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



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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Arnaldo Rodgers Posted by on 5:52 am, With 0 Reads, Filed under Small Business. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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