AOL, with its huge user base, has a track record of developing innovative new services to keep users loyal. That should have put the company at the forefront of the Web 2.0 wave that gave birth to sites such as FaceBook. But AOL, like other “old line” dot-coms Yahoo and Microsoft, proved too slow on the uptake, as firms with bigger visions and faster feet cherry-picked hot properties and left them standing on the sidelines.
AOL hurt itself, too, with news reports of horror stories from customers who tried to cancel accounts, and a “badware” label for AOL 9.0. By the time The New York Times’ triangulated Thelma Arnold, a 62-year-old widow from Lilburn, Ga., from the search record of AOL user No. 4417749, it was merely putting a face on AOL’s already eroding relationship with its expansive user base.
By year’s end, firms such as AOL and Yahoo were taking bolder steps to right their listing vessels: AOL dropped its subscription-services model and a quarter of its workforce, including CEO Jonathan Miller.
Yahoo also shook up its boardroom, amid disappointing earnings and signs of discontent from senior management.
Shortly before he lost his job, CEO Miller had observed in a keynote speech that “the big companies will stay big companies” as the Internet evolves. Going into 2007, AOL isn’t alone among big companies that are praying that adage rings true.
-- Jason Snyder