• by Masha Geller , June 9, 2003

The debate about AOL's possible demise is still raging in my inbox (point/counterpoint), and an announcement from the company today is sure to add fuel to the fire.

The company said today that it would release AOL 9.0 in the summer, not in the fall, and pack it full of stuff geared specifically for high-speed users. The company said in a statement that AOL 9.0 will help protect high-speed users with anti-virus scanning, improved parental controls and customized firewall tools, and include an adaptive filter that learns to recognize what type of email a user considers spam. Additionally, AOL 9.0 will offer a media player that supports a new streaming media format developed by America Online.

The question is, "will these improvements save AOL?"

I still doubt it. Why? One of our readers, David Yancey, put it best:

"Sure, they may have the meatier portions of a cash cow for some years to come, as Steve points out, but that is not very encouraging to an investor who plans to buy the stock and hold it for the next twenty years. Yes, AOL has the financial wherewithal to not merely whether this current storm, but to change the ship's direction. But I and others see the rocks dead ahead, and the AOL management team, including its former CEO, has not shown much evidence of being able to chart any course or mix of services other than the one that is aimed at the triple audience segments of low-speed users, web newbies, and those who are satisfied to be spoon-fed their online content. Don't get me wrong: I have nothing against these users, but would not build a business plan based on them unless I had a management team and disciplined methodology that ensures we would be the low-cost producer for decades to come. These folks may buy a lot of stuff, but they won't pay more than they absolutely have to for entertainment, and that is the business AOL is in.

"AOL's real competition is themselves, in short. It always has been. They would do well to stay in the T/W mass-market-oriented fold unless they have a real plan to make a new AOL that is clearly differentiated from the old one."

Where do you stand on the issue?