As expected, the sea change at AOL is coming. It's avoiding the dial-up ISP business, giving away core services like email and software for free. The strategy will accelerate the decline of its core
business, which now represents 80 percent of its revenue, costing the company about $2 billion. What changes should we expect? AOL members who use other service providers have no reason to keep paying
the company. Hundreds--if not thousands--of customer service reps, marketers and ISP-related AOL staff will likely be laid off. And those ubiquitous "Try AOL, 1,000 hours Free!" discs you never asked
for but somehow managed to find you will be a distant, bad memory. The decision--announced this morning by AOL parent Time Warner--effectively signals the end of a long, painful era in the company's
history. The AOL-Time Warner merger in 2000 quickly turned into a disaster; after the dot-com bust, AOL became dead weight. The problem got worse as subscriber defection became a rite of passage for
AOL subscribers--who realized they could pay less for ISP service. Missing out on the broadband revolution only intensified the problem. Even so, the company will maintain its dial-up service at $26
per month for those who don't upgrade to broadband. The changes will be enacted in early September.
Read the whole story at Forbes.com »
