'Gunning for growth,' AOL's Steve Case shot himself in the foot
Article Abstract:
America Online's (AOL) customer-service breakdown constitutes a breach of ethics in that the company promised its customers a service that it is unable to deliver. AOL's significant price cuts, in light of its admission to imminent difficulties meeting increasing demands, are a direct result of the company's greed for market share at any cost among the growing on-line competition. The reality of AOL's quality assurances to its customers is unremitting busy signals. And since millions of business people have become dependant on AOL's services, the company's failure to deliver on its promises effects its customers' customers. AOL's Chairman, Steve Case, acknowledges the company's projections have failed, but he qualifies this by maintaining that the problems only occur during business hours. Case also places ultimate blame for the crisis on his members whose 'overwhelming preference' for flat-rate pricing, despite his potential service problem warnings, dictated the company's actions.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1997
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AOL wants to be viewed like a cable-TV company; it remains to be seen if that analogy really fits the on-line industry
Article Abstract:
America Online's (AOL) reorganization is worrying investors. The company is adopting a business model similar to those of cable TV networks instead of an online service. The company has hired cable-industry expert Robert Pittman to run one of its three new divisions. AOL plans to rely on advertising as its major source of revenue instead of subscriber fees. Some industry analysts are concerned that the new model will not work. Cable TV companies have a monopoly, while AOL is in an extremely competitive market. The cable companies have high levels of recurring revenues with large profit margins, while AOL lacks significant cash flow. AOL does not expect a positive cash flow until its 3rd qtr ending Mar 31, 1997. The reorganization includes a change in the company's accounting practices, which includes a $385 million charge that shows AOL has never made a profit. The company expects its profits to come in part from fees charged for online shopping services.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1996
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Anonymity on-line? It depends who's asking
Article Abstract:
On-line anonymity is not necessarily an absolute safeguard against legal embroilments, as evidenced by a recent case involving the America Online online service. Although America Online allows subscribers to use names other than their own, the service recently revealed the name and relevant information about a subscriber in response to a petition of discovery filed by a Caribbean resort called the Carib Inn that may be used in a lawsuit. The management at the Carib Inn is considering legal action against an America Online subscriber using the name Jenny TRR for defamation based on a message posted on an America Online bulletin board. America Online regularly complies with requests for information related to pending legal action and willingly provides information necessary to criminal investigations, but the service's willingness to reveal information in civil litigation cases remains a point of contention.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1995
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