AOL Time Warner to drop AOL

• Sep. 17, 2003

We knew this day was coming for some time. There were rumblings a few months ago that AOL Time Warner was debating on whether or not to remove AOL from the company logo. It looks like the board of directors for the company will make that decision tomorrow.

You might not think that this is a big deal. But consider that it was AOL who bought Time Warner to form the world's largest media company. Now it appears that the child wants to cut the parent loose. It would be similar to Yahoo! changing it's name to Yahooverture and then dropping the Yahoo! part, becoming just Overture.

So what happens to AOL? Does it fade into obscurity? I think not. AOL still has an incredibly large customer base that faithfully pays their monthly access fee. And AOL has been trying many things to increase its customer base, such as offering exclusive content.

No I think if Time Warner does put AOL on the auction block that it may be a good investment for Yahoo! or MSN. These two companies are already in the portal business so it wouldn't be much of a stretch to incorporate AOL into the fold. After all, we've already seen some big acquisitions by Yahoo! Consider the additional customer base they would gain by such an acquisition? They would in essence become the largest consumer portal in the world if this type of merger were to happen.

I don't think you'd see other heavyweights like Google jump into the portal business by buying AOL. AOL doesn't conform to their ideology which is to provide the best search experience. While it's true that Google does have their own customers, such as those who use the engine on a daily basis, or subscribe to AdWords, they are a different breed of customers. I don't think Google could be equipped to handle the "everyday" requests of an AOL customer.

So it comes down to an MSN or Yahoo! to pick up the ball that AOL Time Warner dropped. Of course, Time Warner could continue to operate AOL in hopes of the portal making a 180 degree turn around and start making money again, but I think that's a year away at the earliest. So the question becomes, can Time Warner continue to afford to support a sinking ship?

Rob Sullivan
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