First take: AOL’s bumpy tale isn’t over yet

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By Edward C. Baig

Even before considering what AOL’s future might be like as part of Verizon Communications you can’t help but dwell on the company’s notable — and oft-bumpy — history.

Prior to becoming a household name in the early to mid-1990s, America Online found itself competing in the nascent “dial-up” world against online bulletin board pioneers such asCompuServe, Prodigy and GE-owned GeNie.

AOL ultimately prevailed against such rivals, in large measure because its dial-up disks were everywhere. Co-founder Steve Case’s strategy was to acquire new subscribers at all costs.

Asked on the Quora Q&A site a few years ago how much AOL spent on distributing those CDs, Case responded: “I don’t remember the total spending but do recall in the early 1990s our target was to spend 10% of lifetime revenue to get a new subscriber. At that time I believe the average subscriber life was about 25 months and revenue was about $350 so we spent about $35 to acquire subscribers.”

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