Must Read Summaries - AOL.com - Kara Swisher

What have been the keys to AOLs success?

1. AOL has managed to survive the ups and downs of the business world because it is middle of the road rather than cutting edge. AOL sites will never win any design awards, but they are clean and easy to navigate. Its chat groups focus on mundane things that actually match the lives of most people.
2. AOL has won because Steve Case has a vision for the business, and keeps it tracking towards that goal.
3. AOL has, at times, taken bet the company risks at critical times. Some investors would consider AOLs aggressive accounting and marketing policies as unnecessarily risky. Yet those same people are pleased when those bets come off and the share price rises correspondingly.
4. AOL has done whatever was required to survive. When the online games company concept didnt pan out, it went into private-label online services for computer manufacturers. It offered a proprietary service when the open infrastructure offered by the Internet was growing quickly. It moved to a flat rate pricing scheme and then totally frustrated its members with technical snafus. It has lived up to its reputation as the cockroach of the online world. And AOL will doubtless continue to evolve and change in the future.
5. AOLs success was helped at various times as much by the incompetence of their competitors than by anything brilliant AOL did.

So where does AOL go from here? Most people assume one of three potential scenarios will play out:

1. AOL will go bankrupt and just fade away.
2. AOL will be bought out by a larger company, probably a media company wanting to get into online commerce.
3. AOL will emerge as the most important company in cyberspace.

While it is impossible to forecast which of these scenarios will eventually be played out, identifying the challenges currently faced by AOL are much easier:

1. Microsoft has regrouped and re-launched its Microsoft Network to compete against AOL for online consumers.
2. Microsoft and other companies are making sizable investments in the merger of PCs and televisions to provide a broad range on interactive services. How AOL will meet such a challenge if it does eventuate is uncertain.
3. The increasing popularity of the popular Internet portal sites such as Yahoo!, Excite, Start, Snap and @home are busily adding features that will compete against AOL.
4. The Web is emerging as a more varied and vibrant online destination than AOL.
5. Internet service providers may be well positioned to challenge AOL at some future time.
6. Unsolicited commercial e-mail or spam (which by some estimates accounts for up to one-third of all current e-mail) may cause problems in the future.
7. Hackers love the challenge of breaking into AOLs system and stealing passwords, altering graphics and intruding into unauthorized areas.
8. The AOL network continues to strain under the number of users, and busy signals frequently greet members as they try to log on to AOL.
9. Federal regulations increasing AOLs fiscal liability for transmitting questionable material through its system may yet be enacted and enforced.
10. The issue of online privacy is attracting considerable attention, and will need to be addressed in the future.

In the meantime, however, AOL is flourishing. In 1997:

• 2.9 million new members joined AOL
• AOLs brand awareness was more than 4-times that of its nearest competitors
• Commerce and advertising revenue streams have continued to rise
• AOLs management team is now widely considered to be the best in the industry
• AOLs share price moved closer to the $100 mark (and actually reached $120 in March 1998)

In February 1998, AOL even increased its flat rate charge from $19.95 a month to $21.95 per month.

For the second quarter of 1998, AOL passed the 11 million member mark and announced revenues of $592 million, with a profit of $20.8 million.

Case does not want to celebrate now, because theres still many more innings to play -- were perhaps at the bottom of the second or the third he says. This is a marathon, not a sprint, he noted. It takes 10 to 20 years to build a mass market, he insisted it doesnt just happen overnight.

--Kara Swisher

When people ask me how or why I did it, its like asking a basketball player, "Why do you play basketball?" Probably because you want to be the best. So I never did mind the focus on my imminent demise, because the facts are on my side. And the fact is that the dust settled and I am still standing, and that pretty much says it all. I learn a lot from history, because no one thought much of AOL and here we are. So I exaggerate the risks and diminish our advantages.

--Steve Case

And for the future? Well see, wont we.

--Steve Case