America Online, Inc., multifaceted computer service company that operates two Internet service providers: America Online (AOL) and CompuServe. The company supplies its subscribers with access to the Internet, electronic mail (e-mail), and other services. Other features of AOL and CompuServe include chat rooms, which allow users to exchange live messages on various topics; electronic versions of popular newspapers and periodicals; software libraries from which users can download sound clips, games, and other programs; and online shopping. The company is based currently in Dulles, Virginia, but plans to move its corporate headquarters to New York City in the spring of 2008. AOL is a subsidiary of media giant Time Warner Inc.
ORIGINS
Company founder Stephen Case grew interested in online computer services in the early 1980s while working as an executive for Pizza Hut. In 1983 he left that company to join an online gaming service named Control Video. In 1985 Case helped reorganize the financially ailing company as Quantum Computer Services Inc. The new company launched Q-Link, an online service for users of Commodore computers. Soon Quantum expanded its service to users of other personal computers.
In 1989 Quantum launched America Online (AOL), a nationwide online service providing news and information in a user-friendly, graphical format. The company charged consumers a monthly fee based on the number of hours spent using the service. In 1991 Quantum changed its name to America Online, Inc., and Case became chief executive officer. The company embarked on an aggressive marketing effort that included mailing thousands of free computer discs to consumers so they could access the service for a free trial.
GROWTH AND DEVELOPMENT
Along with rivals CompuServe and Prodigy, America Online helped transform online computing from a domain of the technically savvy to a tool for the masses. AOL played a key role in this shift because its graphical environment appealed to a large audience. Membership grew from 500,000 in December 1993 to 1 million in August 1994. In August 1995 AOL became the world’s largest online service, with more than 3 million members.
The growing popularity of the Internet in the mid-1990s appeared to spell trouble for America Online. Numerous other companies offered users access to the Internet and World Wide Web, which offered many of the services provided by AOL. America Online responded by offering a gateway to the World Wide Web through its service. In addition, America Online signed agreements with AT&T, Inc., Microsoft Corporation, and Netscape Communications Corporation to include access to AOL in some of those companies’ key products and services. America Online also began expanding into Europe and Asia.
In December 1996 the company began offering unlimited usage for a flat monthly fee. By early 1997 membership soared to 8 million users. The unexpectedly rapid growth overwhelmed AOL’s network capacity, forcing the company to offer refunds to subscribers blocked from the service. In 1998 America Online acquired rival CompuServe’s 2.6 million subscribers from telecommunications provider WorldCom as part of a three-way deal. CompuServe’s online service became an America Online subsidiary. In return, America Online sold its high-capacity Internet network to WorldCom.
In 1999 America Online purchased Netscape, the developer of Netscape Navigator, a software tool that allows computer users to browse the Internet using a graphical user interface. Hoping to expand its electronic commerce operations, America Online also forged a strategic alliance with computer manufacturer Sun Microsystems. The company planned to combine Sun’s high-performance servers and workstations, Netscape’s browsing software, and AOL’s consumer-marketing operations.
In January 2000 America Online and entertainment giant Time Warner announced their intention to merge into one company. The $106-billion deal, completed in January 2001, marked one of the largest corporate mergers in history. The new company, AOL Time Warner, became a leader in the Internet, media, and entertainment industries. Within only two years, however, the merger came to be regarded largely as a failure. As the dot-com bubble burst in 2000 and 2001, AOL Time Warner’s stock price fell sharply. The subsequent disclosure that both the Securities and Exchange Commission (SEC) and the U.S. Justice Department were investigating accounting irregularities at AOL further lowered the stock price. In addition, AOL began losing subscribers to competition from telecommunications and cable companies offering high-speed Internet access.
In May 2003 Case resigned as chairman of AOL Time Warner. Other executives from AOL who had assumed top positions in the merged company were replaced with Time Warner executives. In September 2003 the board of directors decided to remove AOL from the name of the company, reverting to Time Warner Inc. In March 2008 AOL ceased offering technical support for Netscape’s Navigator and urged customers to download other browsers.
ORIGINS
Company founder Stephen Case grew interested in online computer services in the early 1980s while working as an executive for Pizza Hut. In 1983 he left that company to join an online gaming service named Control Video. In 1985 Case helped reorganize the financially ailing company as Quantum Computer Services Inc. The new company launched Q-Link, an online service for users of Commodore computers. Soon Quantum expanded its service to users of other personal computers.
In 1989 Quantum launched America Online (AOL), a nationwide online service providing news and information in a user-friendly, graphical format. The company charged consumers a monthly fee based on the number of hours spent using the service. In 1991 Quantum changed its name to America Online, Inc., and Case became chief executive officer. The company embarked on an aggressive marketing effort that included mailing thousands of free computer discs to consumers so they could access the service for a free trial.
GROWTH AND DEVELOPMENT
Along with rivals CompuServe and Prodigy, America Online helped transform online computing from a domain of the technically savvy to a tool for the masses. AOL played a key role in this shift because its graphical environment appealed to a large audience. Membership grew from 500,000 in December 1993 to 1 million in August 1994. In August 1995 AOL became the world’s largest online service, with more than 3 million members.
The growing popularity of the Internet in the mid-1990s appeared to spell trouble for America Online. Numerous other companies offered users access to the Internet and World Wide Web, which offered many of the services provided by AOL. America Online responded by offering a gateway to the World Wide Web through its service. In addition, America Online signed agreements with AT&T, Inc., Microsoft Corporation, and Netscape Communications Corporation to include access to AOL in some of those companies’ key products and services. America Online also began expanding into Europe and Asia.
In December 1996 the company began offering unlimited usage for a flat monthly fee. By early 1997 membership soared to 8 million users. The unexpectedly rapid growth overwhelmed AOL’s network capacity, forcing the company to offer refunds to subscribers blocked from the service. In 1998 America Online acquired rival CompuServe’s 2.6 million subscribers from telecommunications provider WorldCom as part of a three-way deal. CompuServe’s online service became an America Online subsidiary. In return, America Online sold its high-capacity Internet network to WorldCom.
In 1999 America Online purchased Netscape, the developer of Netscape Navigator, a software tool that allows computer users to browse the Internet using a graphical user interface. Hoping to expand its electronic commerce operations, America Online also forged a strategic alliance with computer manufacturer Sun Microsystems. The company planned to combine Sun’s high-performance servers and workstations, Netscape’s browsing software, and AOL’s consumer-marketing operations.
In January 2000 America Online and entertainment giant Time Warner announced their intention to merge into one company. The $106-billion deal, completed in January 2001, marked one of the largest corporate mergers in history. The new company, AOL Time Warner, became a leader in the Internet, media, and entertainment industries. Within only two years, however, the merger came to be regarded largely as a failure. As the dot-com bubble burst in 2000 and 2001, AOL Time Warner’s stock price fell sharply. The subsequent disclosure that both the Securities and Exchange Commission (SEC) and the U.S. Justice Department were investigating accounting irregularities at AOL further lowered the stock price. In addition, AOL began losing subscribers to competition from telecommunications and cable companies offering high-speed Internet access.
In May 2003 Case resigned as chairman of AOL Time Warner. Other executives from AOL who had assumed top positions in the merged company were replaced with Time Warner executives. In September 2003 the board of directors decided to remove AOL from the name of the company, reverting to Time Warner Inc. In March 2008 AOL ceased offering technical support for Netscape’s Navigator and urged customers to download other browsers.
No comments:
Post a Comment