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Cover of 'Its a wired wired world'

It's a wired wired world

David Stauffer

Success, aol-style

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Description

AOL's success as a leading internet company, despite its late start in 1985, is remarkable. Its resilience in a competitive market is attributed to a strong business model. Key elements include a visionary leader in Steve Case, a clear and compelling vision, a passionate team, a willingness to innovate, a user-friendly product, and a customer-centric approach.

AOL's growth, with a 4000% increase in subscribers from 1993 to 1999, serves as a blueprint for success in a volatile business environment. Emulating AOL's model could potentially lead to similar success.

Table of contents

01

Aol information overview

America Online, which began as Quantum Computer Services in 1985, has been a pioneer in the online service industry. Initially, it provided games to users of Commodore computers. Steve Case, who joined the company's predecessor, Control Video Corp., as a marketing manager in 1983, witnessed the company's financial struggles firsthand. After a restructuring and refinancing, Quantum was renamed America Online Inc. in 1991.

The company's business encompasses interactive services and media, internet brand development, internet technologies, and e-commerce services. With over 22 million subscribers, AOL boasts a user base nearly ten times larger than that of its closest competitor, Microsoft's MSN. AOL's international presence spans 15 countries and is available in seven languages. The corporate headquarters is strategically located near Washington Dulles Airport in Washington D.C. As of January 2000, the company employed 12,100 people. The fiscal year 1999 was particularly successful for AOL, with revenues reaching $4.8 billion, which was more than twenty times the combined revenues of the next 20 internet companies. The company also reported a profit of $762 million for the same period.

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02

Aol historical summary

In 1985, Quantum Computer Services was established and launched Q-Link, an online service for Commodore 64 computer owners. By January 1986, Q-Link had garnered 10,000 subscribers, despite Commodore Computers facing market challenges. Two years later, Quantum partnered with Apple Computers to extend Q-Link to Macintosh users. In 1989, Q-Link was rebranded as America Online, which was still exclusive to Macintosh and offered various online services such as games, email, and chat rooms. However, that year also saw Apple and Quantum end their partnership due to a public disagreement.

By 1991, the company had changed its name to America Online and appointed James Kimsey as CEO, favoring his image over the younger Steve Case. The following year, AOL went public, raising $66 million, and Steve Case took over as CEO. Despite being third in the market behind CompuServe and Prodigy, with 200,000 subscribers and 250 employees, AOL initiated an aggressive marketing campaign, distributing over 250 million diskettes for a free trial, which skyrocketed their subscriber count to over 5 million within four years.

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03

Aol Success Strategies

Pioneering new products

Aol, a pioneer in recognizing the potential for revenue generation in cyberspace, adeptly positioned itself within the industry. This strategic foresight allowed the company to persevere through the learning curve associated with mastering this new domain. In the 1980s, well before the commercialization of the internet, steve case bet the future of his company on the concept of providing interactive electronic connections to people and information. His entrepreneurial vision was grounded in the belief that millions would share his enthusiasm for connectivity.

To realize this vision, steve case and aol took several key actions. They treated early setbacks as opportunities for growth, learning from their mistakes rather than abandoning their industry pursuits. Each error was a chance to refine their approach and adapt based on new insights. This iterative process exemplifies the notion of learning from failure on the path to success. Aol also avoided the pitfalls of complacency. When they found a successful strategy, they did not rest on their laurels. Instead, they recognized that any success could be replicated by competitors, prompting them to continuously innovate and develop new products and services. This drive ensured that aol was always repositioning itself within the market.

The company's adaptability was noteworthy. Aol's frequent changes in business strategy were often misconstrued as indecisiveness. However, these shifts were essential responses to the rapidly evolving online marketplace. Without constant adaptation, aol would have been outpaced by the dynamic nature of the internet and its competitive landscape.

Steve case, as a young graduate, expressed his belief in the transformative power of telecommunications technology in a job application cover letter to hbo. He envisioned a future where television sets would serve as multifunctional portals to information and interaction. The wall street journal in 1997 highlighted case's realization that his business was not about limiting access to scarce resources but about attracting as many users as possible to his online platform. Case's strategy was always to garner the largest online audience by any means necessary.

Reflecting on the company's direction, steve case stated that aol's strategy had been consistent for over a decade, but the execution of that strategy was always evolving. This approach underscores the importance of flexibility and responsiveness in the fast-paced world of online business.

Personalizing the brand

Aol has always operated on the principle that the technology of computers and the internet is merely a tool to facilitate meaningful human connections. To embody this ideal, aol has crafted the image of its ceo to provide a relatable personality for consumers.

In essence, the personality of steve case, the ceo, has become the inherent or default personality of aol. Consumers often respond more to this personal touch than to the appeal of the underlying technology itself.

To construct a diverse corporate personality, aol has implemented several strategies. Firstly, they have established a robust management team. Aol has appointed assistants and managers who bring to the company the qualities and strengths that steve case may personally lack. This approach ensures that any managerial weaknesses or personality idiosyncrasies do not hinder the company's continuous growth.

Secondly, aol has fostered a culture of teamwork. Steve case and his three closest deputies work together exceptionally well, creating a synergistic effect. Each team member is highly motivated and given significant flexibility in their roles, leading to better results than any of them could achieve individually. Steve case provides his management team with the freedom to do things he can't do personally and the recognition they deserve.

Thirdly, aol has cultivated a culture of ambition and enthusiasm. Despite aol's recent growth in size and influence, employees remain intensely driven to succeed. There is a passion and advocacy for the cause that permeates the entire company and is consistently communicated to customers. Everyone at aol is committed to doing whatever it takes to convince everyone of the benefits of online life. At aol, workaholics are the norm.

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