AOL is one of the oldest IT corporations in the US. The best days of the company are far behind, but it is still widely known among Americans as an Internet provider and owner of various media resources.
The history of AOL has more than three decades. During this time, the corporation has gone through a dramatic journey from a communications giant that swallowed up other companies to a dubious asset that wanders from one owner to another. As of 2021, AOL is owned by investment firm Apollo.
The foundation and success of AOL
AOL was founded by Bill von Meister back in 1983 under the name Control Video Corporation. The company was working on a service that allowed video games to be downloaded to the Atari 2600 console via a phone cable.
But within the first year it became clear that the business was doomed. 90% of the team left the company. As a result, one of the remaining employees, Steve Case, took over Control Video Corporation and relaunched it as Quantum Computer Services.
The company's new product was an online bulletin board for Commodore 64 home computers. Case soon managed to attract over 100,000 users.
In 1985, Quantum Computer Services launched a gaming service again, this time for the Commodore 64 and 128. The project was named Q-Link. Three years later, the company launched the pre-Internet networks PC-Link for PCs and AppleLink for Apple computers.
In 1989, Quantum Computer Services changed its name to America Online, and in 1991 released services under this brand for accessing its networks through DOS and Windows computers. Two years later, the company introduced its e-mail service.
In 1996, America Online offered users a monthly subscription to connect to the Internet via dial-up. The modern online era has arrived. Two years later, the company announced the purchase of Netscape Navigator, the most popular web browser at the time.
By 2000, America Online had become America's largest ISP, valued at $125 billion. A year later, it merged with another US telecommunications giant, Time Warner.
Reasons for the decline of AOL
Executives were looking for 33 percent growth over the next year after the Time Warner purchase. But as it turned out, this deal was the provider's biggest mistake.
First, America Online found itself in debt just before the economic crisis known as the dot-com bubble. Secondly, the dial-up technology that executives had bet on began to lose relevance against the backdrop of the spread of fast broadband networks. In addition, the corporate cultures of America Online and Time Warner did not mesh well with each other.
As a result, in 2001 America Online's value dropped from $226 billion to $20 billion. The company was reshuffled, the post of CEO passed to Jonathan Miller.
In 2006, America Online shortened the name to AOL. But the business continued to stagnate, 40% of the employees had to be fired. The company unsuccessfully sought a way out of the crisis: first Randy Falco took the place of the head, and after him Tim Armstrong from Google. In subsequent years, the company bought various web resources, including the Bebo social site, as well as The Huffington Post and TechCrunch.
In 2009, Time Warner announced it was splitting from AOL and continuing to operate as a standalone company.
In 2013, AOL still managed to achieve financial growth for the first time in eight years. According to The Wall Street Journal, this was due to an increase in income from online advertising. Encouraged by this success, the company soon bought the video advertising service Adapt.tv.
In 2015, telecommunications company Verizon announced it was acquiring AOL for $4.4 billion. Analysts say the deal went through primarily because of the massive amounts of data AOL has amassed about its audience. With the help of these resources, Verizon planned to earn on targeted advertising.
But in the years that followed, it became clear that Verizon's advertising business was having a hard time competing with giants like Google and Facebook. As a result, in 2021, AOL, including the portal of the same name, was resold to Apollo, which invests in advertising technologies.
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