By: Vileta Pinkham & Kelley Hamrick Kelley Hamrick

America Online’s Mission Statement “To lead the development of a new interactive medium that eliminates traditional boundaries between people and places to create a new kind of interactive global community that holds the potential to change the way people obtain information, communicate with one another, buy products and services, and learn.”

AOL’s Company Strategy To continue investment in the growth of its subscriber base, pursue related business opportunities often through joint ventures and acquisitions, provide a full range of interactive services, and maintain technological flexibility. To continue investment in the growth of its subscriber base, pursue related business opportunities often through joint ventures and acquisitions, provide a full range of interactive services, and maintain technological flexibility.

AOL’s Rapid Growth December 1996, AOL was the easiest, most popular and most well known way to get online December 1996, AOL was the easiest, most popular and most well known way to get online AOL had 8.5 million member sessions a day AOL had 8.5 million member sessions a day 7 million s sent to 12 million recipients per day 7 million s sent to 12 million recipients per day $750,000 per day in merchandise sales $750,000 per day in merchandise sales

Problems With AOL Too many resources offered that are not profitable Too many resources offered that are not profitable Hard to compete in current market Hard to compete in current market Needs a foundation that can support broadband Needs a foundation that can support broadband Bad billing practices Bad billing practices Flat rate fees Flat rate fees Poor customer service Poor customer service

Strengths Persistence Persistence Ambition Ambition Attempting to control the media Attempting to control the media Brand name recognition Brand name recognition Rapid growth Rapid growth Customer care Customer care Generation of revenue Generation of revenue

Weaknesses The opening up of their cable systems to rival internet providers The opening up of their cable systems to rival internet providers Stockholder premium Stockholder premium Local government Local government

Opportunities Music Music Entertainment Entertainment Technology Technology broadband broadband

Threats The introduction of broadband The introduction of broadband Highly competitive market Highly competitive market

Company Profile AOL emerged from a firm founded in the early 1980’s as Control Video Corp., which aimed to create an online service that specialized in games. AOL emerged from a firm founded in the early 1980’s as Control Video Corp., which aimed to create an online service that specialized in games.

AOL’s Massive Growth AOL’s Massive Growth AOL emphasized communication among members AOL emphasized communication among members –Private rooms held up to 27 people and created by any user –Conference rooms held up to 48 people and created with AOL’s permission –Auditoriums unlimited amount of people had a stage and rows of 27 people created with AOL’s permission

Change in Pricing Originally AOL charged the consumer by the hour but in 1996, AOL changed to a flat rate of $19.99 and AOL’s customer base grew to 10 million. Originally AOL charged the consumer by the hour but in 1996, AOL changed to a flat rate of $19.99 and AOL’s customer base grew to 10 million. AOL’s connections were flooded with people trying to get on and many people cancelled their subscriptions due to busy signals.

Company Profile Cont’d Control video Corp failed to meet strong competition and Apple withdrew leaving Quantum holding software it had developed for Applelink Quantum bounced back by offering diskettes that contained America online software AOL has tried to position itself as the first digital media company

AOL Organization AOL corporation AOL corporation AOL networks AOL networks ANS access ANS access AOL studios AOL studios

AOL Marketing Increase the general visibility of AOL Make it easy for customers to subscribe to and experiment with its services AOL uses special retention packages

AOL has been expanding into business to business markets through customized network solutions provided to individual businesses and professional communities and industries

AOL User Reputation AOL has geared towards new users of the internet so their users have a reputation of not knowing much about the internet.

AOL User Reputation AOL also provided its user a way to get on the Usenet bulletin board and this was earmarked for more experienced and more sophisticated internet user. The bulletin board was inundated with requests for porn, bootlegged software and hacking information. AOL discontinued this practice in 2005 and directed users to log onto Google.com for news groups.

AOL User Reputation AOL accounts do not show the person’s full name like other accounts do so the recipient is less likely to know who the mail is from and also AOL offered free hours and internet trollers were making accounts and keeping themselves anonymous.

Billing Disputes AOL faced a lot of law suits based on improper billing procedures after accounts had been cancelled. AOL faced a lot of law suits based on improper billing procedures after accounts had been cancelled. Class Action suit was also brought concerning AOL’s procedure of billing minutes Class Action suit was also brought concerning AOL’s procedure of billing minutes

Account Cancellation New York Attorney General’s office received 300 complaints from AOL users about trying to cancel their accounts. AOL would reward their customer service reps to retain consumers and even when the consumer thought they had been cancelled, they would keep getting billed. New York Attorney General’s office received 300 complaints from AOL users about trying to cancel their accounts. AOL would reward their customer service reps to retain consumers and even when the consumer thought they had been cancelled, they would keep getting billed. On August 25 th, 2005, AOL agreed to pay $1.25 million to the State of NY and reformed its customer service procedures. On August 25 th, 2005, AOL agreed to pay $1.25 million to the State of NY and reformed its customer service procedures.

Possible Solutions AOL now offers broadband so they can more effectively compete with other internet companies. AOL now offers broadband so they can more effectively compete with other internet companies. Change billing practices and give incentives to consumers to stay with AOL. Change billing practices and give incentives to consumers to stay with AOL. Make sure customer service actually cancels a consumer if that is what the consumer wants. Make sure customer service actually cancels a consumer if that is what the consumer wants.

Possible SolutionsCont’d Market to a more savvy internet user. Market to a more savvy internet user. Upgrade equipment so that all consumers can get online when they want and need to. Upgrade equipment so that all consumers can get online when they want and need to. Diversify their holdings and make sure that AOL has holdings in more technologically advanced companies such as wireless telephones an telephone companies that use broadband instead of conventional phone lines. Diversify their holdings and make sure that AOL has holdings in more technologically advanced companies such as wireless telephones an telephone companies that use broadband instead of conventional phone lines.