AOL LLC (formerly America Online, Inc.) is an American global Internet services and media company operated by Time Warner and was headquartered in Loudoun County, Virginia until late April 2008 when it was moved to new offices at 770 Broadway in New York City. Founded in 1983 as Quantum Computer Services, it has franchised its services to companies in several nations around the world or set up international versions of its services.
AOL is perhaps best known for its online software suite, also called "AOL", that allowed millions of customers around the world to access the world's largest "walled garden" online community and eventually reach out to the internet as a whole. At one time AOL's membership was over 30 million members worldwide, most of whom accessed the AOL service through the AOL software suite.
America Online, Inc., as the company was then called, was led by executives from AOL, SBI and Time Warner. Gerald Levin, who had served as CEO of Time Warner, was CEO of the new company. Steve Case served as Chairman, J. Michael Kelly (from AOL) was the Chief Financial Officer, Robert W. Pittman (from AOL) and Dick Parsons (from Time Warner) served as Co-Chief Operating Officers. The total value of AOL stock subsequently went from $226 billion to about $20 billion. Similarly, its customer base has decreased to 10.1 million subscribers as of November 2007, just narrowly ahead of Comcast and AT&T Yahoo!.
AOL is a company in transition, made evident by discussions of buy-outs and joint ventures during a period of dramatic decline in AOL's subscriber base. News reports in late 2005 identified companies such as Yahoo!, Microsoft, and Google as candidates for turning AOL into a joint venture; those plans were apparently abandoned when it was revealed on 20 December 2005 that Google would purchase a 5% share of AOL for $1 billion.
AOL was rated both one of the best and worst Internet suppliers in the UK, according to a poll by BBC Watchdog. On 31 March 1997, the short lived eWorld was purchased by AOL, forcing the 115,000 users to subscribe to AOL. The ISP side of AOL UK was bought by The Carphone Warehouse in October 2006 to take advantage of their 100,000 LLU customers which made The Carphone Warehouse the biggest LLU provider in the UK.
|AOL release timeline|
|1989||America Online for Macintosh received as a popular Apple Macintosh BBS|
|February 1991||AOL for DOS launched|
|January 1993|| AOL 2.0 for the Apple Macintosh released, |
AOL 1.0 for Microsoft Windows 3.x launched
|June 1994||AOL 1.5 for Microsoft Windows 3.x released|
|September 1994||AOL 2.0 for Microsoft Windows 3.x released|
|June 1995||AOL 2.5 for Microsoft Windows 3.x released|
|June 1995||AOL 3.0 (Win16) for Windows 3.x/Windows 95/Windows NT released|
|June 1996||AOL 3.0 for Windows 95 released|
|July 1998 / June 1999||AOL 4.0 (Casablanca) and Refresh 2 released|
|September 1999||AOL 5.0 (Kilimanjaro) released|
|June 2000||AOL 5.0 for 9x/NT/2K (Niagara) released|
|October and December 2000||AOL 6.0 (K2 - Karakorum) and Refresh released|
|September 2001||AOL 6.0.2 for XP launched|
|October and December 2001, May and July 2002||AOL 7.0 (Taz) and Refresh 1, Refresh 2, and Refresh 2 Plus released|
|October 2002||AOL 8.0 (Spacely) released|
|April 2003||AOL 8.0 Plus (Elroy) launched|
|August and September 2003||AOL 9.0 Optimized (Bunker Hill / Blue Hawaii) and Refresh released|
|May 2004||AOL 9.0 Optimized SE/LE (Thailand / Tahiti) released|
|November 2004, July 2005||AOL 9.0 Security Edition SE/LE (Strauss) and Refresh released|
|August 2005 to March 2006||AOL Suite Beta launched (cancelled)|
|September 2006, March 2007||AOL OpenRide (Streamliner) launched|
|November 2006, April 2007||AOL 9.0 VR and Refresh (Raga) released (AOL 9.0 for Microsoft Windows Vista but also works with Microsoft Windows 98, ME, 2000 and XP)|
|September 2007||AOL Desktop for Mac Beta released|
|October 31, 2007||AOL 9.1 (Tarana) released|
|December 2007||AOL Desktop (aka AOL 10.0) launched|
|May 2008||AOL Desktop for Mac 1.0 officially launched|
|September 2008||AOL Desktop 10.1 released|
AOL began life as a short-lived venture called Control Video Corporation (or CVC), founded by Bill von Meister. Its sole product was an online service called Gameline for the Atari 2600 video game console after von Meister's idea of buying music on demand was rejected by Warner Brothers. Subscribers bought a modem from the company for $49.95 and paid a one-time $15 setup fee. Gameline permitted subscribers to temporarily download games and keep track of high scores, at a cost of $1 per game. The telephone disconnected and the downloaded game would remain in Gameline's Master Module and playable until the user turned off his console or downloaded another game.
In January 1983, Steve Case was hired as a marketing consultant for Control Video on the recommendation of his brother, investment banker Dan Case. In May 1983, Jim Kimsey became a manufacturing consultant for Control Video, which was near bankruptcy. Kimsey was brought in by his West Point friend Frank Caufield, an investor in the company. Von Meister quietly left the company in early 1985. Control Video was reorganized as Quantum Computer Services, Inc. on May 24, 1985, with Kimsey as Chief Executive Officer and Marc Seriff as Chief Technology Officer. Out of 100 employees from Control Video, only 10 remained in the new company. Case himself rose quickly through the ranks; Kimsey promoted him to vice-president of marketing not long after becoming CEO, and later promoted him further to executive vice-president in 1987. Kimsey soon began to groom Case to ascend to the rank of CEO, which he did when Kimsey retired in 1991.
Kimsey changed the company's strategy, and in 1985 launched a dedicated online service for Commodore 64 and 128 computers, originally called Quantum Link ("Q-Link" for short). The Quantum Link software was based on software licensed from PlayNet, Inc. In May 1988, Quantum and Apple launched AppleLink Personal Edition for Apple II and Macintosh computers. In August 1988, Quantum launched PC Link, a service for IBM-compatible PCs developed in a joint venture with the Tandy Corporation. After the company parted ways with Apple in October 1989, Quantum changed the service's name to America Online.
From the beginning, AOL included online games in its mix of products; many classic and casual games were included in the original PlayNet software system. In the early years of AOL the company introduced many additional innovative online interactive titles and games, including:
In February 1991 AOL for DOS was launched using a GeoWorks interface followed a year later by AOL for Windows. This coincided with growth in pay-based online services, like Prodigy, CompuServe, and GEnie. AOL discontinued Q-Link and PC Link in the fall of 1994.
In particular was the Chat Room concept from PlayNet, as opposed to the previous paradigm of CB-style channels. Chat Rooms allowed a large group of people with similar interests to convene and hold conversations in real time, including:
In March 1994, AOL added access to USENET to the features it offered.
Originally, AOL charged its users an hourly fee, but in 1996 this changed and a flat rate of $19.99 a month was charged. Within three years, AOL's userbase grew to 10 million people. During this time, AOL connections would be flooded with users trying to get on, and many canceled their accounts due to constant busy signals (this was often joked "AOL" standing for "Always Off-Line").
AOL was quickly running out of room in 1996 for its network at the Vienna, VA campus and moved to Dulles, VA a short distance away. The move to Dulles took place in mid-1996 and provided room for future growth.
AOL was relatively late in providing access to the open Internet. Originally, only some Internet features were accessible through a proprietary interface but eventually it became possible to run other Internet software while logged in through AOL.
Since its merger with Time Warner (owners of the aforementioned Warner Bros.), the value of AOL has dropped significantly from its $240 billion high. It has seen similar losses among its subscription rate, with no quarter in which its net subscriber base actually increased since 2002. AOL has since attempted to reposition itself as a content provider similar to companies such as Yahoo! as opposed to an Internet service provider.
By the end of September 2007 as part of preparation for the New York move, AOL completed the closure of its former primary Network Operations Center, Reston Technology Center, which it sold to Sprint Nextel in early 2007. This sale enabled AOL to consolidate its Northern Virginia operations from three sites (Dulles, Manassas, Reston) to two (Dulles and Manassas; personnel primarily went to Dulles, while machines moved to Manassas). AOL took advantage of the move to both reduce its overall hardware inventory and to determine a "right size" for its Network Operations Center staff after consolidating the three sites into two.
As part of the impending move to New York and the restructuring of responsibilities at the Dulles headquarters complex after the Reston move, AOL CEO Randy Falco announced on 15 October 2007 plans to lay off 2000 employees worldwide by the end of 2007, beginning "immediately". That evening, over 750 employees at Dulles alone received notices to attend early morning meetings the next day; those employees were laid off on 16 October 2007, though the employees would remain on the payroll until 14 December 2007 in accordance with the Worker Adjustment and Retraining Notification Act. Other employees whose groups were due for phase-out as part of the restructuring were informed on 16 October 2007 that they would be kept on until 14 December 2007 to complete any outstanding tasks, after which they would be laid off. The reduction in force was so large that virtually every conference room within the Dulles complex was reserved for the day as a "Special Purpose Room", where various aspects of the layoff process were conducted for outgoing employees; remaining employees at Dulles were quick to dub the mass layoff "Bloody Tuesday" in online blogs and news reports. An unspecified number of staff at the former Compuserve facility in Columbus, OH were also released, as well as the entire Tucson Quality Analysis shop, a number of AOL employees working at the former Netscape facility in Mountain View, CA, the development team in France, and practically the entire Moncton, New Brunswick, Canada member services call center site. The end result was a near 40% layoff across the board at AOL, including a substantial number of Systems Operations personnel, a significant change from previous layoffs where SysOps employees routinely suffered only minor personnel reductions.. An additional round of layoffs, mostly confined to analysis groups and the staff at AOL Voice Services in Halifax, Nova Scotia, occurred on 11 December and 12 December 2007.
In 1999, a class action lawsuit was filed against AOL citing violations of U.S. labor laws in its usage of CLs. The Department of Labor investigated but came to no conclusions, closing their investigation in 2001. In light of these events, AOL began drastically reducing the responsibilities and privileges of its volunteers in 2000. The program was eventually ended on 8 June 2005. Current Community Leaders at the time were offered 12 months of credit on their accounts.
AOL's use of remote volunteers dated back to the establishment of its Quantum Link service in 1985.
AOL was sued by the Ohio Attorney General in October 2003 for improper billing practices. The case was settled on June 8, 2005. AOL agreed to resolve any consumer complaints filed with the Ohio AG's office. In December 2006, AOL agreed to provide restitution to Florida consumers to settle the case filed against them by the Florida Attorney General. Their billing practices violated Florida's Deceptive and Unfair Trade Practices Act.
Many customers complained that AOL personnel ignored their demands to cancel service and stop billing. On 24 August 2005, America Online agreed to pay $1.25 million to the state of New York and reformed its customer service procedures. Under the agreement, AOL will no longer require its customer service representatives to meet a minimum quota for customer retention in order to receive a bonus.
On 13 June 2006, a man named Vincent Ferrari documented his account cancellation phone call in a blog post, stating he had switched to broadband years earlier. In the recorded phone call, the AOL representative refused to cancel the account unless the 30-year-old Ferrari explained why AOL hours were still being recorded on it. Ferrari insisted that AOL software was not even installed on the computer. When Ferrari demanded that the account be canceled regardless, the AOL representative asked to speak with Ferrari's father, for whom the account had been set up. The conversation was aired on CNBC. When CNBC reporters tried to have an account on AOL cancelled, they were hung up on immediately and it ultimately took more than 45 minutes to cancel the account.
On 19 July 2006, AOL's entire retention manual was released on the Internet. (7MB PDF).
On 3 August 2006, Time Warner announced that the company would be dissolving AOL's retention centers due to its profits hinging on $1 billion in cost cuts. The company estimated that it would lose more than six million subscribers over the following year.
Later, AOL discontinued providing access to Usenet on 25 June 2005 . No official details were provided as to the cause of decommissioning Usenet access, except providing users the suggestion to access Usenet services from a third-party, Google Groups. Currently, AOL provides community-based Message Boards in lieu of Usenet.
There have been many complaints over rules that govern an AOL user's conduct. Some users disagree with the TOS, citing the guidelines are too strict to follow coupled with the fact the TOS may change without users being made aware. A considerable cause for this was likely due to alleged censorship of user-generated content during the earlier years of growth for AOL.
This decision has drawn fire from MoveOn, which characterizes the program as an "e-mail tax", and the EFF, which characterizes it as a shakedown of non profits. A website called Dearaol.com was launched, with an online petition and a blog that garnered hundreds of signatures from people and organizations expressing their opposition to AOL's use of goodmail.
Esther Dyson defended the move in a New York Times editorial saying "I hope Goodmail succeeds, and that it has lots of competition. I also think it and its competitors will eventually transform into services that more directly serve the interests of mail recipients. Instead of the fees going to Goodmail and EON, they will also be shared with the individual recipients.".
Other members of the antispam and blogging community are broadly critical of moveon.org and the EFF's attempts to characterize this as a "shakedown".
Tim Lee of the Technology Liberation Front posted an article that questioned the EFF's adopting a confrontational posture when dealing with private companies. Lee's article cited a series of discussions on Declan McCullagh's Politechbot mailing list on this subject between the EFF's Danny O'Brien and antispammer Suresh Ramasubramanian, who has also compared the EFF's tactics in opposing Goodmail to tactics used by Republican political strategist Karl Rove. Spamassassin developer Justin Mason posted some criticism of the EFF's and Moveon's "going overboard" in their opposition to the scheme.
The dearaol.com campaign lost momentum and disappeared, with the last post to the now defunct dearaol.com blog - "AOL starts the shakedown" being made on 9 May 2006.
On 4 August 2006, AOL released a compressed text file on one of its websites containing twenty million search keywords for over 650,000 users over a 3-month period between 1 March 2006 and 31 May, intended for research purposes. AOL pulled the file from public access by 7 August, but not before its wide distribution on the Internet by others. Derivative research, titled " A Picture of Search" was published by authors Pass, Chowdhury and Torgeson for The First International Conference on Scalable Information Systems
The data are being used by Web sites such as AOLstalker for entertainment purposes, where users of AOLstalker are encouraged to judge AOL clients based on the humorousness of personal details revealed by search behavior.
On Friday, 25 August 2006, AOL announced that it had signed a deal with several major movie studios to open an online video store allowing users to "download to own" full length movies and television shows. The deal was signed with News Corporation's 20th Century Fox, Sony Corp.'s Sony Pictures Home Entertainment, NBC Universal's Universal Pictures, and corporate sibling Warner Bros. Home Entertainment Group