Time Warner has an uncanny ability to pick Internet’s red letter days. Its merger with America Online signaled the beginning of the end for the Internet Boom (or Bubble) 1.0. Today, by deciding to make AOL free, they sent dial-up to its final resting place.
Sure you can buy dial-up connections (and related services) and many will continue to do so, but for all practical matters from this point forward, its broadband or nothing.
Broadband, the platform not the service, is an omnipresent connection that has trained us to become intimate with the Google Search bar, spend hours on MySpace and get our just desserts on You Tube.
By throwing in the towel on its access business, AOL/Time Warner is telling all its $25-a-month paying customers: you can give this money to our competitors such as AT&T or Comcast, just keep using our friendly services. Either this is an incredibly astute strategy or simply the biggest corporate bungle since… well AOL & Time Warner merged.
Dick Parsons’ decision to tear down the (AOL) wall could go either way – just like the fortunes of the opposing super powers on two sides of the Berlin Wall. If online advertising continues to boom, it would be bouquets for Parsons, Jon Miller and AOL’s self proclaimed savior, Jason Calacanis. If the advertising market heads south, the trio would find themselves on the wrong side of the street.
Nevertheless, AOL’s decision is testament to broadband’s disruptive powers, and not even the biggest company with the deepest pockets is immune to it. Why? Because broadband causes behavioral change, and when a company can bottle that behavior change into a business model, it can make a lot of money. Google is a good example.
Thanks to broadband, Google is just a click away. We search, find and consume information; a marked shift from the old days when we went to destination sites and looked for what was available. Is it hard to imagine that in five years from now, most broadband users will expect real listings sans a map, and a video tour of the property. Or that online personals would come with an ability to chat, either via phone, IM or video.
AOL is simply seeing the writing on the wall. And changing … though the jury is still out on whether they can survive the change. Who’s next? Lets just say every Internet company from the pre-broadband era will need to reinvent, and rethink or lose everything. AOL, and a reluctant Time Warner are just the harbinger of the future.
Charts source: eMarketer