AOL, or America Online, was at one time a giant in the internet service provision industry. Nearly everything was AOL and many million users were connected to it every day in order to use the dialup services that they offered to connect to the nearly new internet.

These days we don’t hear a lot about AOL although many people use their services for instant messaging and other gaming venues. What became of AOL, why did they lose their edge when it comes to internet service provision, and who actually uses AOL these days?

A)L was called the “goliath among Internet service providers” and at one point had more than thirty million users. They ranged over multiple continents. They announced a merger with Time Warner that everyone thought would bring them even more fame and fortune, but the reality is that it did not.

AOL has fallen victim to it’s own proprietary requirements and some poor practices that Americans, as one of the most prolific users of the internet, simply will not tolerate. Rated as one of the best as well as one of the worst internet service providers in the UK, AOL has seen a decline in stock pricing as well as customer base that is nothing short of dramatic.

The former giant in the industry, who once held the hands of more than 30 million users around the globe, today services less than ten million users. Primarily their user base is made up of those who are less technical and less able to understand the choices that they have for internet service provision. In addition to the loss in consumer use, AOL stock prices have dropped from a 226 billion dollar top end, to about 20 billion now. It is barely ahead of Comcast and this reporting comes from 2007. Prices on AOL and user base has decreased still further since then, with a one year EPS growth of negative 32.70%. What brought AOL to the current pass?

To understand where it’s gone, it’s important to understand where it started. Begun as a small venture which was called CVC, AOL was founded by Bill Von Meister. It had one product, an online venue called Gameline, that fed into the Atari 2600. You could buy a modem from the company, pay a fee and then download games and play them for a dollar a game.

The hiring of a strategist and some other technical gurus and 1985 saw the launching of services that were geared toward the Qlink. A service that was specifically for Commodore computers. Gaming and chat were the primary functions of AOL or CVC at this point.

With some work and expansion, Steve Case, hired to build the company built it up as a service that would be used by those who were not familiar with or comfortable with computers and technology. It was the first ISP licensed that required their users to download and to use proprietary technology as well as a browser that they proclaimed to be the best.

Due to the internet being a new arena there were many who wanted to take part but did not have the know how to accomplish it. AOL gave them a GUI rather than DOS command lines and it took control of the newly popular internet for those who wanted to take advantage of the technology but didn’t have the knowledge base to do so.

They were able to use AOL chat room to talk with others from around the world, They were permitted to create a conference room and moderate it. They could house a virtual auditorium. 193 saw Usenet added to AOL.

AOL was dominating the industry, passing Compuserve and Prodigy, but as AOL watched, the internet was changing. A new set of users were arriving and they knew their basics. They wanted to use their own browser, to do things their own way. It was difficult in many ways to connect to AOL and to use other software once you had done so. Lacking the insight to make the change more easily accomplished AOL began to lose business.

Coupled with the broad user base that they had at this point, AOL connections were difficult to attain. The connections were continuously flooded, people were unable to connect to the service they were paying for and thousands a day cancelled accounts because they constantly got a busy signal when trying to connect to a dialup. The AOL connections began to be a joke in the online world, with the AOL purportedly standing for “Always Offline”

AOL remained a standby for many American users however who were very rural and unable to get cable or other types of internet even when it became available. In a move that was remarkably short-sighted, AOL told the customers of its dialup that as of 2006 it would be charging them about 25 dollars per month for dialup access. The broad sweeping increase was the AOL effort to force customers to go to a broadband service. The problem was that many of the AOL users were unable to do so given their geographic location. AOL effectively cut its own profits by forcing users to pay the same for dialup as they would for a cable or DSL access. Again, the loss of customers ensued as many went to other dialup accounts and AOL realizing the issue after the fact lowered the price to 9.95 a month.

Today’s AOL is a different entity. No longer a part of the Time Warner enterprise, they have offered some new perks, but many people believe it was too little, too late. AOL has proven that is in fact short sighted with regard to the needs of the user, and that it did not take into account the growth and expansion of knowledge that the users would undergo and grow with them.