A Brief History of AOL - America Not Online?

• Jun. 5, 2003

With all the news AOL has been making in the past weeks, we though we should take a brief look into the history of the company from its beginnings in 1985. AOL is going thru some tough times as of late, with a 26 billion debt, shareholders dumping millions of shares, legal problems and so on.  Changes are needed to keep the company profitable.

AOL (American Online) was originally founded as Quantum Computer Services in 1985 and in November 1985 it released its first online service called Q-Link which was launched on Commodore Business Machines.  In January 1986 they had a total of 10,000 users using Q-Link.

In October 1989, AOL service launched for Macintosh and Apple II and in October 1991, Quantum Computer Services officially changes its name to America Online, Inc. This same year marked the DOS version of AOL being launched. March 19th, 1992 is the date that AOL went public on the NASDAQ. The original price was $11.50 under the symbol AMER.

After four years of service in 1993, AOL was up to 500,000 members providing access to the internet, and offered access to its own online information and services which were aimed at the average American consumer. This year also marks the date that AOL launches the windows version of AOL.  In 1994 they surpassed 1 million members and also acquired the following companies:  BookLink Technologies, developer of Internet applications, NaviSoft, developer of Internet publishing tools, and Redgate Communications, multimedia publishing company.  Greenhouse is also launched at this time to develop original content online.

1994 is also the year that they launch WAR against Microsoft. AOL is determined to beat Microsoft when their new online service comes out.  In 1994 Prodigy announces plans to provide users with access to the Web.

1995 was a busy year for AOL as they surpassed 4.5 million members.  PC Magazine, Family PC Magazine, Online Access Magazine and Information Industry Association rate AOL "Best Consumer Online Service" and shares reach $58.38. They also launch GNN, AOL's direct Internet service and acquire ANS, a commercial Internet access provider. Another important date AOL remembers is August 24, 1995, as MSN officially launches and the MSN vs. AOL rivalry begins.

In 1996 AOL introduced the $19.95/month unlimited pricing plan. This was in response to MSN's unlimited pricing plan that was released just beforehand. Later that year AOL services reach 7 million members. Excite becomes the company's exclusive Internet search and directory service.  The company also launched version 3.0 for Windows, and moves into more countries with the launch of AOL France, AOL UK and AOL Canada later that year.

1997 for AOL shows yet continued expansion the addition of AOL Japan. They also surpass 1 million members outside the US, while in the US AOL service surpasses 10 million members.  AOL is now delivering more daily mail in the form of e-mail and instant messages than the US Postal Service does. This was a big turning point with the realization of how big the internet was going to be (and still we wonder how much bigger it will get).

1998 showed some interesting buys from AOL. It completes the acquisition of CompuServe and announces the acquisition of Netscape, as well as a strategic partnership with Sun Microsystems. They surpass 15 million members and continue to expand in other foreign market with AOL Australia.

1999 showed to be a busy year for AOL as they moved into the DSL market and continue to acquire more businesses. January 12th 1999 AOL and Bell Atlantic announce partnership to deliver high-speed DSL access and, at the end of the year AOL service surpasses 20 million members. 1999 was also the year they acquired When Inc, MovieFone, Inc, Spinner.com, Winamp, SHOUTcast, Tegic Communications, and Digital Marketing Services, Inc.

Motorola and AOL get together to plan to develop wireless application for AIM this year as well. AOL launches in Hong Kong and Brazil continuing to expand in the foreign markets.

2000 proved to be a ground breaking year for the company as AOL and Time Warner announce plans to merge. America Online announced that it will acquire Time Warner to create the world's largest media company. The new company will be called AOL Time Warner and will combine AOL's online services with Time Warner's vast media and cable assets. The company's customer base surpasses 26 million members, and they acquire iAmaze, Quack.com, and MapQuest Inc. They also launch AOL in Argentina, and Mexico.

In 2001 AOL service surpasses 33 million members as AOL and Time Warner complete merger to create AOL Time Warner on January 11th, 2001. They continue to improve the customer online experience.  AOL and Amazon.com announce an alliance to develop and offer enhanced online shopping experience, while AOL Music announces initiatives in online music, and MapQuest releases a new mobile version making maps available on wireless PDAs.  AOL and AT&T Wireless announce plan to develop mobile service with a customized version of AOL desktop service including mail, instant messaging, and content.  And finally New AOL for Mac OS X launched.

In 2002, AOL passes $33 billion in member online spending in 2001 driven by record $11 billion fourth quarter. Rogers AT&T Wireless teams with ICQ and AOL Canada Inc. to offer ICQ messaging on mobile devices in Canada. The company also  launches AOL Alerts to deliver content and information to members through e-mail, AIM or any variety of mobile and handheld devices. AOL's customer base surpasses 34 million members; with members now using AOL more than 1 billion hours each month. They launches AOL for Small Business for the small-office/home-office market, and introduce Broadband Radio@AOL, the first online radio service designed for AOL Broadband members.

In 2003 AOL Time Warner have encountered a few problems. AOL Time Warner is 26 billion dollars in debt, AOL accounting practices under investigation, AOL executives are accused of insider trading because they attempted to boost the price of shares before the AOL Time Warner Merger. At the same time Ted Turner continues to sells more AOL stock.

On the bright side, AOL continues to strive to improve its customer experience and AOL takes spammers to court as junk email continues to rise.

The big question is what is going to happen next with AOL. Will they finally be bought out by another company? Will they continue to look at selling off assets that they have acquired over the years? The book division seems to be the first to go with Bertelsmann's Random House unit or the Perseus Books Group as possible buyers.

The possibility of selling off of The Atlanta Braves cannot be sitting to well with Ted Turner, however. A long standing lawsuit was also settled as AOL agreed to drop the antitrust lawsuit against Microsoft in exchange for $750 million and a range of other concessions and cooperative arrangements. Those included a seven-year license to use Microsoft's Internet Explorer browser technology without charge on AOL. This 7 year deal with Microsoft will provide the company with a great chance to continue to move forward in the future. But still the 26 billion dollars in debt is something that they desperately need to overcome.

Gerard Manning
Searchengineposition.com
Search Engine Positioning
specialists