AOL Inc.

276px AOL logo featuring Eraser canvas.
Type	Public
Traded as	NYSE: AOL
Industry	Internet Telecommunication Media
Founded	1983 as Control Video Corporation 1991 as America Online, Vienna, Virginia (Tysons Corner), U.S.[1] 2006 as AOL
Headquarters	New York City, U.S.
Area served	Worldwide
Key people	Tim Armstrong (Chairman and CEO)
Revenue	US$ 2.417 billion (2010)[2]
Operating income	US$ -983 million (2010)[2]
Net income	US$ -783 million (2010)[2]
Total assets	US$ 2.962 billion (2010)[2]
Total equity	US$ 2.287 billion (2010)[2]
Employees	5,860 (2010)[2]
Website	AOL.com AOL.com Corporate site AOL Blog AOL Corporate Communications on Twitter AOL on Twitter AOL on Facebook

AOL Inc. (NYSE: AOL, previously known as America Online, written as "AOL" and stylized as "Aol." but commonly pronounced as an initialism) is an American global Internet services and media company.^[3][4] AOL is headquartered at 770 Broadway in New York.^[5][6] Founded in 1983 as Control Video Corporation, it has franchised its services to companies in several nations around the world or set up international versions of its services.^[7] AOL is headquartered in New York City, but has many offices throughout cities in North America, such as Atlanta, Baltimore, Beverly Hills, Boston, Chicago, Detroit, Dulles, Mountain View, Orlando, San Francisco, and Toronto. London and Tokyo are its foreign offices. As of December 2011, it serves 3.3 million paid subscribers.^{[citation needed]}

AOL is best known for its online software suite, also called AOL, that allowed customers to access the world's largest "walled garden" online community and eventually reach out to the Internet as a whole. At its prime, AOL's membership was over 30 million members worldwide,^[8] most of whom accessed the AOL service through the AOL software suite. The company has claimed that it had 34 million subscribers at its peak, although an undisclosed portion were using free hours.^[9]

In 2000 AOL and Time Warner merged under the name AOL Time Warner. The merger was not fruitful and on May 28, 2009, Time Warner announced that it would spin off AOL into a separate public company. The spinoff occurred on December 9, 2009,^[10] ending the eight-year relationship between the two companies.^[11]

History[link]

Major milestones[link]

With regional branches around the world, the former American "goliath among Internet service providers"^[8] once had more than 30 million subscribers^[8] on several continents. It ranked fourth (behind the Web, email, and graphic user interfaces) in a 2007 USA TODAY retrospective on the 25 events that shaped the first 25 years of the Internet^[12] and was named to the ".com 25" by a panel of Silicon Valley influencers on the occasion of the same anniversary.^[13]

In January 2000, AOL and Time Warner announced plans to merge, forming AOL Time Warner, Inc. The terms of the deal called for AOL shareholders to own 55% of the new, combined company. The deal closed on January 11, 2001. The new company was led by executives from AOL, SBI, and Time Warner. Gerald Levin, who had served as CEO of Time Warner, was CEO of the new company. Steve Case served as Chairman, J. Michael Kelly (from AOL) was the Chief Financial Officer, Robert W. Pittman (from AOL) and Dick Parsons (from Time Warner) served as Co-Chief Operating Officers.

AOL stock went from $226 billion in 2001 to about $20 billion in 2006.^[14]

As of June 2010, AOL's subscriber base dropped to 4.4 million.^[15]

An AOL subscription was rated the "Worst Tech Product of All Time" by PC World in 2006 who stated that it had the "stigma of being the online service for people who don't know any better".^[16] AOL was rated both one of the best and worst Internet suppliers in the UK, according to a poll by BBC Watchdog.^[17]

AOL ceased to be a part of Time Warner on December 9, 2009. The company declared an IPO on that day, under the stock symbol NYSE:AOL.^[18]

In February 2011, AOL purchased The Huffington Post for $315 million.^[19] Shortly after the acquisition was announced, Huffingtonpost.com co-founder Arianna Huffington assumed the role of President and Editor-in-Chief of The AOL Huffington Post Media group. Huffington replaced David Eun.^[20] She oversees the development of all editorial content from both companies including news, technology, music and local media websites.

1980s[link]

AOL began as a short-lived venture called Control Video Corporation (or CVC), founded by Bill von Meister. Its sole product was an online service called GameLine for the Atari 2600 video game console after von Meister's idea of buying music on demand was rejected by Warner Brothers.^[21] Subscribers bought a modem from the company for 49.95 USD and paid a one-time 15 USD setup fee. GameLine permitted subscribers to temporarily download games and keep track of high scores, at a cost of 1 USD per game. The telephone disconnected and the downloaded game would remain in GameLine's Master Module and playable until the user turned off the console or downloaded another game.

The original technical team was composed of Marc Seriff, Tom Ralston, Ken Huntsman, Janet Hunter, Dave Brown, Steve Trus, Ray Heinrich, Craig Dykstra, and Doug Coward.

In January 1983, Steve Case was hired as a marketing consultant for Control Video on the recommendation of his brother, investment banker Dan Case. In May 1983, Jim Kimsey became a manufacturing consultant for Control Video, which was near bankruptcy. Kimsey was brought in by his West Point friend Frank Caufield, an investor in the company.^[21] Von Meister quietly left the company in early 1985. Control Video was reorganized as Quantum Computer Services, Inc. on May 24, 1985, with Kimsey as Chief Executive Officer and Marc Seriff as Chief Technology Officer. Out of 100 employees from Control Video, only 10 remained in the new company.^[21] Case himself rose quickly through the ranks; Kimsey promoted him to vice-president of marketing not long after becoming CEO, and later promoted him further to executive vice-president in 1987. Kimsey soon began to groom Case to ascend to the rank of CEO, which he did when Kimsey retired in 1991.

Kimsey changed the company's strategy, and in 1985 launched a dedicated online service for Commodore 64 and 128 computers, originally called Quantum Link ("Q-Link" for short). The Quantum Link software was based on software licensed from PlayNet, Inc, (founded in 1983 by Howard Goldberg and Dave Panzl). In May 1988, Quantum and Apple launched AppleLink Personal Edition for Apple II and Macintosh computers. In August 1988, Quantum launched PC Link, a service for IBM-compatible PCs developed in a joint venture with the Tandy Corporation. After the company parted ways with Apple in October 1989, Quantum changed the service's name to America Online.^[22][23]

Steve Case positioned AOL as the online service for people unfamiliar with computers, in particular contrast to CompuServe, which had long served the technical community. The PlayNet system that AOL licensed was the first online service to require use of proprietary software, rather than a standard terminal program; as a result it was able to offer a graphical user interface (GUI) instead of command lines, and was well ahead of the competition in emphasizing communication among members as a feature.^{[citation needed]}

From the beginning, AOL included online games in its mix of products; many classic and casual games were included in the original PlayNet software system. In the early years of AOL the company introduced many innovative online interactive titles and games, including:

• Graphical chat environments Habitat (1986–1988) and Club Caribe (1988) from LucasArts.
• The first online interactive fiction series QuantumLink Serial by Tracy Reed (1988).
• Quantum Space, the first fully automated Play by email game (1989–1991).

1990s[link]

In February 1991 AOL for DOS was launched using a GeoWorks interface followed a year later by AOL for Windows. This coincided with growth in pay-based online services, like Prodigy, CompuServe, and GEnie. 1991 also saw the introduction of an original Dungeons & Dragons title called Neverwinter Nights from Stormfront Studios; it was the first Massively Multiplayer Online Role Playing Game (MMORPG) to depict the adventure with graphics instead of text.

AOL discontinued Q-Link and PC Link in the fall of 1994. In September 1993, AOL added USENET access to its features.^[24] This is commonly referred to as the "Eternal September". AOL quickly surpassed GEnie, and by the mid-1990s, it passed Prodigy (which for several years allowed AOL advertising) and CompuServe.

In particular was the Chat Room concept from PlayNet, as opposed to the previous paradigm of CB-style channels. Chat Rooms allowed a large group of people with similar interests to convene and hold conversations in real time, including:

• Private rooms – created by any user. Hold up to 23 people.
• Conference rooms – created with permission of AOL. Hold up to 48 people and often moderated.
• Auditoriums – created with permission of AOL. Consisted of a stage and an unlimited number of rows. What happened on the stage was viewable by everybody in the auditorium but what happened within individual rows, of up to 27 people, was viewable only by the people within those rows.^{[citation needed]}

Between 1990–94,^{[citation needed]} AOL launched services with the National Education Association, the American Federation of Teachers, National Geographic, the Smithsonian Institution, the Library of Congress, Pearson, Scholastic, ASCD, NSBA, NCTE, Discovery Networks, Turner Education Services (CNN Newsroom), National Public Radio, The Princeton Review, Stanley Kaplan, Barron's, Highlights for Kids, the US Department of Education, and many other education providers. AOL's offered the first real-time homework help service (the Teacher Pager—1990; prior to this, AOL provided homework help bulletin boards), the first service by kids, for kids (Kids Only Online, 1991), the first online service for parents (the Parents Information Network, 1991), the first online courses (1988), the first omnibus service for teachers (the Teachers' Information Network, 1990), the first online exhibit (Library of Congress, 1991), the first parental controls, and many other online education firsts.

The first chat room-based text role-playing game, Black Bayou. was introduced by AOL in 1996.

Originally, AOL charged its users an hourly fee, but in October 1996 this changed to a flat monthly rate of $19.95. During this time, AOL connections would be flooded with users trying to get on, and many canceled their accounts due to constant busy signals. A commercial featuring Steve Case telling people AOL was working day and night to fix the problem was made. Within three years, AOL's userbase grew to 10 million people. In 1995 AOL was headquartered at 8619 Westwood Center Drive in the Tysons Corner CDP in unincorporated Fairfax County, Virginia,^[25][26] near the Town of Vienna.^[27]

AOL was quickly running out of room in October 1996 for its network at the Fairfax County campus. In 1996,^{[citation needed]} AOL moved to 22000 AOL Way in Dulles, unincorporated Loudoun County, Virginia.^[28] The move to Dulles took place in mid-1996 and provided room for future growth. In a five year landmark agreement with the most popular operating system, AOL was bundled with Windows software.^{[citation needed]}

On March 31, 1997, the short-lived eWorld was purchased by AOL.

2000s[link]

In January 2000, AOL and Time Warner announced plans to merge. The terms of the deal called for AOL shareholders to own 55% of the new, combined company. The deal closed on January 11, 2001 after receiving regulatory approval from the FTC, the FCC, and the EU's COMP.^{[citation needed]}

In 2004, along with the launch of AOL 9.0 Optimized, AOL also made available the option of personalized greetings which would enable the user to hear his or her name while accessing basic functions and mail alerts, or while logging in or out.

In 2005, AOL broadcast the Live 8 concert live over the Internet, and thousands of users downloaded clips of the concert over the following months.^{[citation needed]} In late 2005, AOL released AOL Safety & Security Center,^{[citation needed]} a bundle of McAfee anti-virus, CA anti-spyware, and proprietary firewall and phishing protection software. News reports in late 2005 identified companies such as Yahoo!, Microsoft, and Google as candidates for turning AOL into a joint venture;^[29] those plans were apparently abandoned when it was revealed on December 20, 2005 that Google would purchase a 5% share of AOL for $1 billion.

On April 3, 2006, AOL announced that it was retiring the full name "America Online"; the official name of the service became "AOL", and the full name of the TimeWarner subdivision became "AOL, LLC".^[30]

On June 8, 2006,^[31] AOL offered a new program called AOL Active Security Monitor. This is a diagnostic tool to check the local PC's security status, and recommends additional security software from AOL or Download.com. The program rated the computer on a variety of different areas of security and general computer health. Two months later,^[32] AOL released AOL Active Virus Shield. This software was developed by Kaspersky Lab. Active Virus Shield software was free and did not require an AOL account, only an internet email address. The ISP side of AOL UK was bought by The Carphone Warehouse in October 2006 to take advantage of their 100,000 LLU customers which made The Carphone Warehouse the biggest LLU provider in the UK.^[33]

On August 2006, AOL announced that they would give away email accounts and software previously available only to its paying customers provided the customer accessed AOL or AOL.com through a non-AOL-owned access method (otherwise known as "third party transit", "bring your own access", or "BYOA"). The move was designed to reduce costs associated with the "Walled Garden" business model by reducing usage of AOL-owned access points and shifting members with high-speed internet access from client-based usage to the more lucrative advertising provider, AOL.com. ^[34]The change from paid to free was also designed to slow the rate of members canceling their accounts and defecting to Microsoft Hotmail, Yahoo!, or other free email providers. The other free services included:^[35]

• AIM (AOL Instant Messenger)
• AOL Video^[36] featured professional content and allowed users to upload videos as well.
• AOL Local, comprising its CityGuide,^[37] Yellow Pages^[38] and Local Search^[39] services to help users find local information like restaurants, local events, and directory listings.
• AOL News
• AOL My eAddress, a custom domain name for email addresses. These email accounts could be accessed in a manner similar to other AOL and AIM email accounts.
• Xdrive was a service offered by AOL which allowed users to back up their files over the Internet.^[40] It was closed on January 12, 2009.^[41]

According to AOL CEO Randy Falco, as of December 2007, the conversion rate of accounts from paid access to free access was over 80%.^[42]. Later in August 2006, AOL informed its American customers that it would be increasing the price of its dial-up access to US$25.90. The increase was part of an effort to migrate the service's remaining dial-up users to broadband, as the increased price was the same price they had been charging for monthly DSL access.^[43] However, AOL has since started offering their services for $9.95 a month for unlimited dial-up access.^[44]

On September 17, 2007, AOL announced that it was moving one of its corporate headquarters from Dulles, Virginia to New York City^[45] and combining its various advertising units into a new subsidiary called Platform A. This action followed several advertising acquisitions, most notably Advertising.com, and highlighted the company's new focus on advertising-driven business models. AOL management stressed that "significant operations" will remain in Dulles, which included the company's access services and modem banks.

In October 2007, AOL announced that it would move one of its other headquarters from Loudoun County, Virginia to New York City; it would continue to operate its Virginia offices.^[6] As part of the impending move to New York and the restructuring of responsibilities at the Dulles headquarters complex after the Reston move, AOL CEO Randy Falco announced on October 15, 2007 plans to lay off 2000 employees worldwide by the end of 2007, beginning "immediately".^[46]. The end result was a near 40% layoff across the board at AOL.

By November 2007, its customer base had been reduced to 10.1 million subscribers,^[47] just narrowly ahead of Comcast and AT&T Yahoo!.

On January 3, 2008, AOL announcing the closing one of its three Northern Virginia data centers, Reston Technology Center, and sold it to CRG West.^[48]

On February 6, 2008, Time Warner CEO Jeff Bewkes announced that Time Warner would split AOL's internet access and advertising businesses into two, with the possibility of later selling the internet access division.^[49]

On March 13, 2008, AOL purchased the social networking site Bebo for $850m (£417m).^[50] On July 25, 2008 AOL announced it was shedding Xdrive, AOL Pictures, and BlueString to save on costs and focus on its core advertising business.^[51] AOL Pictures was terminated on December 31, 2008. On October 31, 2008, AOL Hometown (a web hosting service for the websites of AOL customers) and the AOL Journal blog hosting service were eliminated,^[52] after first announcing the impending shutdown on September 30, 2008^[53]

On March 12, 2009, Tim Armstrong, formerly with Google, was named Chairman and CEO of AOL.^[54]

On May 28, 2009, Time Warner announced that it would spin AOL off as an independent company once Google's shares ceased at the end of the fiscal year, and AOL's page and logo changed afterward.^[55]

On June 11, 2009, AOL announced the acquisition of Patch Media, a community-specific news and information that focuses on individual towns and communities. ^[56]

On November 23, 2009, AOL unveiled a sneak preview of a new brand identity which has the a wordmark Aol logo superimposed onto canvases created by commissioned artists. The new identity, designed by Wolff Olins,^[57] was enacted onto all of AOL's services on December 10, 2009.

The New AOL[link]

On December 10, 2009, AOL traded independently for the first time since the Time Warner merger on the NYSE under the symbol AOL. ^[58]

On April 6, 2010, AOL announced that they were planning to shut down or sell Bebo. This has been successfully concluded but with a huge loss on investment.^[59] On June 16, 2010, AOL sold Bebo to Criterion Capital Partners for an undisclosed amount, believed to be around $10 million. ^[60]

On September 28, 2010, at the San Francisco TechCrunch Disrupt Conference, AOL signed an agreement to acquire TechCrunch to further its overall strategy of providing premier online content.^[61][62]

In December 2010, AIM eliminated access to AOL chat rooms noting a marked decline of patronage in recent months. ^[63] On December 12, 2010, AOL acquired about.me, a personal profile/identity platform, 4 days after public launch. ^[64]

On January 31, 2011, AOL announced the acquisition of European video distribution network, goviral. ^[65] On February 7, 2011, AOL bought The Huffington Post for $315 million.^[66]

On March 10, 2011, AOL announced it will cut around 900 workers in the wake of the Huffington Post deal.^[67]

On September 14, 2011, AOL formed a strategic ad selling partnership with two of its largest competitors, Yahoo and Microsoft.^[68]

On March 15, 2012, AOL announced the acquisition of Hipster, a mobile photo sharing app for an undisclosed amount. ^[69]

On April 9, 2012, AOL announced a deal to sell 800 patents to Microsoft for $1.056 billion. The deal includes a "perpetual" license for AOL to use these patents. ^[70]

On April 24, 2012 the company launched the AOL On network, a single web site for its video output.^[71]

Controversies[link]

This section has multiple issues. Please help improve it or discuss these issues on the talk page. Its Criticism section may compromise the article's neutral point of view of the subject. Tagged since September 2009. It may be unbalanced towards certain viewpoints. Tagged since September 2009.

Community leaders[link]

Prior to mid-2005, AOL used online volunteers called Community Leaders, or CLs, to monitor chatrooms, message boards, and libraries. AOL's use of remote volunteers dated back to the establishment of its Quantum Link service in 1985. Some community leaders were recruited for content design and maintenance using a proprietary language and interface called RAINMAN, although most content maintenance was performed by partner and internal employees.

Two former community leaders, Brian Williams of Dallas and Kelly Hallissey of New York filed a class action lawsuit against AOL citing violations of U.S. labor laws in its use of community leaders. The lawsuit was filed in the United States Federal Courthouse, New York City on May 25, 1999 which subsequently was followed by the dismissal of all community leaders under the age of 18 years old as well as a reorganization of the community leader program as a whole. The Department of Labor was also investigating AOL's alleged labor law violations, but came to no conclusion closing their investigation in 2001.^[72] AOL began drastically reducing the responsibilities and privileges of its volunteers in 2000. The program was eventually ended on June 8, 2005. Current Community Leaders at the time were offered 12 months of credit on their accounts in thanks for their service.

Within one decade of the class action lawsuit being filed, the class had grown to over 6,000 members citing the largest class action lawsuit ever filed against an internet based company. Currently it is the third largest class ever involved in any lawsuit on a federal level in the United States, affecting ultimately the employment eligibility of individuals in an online environment.

In February 2010, a settlement was approved by the Courts in the class action suit. The settlement included a $15 million USD payment. This payment was then divided by one third, the first of which was attorney and legal fees. Five Million was then divided among the included members of the class which consisted of more than 7,000 individual former Community Leaders. The final five million dollars was donated to charities hand picked by Hallissey and Williams then approved by the Courts for distribution. One such charity, The Remote Area Medical Foundation (www.ramusa.org), received payments in excess of $1.2 million USD for the provision of medical services, supplies and medication for those in need within the more rural areas of the United States and beyond.

Prior to the 1999 class action lawsuit, the community leaders were informed of a change in compensation for duties performed by AOL. Community leaders would be charged a reduced rate per month for their accounts and no longer would be given unlimited access without invoice. During this live announcement via an online meeting of all community leaders in a virtual arena, Brian Williams of Dallas led many community leaders in a virtual "strike" or "sit-in" to protest the new charges the community leaders were being asked to now pay. This protest or strike is noted as the first of its kind for an online environment and was nicknamed for the row of the arena it was held in; Row 800. Following the protest, AOL terminated the online working relationship between itself and several of the Community Leaders involved. Quickly following the release of these community leaders was the reinstatement of each one terminated with exception to Williams, which AOL was not willing to review due to the role he played within the cause of the protest. During this time, Williams role on AOL was that of Guide XNT (Guide Program), CB Naked (Crystal Ball forum), VnV Naked (iVillage's Vices and Virtues Forum) and JCommBrian (Jewish Community Online Forum).

Billing disputes[link]

AOL has faced a number of lawsuits over claims that it has been slow to stop billing customers after their accounts have been canceled, either by the company or the user. In addition, AOL changed its method of calculating used minutes in response to a class action lawsuit. Previously, AOL would add 15 seconds to the time a user was connected to the service and round up to the next whole minute (thus, a person who used the service for 11 minutes and 46 seconds would be charged for 13 minutes). AOL claimed this was to account for sign on/sign off time, but because this practice was not made known to its customers, the plaintiffs won (some also pointed out that signing on and off did not always take 15 seconds, especially when connecting via another ISP). AOL disclosed its connection-time calculation methods to all of its customers and credited them with extra free hours. In addition, the AOL software would notify the user of exactly how long they were connected and how many minutes they were being charged.

AOL was sued by the Ohio Attorney General in October 2003 for improper billing practices. The case was settled on June 8, 2005. AOL agreed to resolve any consumer complaints filed with the Ohio AG's office. In December 2006, AOL agreed to provide restitution to Florida consumers to settle the case filed against them by the Florida Attorney General.^[73]

Account cancellation[link]

Many customers complained that AOL personnel ignored their demands to cancel service and stop billing. In response to approximately 300 consumer complaints, the New York Attorney General's office began an inquiry of AOL's customer service policies.^{[citation needed]} The investigation revealed that the company had an elaborate scheme for rewarding employees who purported to retain or "save" subscribers who had called to cancel their Internet service. In many instances, such retention was done against subscribers' wishes, or without their consent. Under the scheme, consumer service personnel received bonuses worth tens of thousands of dollars if they could successfully dissuade or "save" half of the people who called to cancel service.^{[citation needed]} For several years, AOL had instituted minimum retention or "save" percentages, which consumer representatives were expected to meet. These bonuses, and the minimum "save" rates accompanying them, had the effect of employees not honoring cancellations, or otherwise making cancellation unduly difficult for consumers.

On August 24, 2005, America Online agreed to pay $1.25 million to the state of New York and reformed its customer service procedures. Under the agreement, AOL would no longer require its customer service representatives to meet a minimum quota for customer retention in order to receive a bonus.^[74] However the agreement only covered people in the state of New York.^[9]

On June 13, 2006, Vincent Ferrari documented his account cancellation phone call in a blog post,^[75] stating he had switched to broadband years earlier. In the recorded phone call, the AOL representative refused to cancel the account unless the 30-year-old Ferrari explained why AOL hours were still being recorded on it. Ferrari insisted that AOL software was not even installed on the computer. When Ferrari demanded that the account be canceled regardless, the AOL representative asked to speak with Ferrari's father, for whom the account had been set up. The conversation was aired on CNBC. When CNBC reporters tried to have an account on AOL cancelled, they were hung up on immediately and it ultimately took more than 45 minutes to cancel the account.^[76]

On July 19, 2006, AOL's entire retention manual was released on the Internet.^[77] On August 3, 2006, Time Warner announced that the company would be dissolving AOL's retention centers due to its profits hinging on $1 billion in cost cuts. The company estimated that it would lose more than six million subscribers over the following year.^[78]

Direct marketing of disks[link]

Prior to 2006, AOL was infamous for the unsolicited mass direct mail of CD-ROMs and 3½" floppy disks containing their software. They were the most frequent user of this marketing tactic, and received criticism for the environmental cost of the campaign.^[79] According to PC World, in the 1990s "you couldn't open a magazine (PC World included) or your mailbox without an AOL disk falling out of it".^[9]

The mass distribution of these disks was seen as wasteful by the public and led to protest groups. One such was No More AOL CDs, a web-based effort by two IT workers^[80] to collect one million disks with the intent to return the disks to AOL.^[81] The website was started in August 2001, and an estimated 410,176 CDs were collected by August 2007 when the project was shut down.^[81] AOL CDs were recognized as No.1 on PCWorld's top ten list of most annoying tech products.^[82]