Maroon Weekly

How the gradual decline of the nation’s most well-known ISP marks the end of an era

By Ryan Stone

In 2002, America Online had over 25 million subscribers. Today, that number clocks in at closer to 5 million. In that same time period, AOL’s stock value dropped about $180 billion. So, it’s no surprise that America Online recently announced that it is buying out and laying off one-third of its jobs, cutting its workforce to about 4,500 very scared employees. And they should be scared. The writing isn’t just on the wall for America Online; it’s basically chiseled into the frame.

It would be in bad taste to call America Online a scam, a halfhearted endeavor built on bad software, dubious interface, epic slowness, and mafia-inspired customer retention policies. So, we won’t go there. What we will remember is that there was a time when it was on top, when other providers like Prodigy and Compuserve were household names, and kudos to anyone that remembers GEnie, General Electric’s online service which once cost anywhere from $5 to $18 an hour, depending on what time it was accessed. To put that in perspective, playing Gemstone II on GEnie for two hours on a Friday night in 1988 would have cost you the same as a month of high-speed broadband service does today.

And, that’s no surprise. The internet wasn’t a glimmer of what it is in 2009. It wasn’t necessary, and it really wasn’t necessary for people to use it for hours at a time. Sure, there were games like Dragon’s Gate (the text-based ancestor of today’s massively multiplayer titles like World of Warcraft), but they took so much money to play that they garnered only the most narrow, dedicated fan bases. The once infamous Steve Case, former CEO of America Online, helped to change all that by gearing his product toward the everyday user, making it less technical while also eliminating hourly fees in favor of a monthly $19.99 price tag. What resulted was a boom that left all the other internet providers in the dust.

Then, in 2000, AOL merged with Time Warner in a bold, visionary effort, but their timing couldn’t have been any worse. Estimates say that about $5 trillion worth of technology wealth disappeared over the course of the next two years when the dot-com bubble burst. At the same time, Cable, DSL, and other dedicated internet connections were becoming widely available, eliminating the need for America Online’s now snail-paced dial-up services. Then cell phone providers began offering mobile versions of the internet at the same time laptops began coming with wireless networking cards as a standard setup feature.

So, here we are. Reports say that AOL and Time Warner will split up sometime this December. The buyouts and layoffs will move forward, just like they have in so many other companies over the past year. The company will go through a costly restructuring, but, barring some genius idea or irresistible innovation, it’s safe to say that AOL is finished. As companies like HughesNet continue to scour the countryside for remote, inaccessible users and, as providers like Verizon, AT&T, and Sprint continue to throw high speed service out of thin air to anyone within range of a cell phone tower, AOL will mostly likely disappear to join its old friends Compuserve, GEnie, and Prodigy in the annals in internet history.