The dream is over.
AOL is being purchased by Verizon for $4.4 billion, and while the dealmakers say AOL will become a wholly owned subsidiary that will remain under the leadership of current Chairman and CEO Tim Armstrong, this clearly marks the end of what had been a truly iconic online enterprise. Analysts noted that AOL will account for just over 1% of Verizon's total value, making the former internet leader little more than a pimple on the nose of the giant telecom company.
The demise of AOL seems like a good time to look back at what the company has meant to us all over the years. (I prepared a similar look back at Blackberry in 2013, but this one will be a wee bit different.)
AOL dial-up service
For millions of people, AOL's dial-up service was their introduction to the wonders of the online world. It was a safe, controlled, limited approximation of the internet, and it was often kind of dull (except for those wild forums and chat rooms, back in the early days). I don't miss it (really, who would?), but it actually seemed pretty exciting at the time. On the other hand, there are still lots of people paying for this antediluvian service every month, though I'm betting most of them are 94 years old and probably don't remember that they still have it.
Buying—and then killing—CompuServe (1997)
Many of those who didn't go online first on AOL did so on the competitive service CompuServe, which was slightly less manicured and a little more interesting. As I recall, AOL promised to keep CompuServe separate and maintain what made it special. But everyone knew they wouldn't, and they didn't.
Buying—and killing—Netscape (1998)
When AOL bought browser pioneer Netscape, it seemed like the death knell for the free, open, non-commercial internet that had originally attracted all the coders and nerds. It turns out that was only the beginning of an ongoing series of events that continue to “ruin” the web.
Buying—and pretty much killing—Gateway (2000)
Did you know that AOL spent $800 million for a big chunk of this second-tier PC maker with cow-pattern packaging? No one seems to recall why, or whether all the cash had any discernable effect. A Google search reveals that Gateway actually still exists. Who knew?
Carpet bombing the world with 1 billion free-trial CD-ROMs (1990s)
For people of a certain age, the ubiquitous AOL disks advertising deals like “96 hours of free connection time” were both a curse and an opportunity. They were distributed in cereal boxes, on airplane meal trays, at auto races, at the Super Bowl, and in packages of meat, clogging mailboxes and trashcans for more than a decade. On the other hand, they also supplied an endless supply of art supplies for 3rd grade craft.
Buying Time Warner for more than $150 billion—and almost killing both companies in the process (2000)
When the dot com boom turned to bust, AOL almost dragged down the junior partner in this deal, to the point where they had to change the company's stock ticker symbol from AOL to TWX in 2003. And eventually the company had to spin off what was left of AOL in 2009 to free Time Warner to reclaim its old-school glory. It's now a classic worst-deal-ever case study in business schools around the world.
Buying TechCrunch and the Huffington Post (2010-2011)
For some reason, AOL decided it needed to be a content company, and bought the already insufferable tech site TechCrunch and blog-gone-wild conglomeration the Huffington Post, led by charismatic but controversial leaders Michael Arrington and Arianna Huffington, respectively. Arrington left soon after the deal, but Huffington is still there, enriched by notoriously not sharing any of the $300 million proceeds with the site's legions of unpaid contributors. Most observers seem to think that Verizon has no interest in these “middlebrow” content properties, and will likely sell them as soon as it can.
In fact, Verizon doesn't seem to care about any of this. Reports indicate that the telecom carrier is interested only in AOL's slick but relatively under-the-radar ad-serving technology. Good for them, I guess, but make no mistake, this deal represents the death and dismemberment of a one-time cultural icon. Sure, the brand has fallen on hard times, but I bet there are plenty of people who still get a little weepy whenever they catch a matinee rerun of You've Got Mail. Of course, the rise of cellphones has rendered the plot of that flick—and many others like it—completely moot. Kind of like AOL itself.