribution network goviral.[77] In March 2011, AOL acquired HuffPost for $315million.[78][79] Shortly after the acquisition was announced, Huffington Post co-founder Arianna Huffington replaced AOL content chief David Eun, assuming the role of president and editor-in-chief of the AOL Huffington Post Media Group.[80] On March 10, AOL announced that it would cut approximately 900 workers following the HuffPost acquisition.[81]
On September 14, 2011, AOL formed a strategic ad-selling partnership with two of its largest competitors, Yahoo and Microsoft. The three companies would begin selling inventory on each other's sites. The strategy was designed to help the companies compete with Google and advertising networks.[82]
On March 15, 2012, AOL announced the acquisition of Hipster, a mobile photo-sharing app, for an undisclosed amount.[86] On April 9, 2012, AOL announced a deal to sell 800 patents to Microsoft for $1.056billion. The deal included a perpetual license for AOL to use the patents.[87]
In April, AOL took several steps to expand its ability to generate revenue through online video advertising. The company announced that it would offer gross rating point (GRP) guarantee for online video, mirroring the television-ratings system and guaranteeing audience delivery for online-video advertising campaigns bought across its properties.[88] This announcement came just days before the Digital Content NewFront (DCNF) a two-week event held by AOL, Google, Hulu, Microsoft, Vevo and Yahoo to showcase the participating sites' digital video offerings. The DCNF was conducted in advance of the traditional television upfronts in the hope of diverting more advertising money into the digital space.[89] On April 24, the company launched the AOL On network, a single website for its video output.[90]
In February 2013, AOL reported its fourth quarter revenue of $599.5million, its first growth in quarterly revenue in eight years.[91]
In August 2013, Armstrong announced that Patch Media would scale back or sell hundreds of its local news sites.[92] Not long afterward, layoffs began, with up to 500 out of 1,100 positions initially impacted.[93] On January 15, 2014, Patch Media was spun off, and majority ownership was held by Hale Global.[94] By the end of 2014, AOL controlled 0.74% of the global advertising market, well behind industry leader Google's 31.4%.[95]
On January 23, 2014, AOL acquired Gravity, a software startup that tracked users' online behavior and tailored ads and content based on their interests, for $83million.[96] The deal, which included approximately 40 Gravity employees and the company's personalization technology, was Armstrong's fourth-largest deal since taking command in 2009. Later that year, AOL acquired Vidible, a company that developed technology to help websites run video content from other publishers, and help video publishers sell their content to these websites. The deal, which was announced December 1, 2014, was reportedly worth roughly $50million.[97]
On July 16, 2014, AOL earned an Emmy nomination for the AOL original series The Future Starts Here in the News and Documentary category.[98] This came days after AOL earned its first Primetime Emmy Award nomination and win for Park Bench with Steve Buscemi in the Outstanding Short Form Variety Series.[99] Created and hosted by Tiffany Shlain, the series focused on humans' relationship with technology and featured episodes such as "The Future of Our Species," "Why We Love Robots" and "A Case for Optimism."
2015–2021: division of Verizon
AOL's Silicon Valley branch office
On May 12, 2015, Verizon announced plans to buy AOL for $50 per share in a deal valued at $4.4billion. The transaction was completed on June 23. Armstrong, who continued to lead the firm following regulatory approval, called the deal the logical next step for AOL. "If you look forward five years, you're going to be in a space where there are going to be massive, global-scale networks, and there's no better partner for us to go forward with than Verizon." he said. "It's really not about selling the company today. It's about setting up for the next five to 10 years."[5]
Analyst David Bank said he thought the deal made sense for Verizon.[5] The deal will broaden Verizon's advertising sales platforms and increase its video production ability through websites such as HuffPost, TechCrunch, and Engadget.[95] However, Craig Moffett said it was unlikely the deal would make a big difference to Verizon's bottom line.[5] AOL had about two million dial-up subscribers at the time of the buyout.[95] The announcement caused AOL's stock price to rise 17%, while Verizon's stock price dropped slightly.[5]
Shortly before the Verizon purchase, on April 14, 2015, AOL launched ONE by AOL, a digital marketing programmatic platform that unifies buying channels and audience management platforms to track and optimize campaigns over multiple screens.[100] Later that year, on September 15, AOL expanded the product with ONE by AOL: Creative, which is geared towards creative and media agencies to similarly connect marketing and ad distribution efforts.[101]
On May 8, 2015, AOL reported its first-quarter revenue of $625.1million, $483.5million of which came from advertising and related operations, marking a 7% increase from Q1 2014. Over that year, the AOL Platforms division saw a 21% increase in revenue, but a drop in adjusted OIBDA due to increased investments in the company's video and programmatic platforms.[102]
On June 29, 2015, AOL announced a deal with Microsoft to take over the majority of its digital advertising business. Under the pact, as many as 1,200 Microsoft employees involved with the business will be transferred to AOL, and the company will take over the sale of display, video, and mobile ads on various Microsoft platforms in nine countries, including Brazil, Canada, the United States, and the United Kingdom. Additionally, Google Search will be replaced on AOL properties with Bing—which will display advertising sold by Microsoft. Both advertising deals are subject to affiliate marketingrevenue sharing.[103][104]
On July 22, 2015, AOL received two News and Documentary Emmy nominations, one for MAKERS in the Outstanding Historical Programming category, and the other for True Trans With Laura Jane Grace, which documented the story of Laura Jane Grace, a transgender musician best known as the founder, lead singer, songwriter and guitarist of the punk rock band Against Me!, and her decision to come out publicly and overall transition experience.[105]
On September 3, 2015, AOL agreed to buy Millennial Media for $238million.[106] On October 23, 2015, AOL completed the acquisition.[107]
On October 1, 2015, Go90, a free ad-supported mobile video service aimed at young adult and teen viewers that Verizon owns and AOL oversees and operates, launched its content publicly after months of beta testing.[108][109] The initial launch line-up included content from Comedy Central, HuffPost, Nerdist News, Univision News, Vice, ESPN and MTV.[108]
On April 20, 2016, AOL acquired virtual reality studio RYOT to bring immersive 360 degree video and VR content to HuffPost's global audience across desktop, mobile, and apps.[110]
In July 2016, Verizon Communications announced its intent to purchase the core internet business of Yahoo!. Verizon merged AOL with Yahoo into a new company called "Oath Inc.", which in January 2019 rebranded itself as Verizon Media.[111]
AOL's content contributors consists of over 20,000 bloggers, including politicians, celebrities, academics, and policy experts, who contribute on a wide range of topics making news.[121]
In addition to mobile-optimized web experiences, AOL produces mobile applications for existing AOL properties like Autoblog, Engadget, The Huffington Post, TechCrunch, and products such as Alto, Pip, and Vivv.
Advertising
AOL has a global portfolio of media brands and advertising services across mobile, desktop, and TV. Services include brand integration and sponsorships through its in-house branded content arm, Partner Studio by AOL, as well as data and programmatic offerings through ad technology stack, ONE by AOL.
AOL acquired a number of businesses and technologies help to form ONE by AOL. These acquisitions included AdapTV in 2013 and Convertro, Precision Demand, and Vidible in 2014.[122] ONE by AOL is further broken down into ONE by AOL for Publishers (formerly Vidible, AOL On Network and Be On for Publishers) and ONE by AOL for Advertisers, each of which have several sub-platforms.[123][124]
On September 10, 2018, AOL's parent company Oath consolidated BrightRoll, One by AOL and Yahoo Gemini to 'simplify' adtech service by launching a single advertising proposition dubbed Oath Ad Platforms, now Yahoo! Ad Tech.[125]
Membership
AOL offers a range of integrated products and properties including communication tools, mobile apps and services and subscription packages.
In 2017, before the discontinuation of AIM, "billions of messages" were sent "daily" on it and AOL's other chat services.[1]
Dial-up Internet access – While 2.1million people still used AOL's dial-up service as recently as 2015,[126] only a few thousand were still subscribed as of 2021.[127]
AOL Mail – AOL Mail is AOL's proprietary email client. It is fully integrated with AIM and links to news headlines on AOL content sites.
AOL Instant Messenger (AIM) – was AOL's proprietary instant-messaging tool. It was released in 1997. It lost market share to competition in the instant messenger market such as Google Chat, Facebook Messenger, and Skype.[128] It also included a video-chat service, AV by AIM. On December 15, 2017, AOL discontinued AIM.[129]
AOL Plans – AOL Plans offers three online safety and assistance tools: ID protection, data security and a general online technical assistance service.[130]
AOL Desktop version 10.X was different from previous AOL browsers and AOL Desktop versions. Its features are focused on web browsing as well as email. For instance, one does not have to sign into AOL in order to use it as a regular browser. In addition, non-AOL email accounts can be accessed through it. Primary buttons include "MAIL", "IM", and several shortcuts to various web pages. The first two require users to sign in, but the shortcuts to web pages can be used without authentication. AOL Desktop version 10.X was later marked as unsupported in favor of supporting the AOL Desktop 9.X versions.
Version 9.8 was released, replacing the Internet Explorer components of the internet browser with CEF[138] (Chromium Embedded Framework) to give users an improved web browsing experience closer to that of Chrome.
Version 11 of AOL Desktop was a total rewrite but maintained a similar user interface to the previous 9.8.X series of releases.[133]
In 2017, a new paid version called AOL Desktop Gold was released, available for $4.99 per month after trial. It replaced the previous free version.[139] After the shutdown of AIM in 2017, AOL's original chat rooms continued to be accessible through AOL Desktop Gold, and some rooms remained active during peak hours. That chat system was shut down on December 15, 2020.[140]
In addition to AOL Desktop, the company also offered a browser toolbarMozilla plug-in, AOL Toolbar, for several web browsers that provided quick access to AOL services. The toolbar was available from 2007 until 2018.
Criticism
AOL CDs sent to a student dormitory in Germany, 2002
In its earlier incarnation as a "walled garden" community and service provider, AOL received criticism for its community policies, terms of service, and customer service. Prior to 2006, AOL was known for its direct mailing of CD-ROMs and 3.5-inch floppy disks containing its software. The disks were distributed in large numbers; at one point, half of the CDs manufactured worldwide had AOL logos on them.[141] The marketing tactic was criticized for its environmental cost, and AOL CDs were recognized as PC World's most annoying tech product.[142][143]
Community leaders
AOL used a system of volunteers to moderate its chat rooms, forums and user communities. The program dated back to AOL's early days, when it charged by the hour for access and one of its highest billing services was chat. AOL provided free access to community leaders in exchange for moderating the chat rooms, and this effectively made chat very cheap to operate, and more lucrative than AOL's other services of the era. There were 33,000 community leaders in 1996.[144] All community leaders received hours of training and underwent a probationary period. While most community leaders moderated chat rooms, some ran AOL communities and controlled their layout and design, with as much as 90% of AOL's content being created or overseen by community managers until 1996.[145]
By 1996, ISPs were beginning to charge flat rates for unlimited access, which they could do at a profit because they only provided internet access. Even though AOL would lose money with such a pricing scheme, it was forced by market conditions to offer unlimited access in October 1996. In order to return to profitability, AOL rapidly shifted its focus from content creation to advertising, resulting in less of a need to carefully moderate every forum and chat room to keep users willing to pay by the minute to remain connected.[146]
After unlimited access, AOL considered scrapping the program entirely, but continued it with a reduced number of community leaders, with scaled-back roles in creating content.[145] Although community leaders continued to receive free access, after 1996 they were motivated more by the prestige of the position and the access to moderator tools and restricted areas within AOL.[144][145] By 1999, there were over 15,000 volunteers in the program.[147]
In May 1999, two former volunteers filed a class-action lawsuit alleging AOL violated the Fair Labor Standards Act by treating volunteers like employees. Volunteers had to apply for the position, commit to working for at least three to four hours a week, fill out timecards and sign a non-disclosure agreement.[148] On July 22, AOL ended its youth corps, which consisted of 350 underage community leaders.[144] At this time, the United States Department of Labor began an investigation into the program, but it came to no conclusions about AOL's practices.[148]
AOL ended its community leader program on June 8, 2005. The class action lawsuit dragged on for years, even after AOL ended the program and AOL declined as a major internet company. In 2010, AOL finally agreed to settle the lawsuit for $15million.[149] The community leader program was described as an example of co-production in a 2009 article in International Journal of Cultural Studies.[145]
Billing disputes
AOL has faced a number of lawsuits over claims that it has been slow to stop billing customers after their accounts have been canceled, 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 15 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 12 minutes and 46 seconds would be charged for 14 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 plaintiffs 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.
AOL was sued by the Ohio Attorney General in October 2003 for improper billing practices. The case was settled on June 8, 2005. AOL agreed to resolve any consumer complaints filed with the Ohio AG's office. In December 2006, AOL agreed to provide restitution to Florida consumers to settle the case filed against them by the Florida Attorney General.[150]
Account cancellation
Many customers complained that AOL personnel ignored their demands to cancel service and stop billing. In response to approximately 300 consumer complaints, the New York Attorney General's office began an inquiry of AOL's customer service policies.[citation needed] The investigation revealed that the company had an elaborate scheme 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 scheme, customer 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.[citation needed] 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.
On August 24, 2005, America Online agreed to pay $1.25million to the state of New York and reformed its customer service procedures. Under the agreement, AOL would no longer require its customer service representatives to meet a minimum quota for customer retention in order to receive a bonus.[150] However the agreement only covered people in the state of New York.[151]
On June 13, 2006, Vincent Ferrari documented his account cancellation phone call in a blog post,[152] stating he had switched to broadband years earlier. In the recorded phone call, the AOL representative refused to cancel the account unless the 30-year-old Ferrari explained why AOL hours were still being recorded on it. Ferrari insisted that AOL software was not even installed on the computer. When Ferrari demanded that the account be canceled regardless, the AOL representative asked to speak with Ferrari's father, for whom the account had been set up. The conversation was aired on CNBC. When CNBC reporters tried to have an account on AOL cancelled, they were hung up on immediately and it ultimately took more than 45 minutes to cancel the account.[153]
On July 19, 2006, AOL's entire retention manual was released on the Internet.[154] On August 3, 2006, Time Warner announced that the company would be dissolving AOL's retention centers due to its profits hinging on $1billion in cost cuts. The company estimated that it would lose more than six million subscribers over the following year.[155]
Direct marketing of disks
Some promotional CD-ROMs distributed in CanadaCD in original mailer
Prior to 2006, AOL often sent unsolicited mass direct mail of 31⁄2" floppy disks and CD-ROMs containing their software. They were the most frequent user of this marketing tactic, and received criticism for the environmental cost of the campaign.[156] According to PC World, in the 1990s "you couldn't open a magazine (PC World included) or your mailbox without an AOL disk falling out of it".[151]
The mass distribution of these disks was seen as wasteful by the public and led to protest groups. One such was No More AOL CDs, a web-based effort by two IT workers[157] to collect one million disks with the intent to return the disks to AOL.[158] The website was started in August 2001, and an estimated 410,176 CDs were collected by August 2007 when the project was shut down.[158]
Software
In 2000, AOL was served with an $8billion lawsuit alleging that its 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 $15million, without admission of wrongdoing.[159] The AOL software then was given a feature called AOL Dialer, or AOL Connect on Mac OS X. This feature allowed users to connect to the ISP without running the full interface. This allowed users to use only the applications they wish to use, especially if they do not favor the AOL Browser.
AOL 9.0 was once identified by Stopbadware as being under investigation[160] for installing additional software without disclosure, and modifying browser preferences, toolbars, and icons. However, as of the release of AOL 9.0 VR (Vista Ready) on January 26, 2007, it was no longer considered badware due to changes AOL made in the software.[161]
Usenet newsgroups
When AOL gave clients access to Usenet in 1993, 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". With AOL clients swarming Usenet newsgroups, the old, existing user base started to develop a strong distaste for both AOL and its clients, referring to the new state of affairs as Eternal September.[162]
AOL discontinued access to Usenet on June 25, 2005.[163] No official details were provided as to the cause of decommissioning Usenet access, except providing users the suggestion to access Usenet services from a third-party, Google Groups. AOL then provided community-based message boards in lieu of Usenet.
Terms of Service (TOS)
AOL has a detailed set of guidelines and expectations for users on their service, known as the Terms of Service (TOS, also known as Conditions of Service (COS) in the UK). It is separated into three different sections: Member Agreement, Community Guidelines and Privacy Policy.[164][165] All three agreements are presented to users at time of registration and digital acceptance is achieved when they access the AOL service. During the period when volunteer chat room hosts and board monitors were used, chat room hosts were given a brief online training session and test on Terms of Service violations.
There have been many complaints over rules that govern an AOL user's conduct. Some users disagree with the TOS, citing the guidelines are too strict to follow coupled with the fact the TOS may change without users being made aware. A considerable cause for this was likely due to alleged censorship of user-generated content during the earlier years of growth for AOL.[166][167][168][169]
Certified email
In early 2005, AOL stated its intention to implement a certified email system called Goodmail, 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 drew fire from MoveOn, which characterized the program as an "email tax", and the Electronic Frontier Foundation (EFF), which characterized it as a shakedown of non-profits.[170] A website called Dearaol.com[171] was launched, with an online petition and a blog that garnered hundreds of signatures from people and organizations expressing their opposition to AOL's use of Goodmail.
Esther Dyson defended the move in an editorial in The New York Times, saying "I hope Goodmail succeeds, and that it has lots of competition. I also think it and its competitors will eventually transform into services that more directly serve the interests of mail recipients. Instead of the fees going to Goodmail and AOL, they will also be shared with the individual recipients."[172]
Tim Lee of the Technology Liberation Front[173] posted an article that questioned the Electronic Frontier Foundation's adopting a confrontational posture when dealing with private companies. Lee's article cited a series of discussions[174] on Declan McCullagh's Politechbot mailing list on this subject between the EFF's Danny O'Brien and antispammer Suresh Ramasubramanian, who has also compared[175] the EFF's tactics in opposing Goodmail to tactics used by Republican political strategist Karl Rove. SpamAssassin developer Justin Mason posted some criticism of the EFF's and Moveon's "going overboard" in their opposition to the scheme.
The dearaol.com campaign lost momentum and disappeared, with the last post to the now defunct dearaol.com blog—"AOL starts the shakedown" being made on May 9, 2006.
Comcast, who also used the service, announced on its website that Goodmail had ceased operations and as of February 4, 2011, they no longer used the service.[176]
On August 4, 2006, AOL released a compressed text file on one of its websites containing 20million search keywords for over 650,000 users over a three-month period between March 1 and May 31, 2006, intended for research purposes. AOL pulled the file from public access by August 7, but not before its wide distribution on the Internet by others. Derivative research, titled A Picture of Search[177] was published by authors Pass, Chowdhury and Torgeson for The First International Conference on Scalable Information Systems.[178]
The data were used by websites such as AOLstalker[179] for entertainment purposes, where users of AOLstalker are encouraged to judge AOL clients based on the humorousness of personal details revealed by search behavior.
User list exposure
In 2003, Jason Smathers, an AOL employee, was convicted of stealing America Online's 92million screen names and selling them to a known spammer. Smathers pled guilty to conspiracy charges in 2005.[180][181] Smathers pled guilty to violations of the US CAN-SPAM Act of 2003.[182] He was sentenced in August 2005 to 15 months in prison; the sentencing judge also recommended Smathers be forced to pay $84,000 in restitution, triple the $28,000 that he sold the addresses for.[183]
AOL's Computer Checkup "scareware"
On February 27, 2012, a class action lawsuit was filed against Support.com, Inc. and partner AOL, Inc. The lawsuit alleged Support.com and AOL's Computer Checkup "scareware" (which uses software developed by Support.com) misrepresented that their software programs would identify and resolve a host of technical problems with computers, offered to perform a free "scan," which often found problems with users' computers. The companies then offered to sell software—for which AOL allegedly charged $4.99 a month and Support.com $29—to remedy those problems.[184] Both AOL, Inc. and Support.com, Inc. settled on May 30, 2013, for $8.5million. This included $25.00 to each valid class member and $100,000 each to Consumer Watchdog and the Electronic Frontier Foundation.[185] Judge Jacqueline Scott Corley wrote: "Distributing a portion of the [funds] to Consumer Watchdog will meet the interests of the silent class members because the organization will use the funds to help protect consumers across the nation from being subject to the types of fraudulent and misleading conduct that is alleged here," and "EFF's mission includes a strong consumer protection component, especially in regards to online protection."[184]
Following media reports about PRISM, NSA's massive electronic surveillance program, in June 2013, several technology companies were identified as participants, including AOL. According to leaks of said program, AOL joined the PRISM program in 2011.[187]
Hosting of user profiles changed, then discontinued
At one time, most AOL users had an online "profile" hosted by the AOL Hometown service. When AOL Hometown was discontinued, users had to create a new profile on Bebo. This was an unsuccessful attempt to create a social network that would compete with Facebook. When the value of Bebo decreased to a tiny fraction of the $850million AOL paid for it, users were forced to recreate their profiles yet again, on a new service called AOL Lifestream.
AOL decided to shut down Lifestream on February 24, 2017, and gave users one month's notice to save photos and videos that had been uploaded to Lifestream.[188] Following the shutdown, AOL no longer provides any option for hosting user profiles.
During the Hometown/Bebo/Lifestream era, another user's profile could be displayed by clicking the "Buddy Info" button in the AOL Desktop software. After the shutdown of Lifestream, this was no longer supported, but opened to the AIM home page (www.aim.com), which also became defunct, redirecting to AOL's home page.
AIM was an instant messaging and presence computer program created by AOL, which used the proprietary OSCAR instant messaging protocol and the TOC protocol to allow registered users to communicate in real time.
ICQ was a cross-platform instant messaging (IM) and VoIP client. The name ICQ derives from the English phrase "I Seek You". Originally developed by the Israeli company Mirabilis in 1996, the client was bought by AOL in 1998, and then by Mail.Ru Group in 2010.
Instant messaging (IM) technology is a type of synchronous computer-mediated communication involving the immediate (real-time) transmission of messages between two or more parties over the Internet or another computer network. Originally involving simple text message exchanges, modern IM applications and services tend to also feature the exchange of multimedia, emojis, file transfer, VoIP, and video chat capabilities.
CompuServe, Inc. was an American online service, the first major commercial one in the world. It opened in 1969 as a timesharing and remote access service marketed to corporations. After a successful 1979 venture selling otherwise under-utilized after-hours time to Radio Shack customers, the system was opened to the public, roughly the same time as The Source.
Yahoo! Messenger was an advertisement-supported instant messaging client and associated protocol provided by Yahoo!. Yahoo! Messenger was provided free of charge and could be downloaded and used with a generic "Yahoo ID" which also allowed access to other Yahoo! services, such as Yahoo! Mail. The service also offered VoIP, file transfers, webcam hosting, a text messaging service, and chat rooms in various categories.
Xfire was a proprietary freeware instant messaging service for gamers that also served as a game server browser with various other features. It was available for Microsoft Windows. Xfire was originally developed by Ultimate Arena based in Menlo Park, California.
AOL Mail is a free web-based email service provided by AOL, a division of Yahoo! Inc.
Weblogs, Inc. was a blog network that published content on a variety of subjects, including tech news, video games, automobiles, and pop culture. At one point, the network had as many as 90 blogs, although the vast majority of its traffic could be attributed to a smaller number of breakout titles, as was typical of most large-scale successful blog networks of the mid-2000s. Popular blogs included Engadget, Autoblog, TUAW, Joystiq, Luxist, Slashfood, Cinematical, TV Squad, Download Squad, Blogging Baby, Gadling, AdJab, and Blogging Stocks.
Meebo was an instant messaging and social networking service provider. It was founded in September 2005 by Sandy Jen, Seth Sternberg, and Elaine Wherry, and was based in Mountain View, California. Initially the company offered a web-based instant messenger service, extending its offer in more general online chat and even social networking directions. In June 2012, Google acquired Meebo to merge the company's staff with the Google+ developers team.
Paltalk is a proprietary video group chat service that enables users to communicate by video, Internet chat, or voice. It offers chat rooms and the ability for users to create their own public virtual chat room. Paltalk Desktop is available on macOS and Windows, and Paltalk Video Chat App is available for Android and iOS. While basic services are free of charge and basic software is free to download, fee-based memberships and paid upgrades to more capable versions are offered by AVM Software, the creators of Paltalk.
Microsoft Advertising is an online advertising platform developed by Microsoft, where advertisers bid to display brief ads, service offers, product listings and videos to web users. Provides pay per click advertising on search engines Bing, Yahoo! and DuckDuckGo, as well as on other websites, mobile apps, and videos.
TechCrunch is an American global online newspaper focusing on topics regarding high-tech and startup companies. It was founded in June 2005 by Archimedes Ventures, led by partners Michael Arrington and Keith Teare.
Barry Martin Schuler is an American Internet entrepreneur and former chairman and CEO of America Online Inc. He is best known for leading the AOL team that simplified the online service provider's user interface, making it possible for millions of consumers to gain easy access to the Internet.
The online service imeem was a social media website where users interacted with each other by streaming, uploading and sharing music and music videos. It operated from 2003 until 2009 when it was shut down after being acquired by MySpace.
Bebo was an American social networking website that originally operated from 2005 until its bankruptcy in 2013 and relaunched in February 2021. The site relaunched several times after its bankruptcy with a number of short-lived offerings, including instant messaging and video streaming, until its acquisition by Amazon in July 2019 when it was shut down. It was announced in January 2021 that it would be returning as a new social-media site the month after. By May 2022, it had once again been shut down, without having ever left beta-testing.
Dropbox is a file hosting service operated by the American company Dropbox, Inc., headquartered in San Francisco, California, U.S. that offers cloud storage, file synchronization, personal cloud, and client software. Dropbox was founded in 2007 by MIT students Drew Houston and Arash Ferdowsi as a startup company, with initial funding from seed accelerator Y Combinator.
Nimbuzz is a proprietary cross-platform instant messaging and social media and mobile payment developed by Kuraakani Online Private Limited, with the origins of its technology dating back to the early 2000s. As of March 2013, Nimbuzz had 150 million users in 200 countries. By April 2014, Nimbuzz was growing by more than 210,000 new registrations per day. In October 2014, now with over 200 million users, New Call acquired 70% of Nimbuzz, valuing the app at $250 million. Under CEO Sujit Acharya's leadership, Nimbuzz suite of applications enables users to enjoy end-to-end encrypted free calls, instant messaging, games, file sharing, social networking, mobile payments & movies on their mobile device. Nimbuzz has more than 3 million lines of code. Initially, Nimbuzz offered discounted calling rates to most countries in the world. The platform processed more than a billion call minutes and in excess of 100 billion messages a month.
MSN Dial-up is an Internet service provider operated by Microsoft in the United States and formerly also in several other countries. Originally named The Microsoft Network, it debuted as a proprietary online service on August 24, 1995, to coincide with the release of Windows 95. In 1996 and 1997, a revised web-based version of the ISP was an early experiment at interactive multimedia content on the Internet.
↑ Weyhrich, Steven (December 31, 2002). "Telecommunications". Apple II History. Archived from the original on August 28, 2005. Retrieved September 24, 2005.
1 2 3 Pogue, David (January 6, 2007). "Fewer excuses for not doing a PC backup". The New York Times. Retrieved January 6, 2007. Quote: "Online backups, where files are shuttled off to the Internet for safekeeping, are suddenly becoming effortless, capacious and even free."
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