Anti-AOL

Asking why AOL screws up nearly everything they touch is like asking why the sun shines on a clear day, but I'm a sucker for tradition, and for two years running I've done so, so why not a third? It's reasonable to expect this is the last Top 5 I'll ever do on AOL since the company is dying. With no further ado, AOL's top five blunders of 2008:

AOL purchases Bebo. Why?

In AOL's biggest "WTF?" moment of 2008, they blew a cool $850 million on Bebo, a mostly UK-based social network that only 5 million Americans visit regularly, then admitted they wasted their money on it. To put the gargantuan-ness of this mistake into perspective, imagine one billion dollars. Now imagine Facebook. Now imagine that not even Facebook, the biggest, most successful social network on Earth besides MySpace, is not worth anything near one billion dollars. It probably isn't. Subtract a measly $150 million dollars from that billion we were just kicking around, and that's what AOL paid for an overseas flea circus that word of mouth says makes the population of MySpace look upright, prudish, and filthy rich in comparison.

Further imagine that even the most successful social network cannot survive without money. That's not a fantasy - that's the truth. So far both MySpace and Facebook have proven hard to monetize. People tune out or block out the ads that support those sites, so the profit margins are at best slim. Now imagine that Bebo doesn't have anywhere near MySpace's audience or reach. Do the math on the ad reach - ain't too pretty, is it?

In the end, it looks like AOL paid $850 million to do an integration of the Bebo and AOL home pages that a small team could have whipped up in a week flat for say, $6,000. It's like NetVibes all over again - did Netvibes cost anyone $850 million? $850 million bought AOL little more than the right to brag on Bebo's home page:

"The top part of the homepage [now] allows you to receive email updates from AOL, Yahoo Mail, [and] Gmail directly to your Bebo homepage. Underneath that section, you will see a "changes" area that let's you see what is going on with your AIM, Twitter, Flickr, Del.icio.us, YouTube and, of course, your Bebo friends. On the right hand side, you will see a media recommendations area which includes all of your subscriptions and stuff we think you'll enjoy."

Wow. $850 million for a web page integrated with some of AOL's services that will gain traction with not one more person in the US than it has so far. Being a fiscally austere person, this sort of extravagance gives me fits. Do you know what AOL could do with $850 million dollars?

1. AOL could give a $212.25 refund to every person in the US who has ever used AOL, assuming 40 million total signups and maybe 20 million users who got screwed by over-billing practices at some point.
2. They could pay Google back every penny they lost taking a dumb risk on AOL as an ad and search partner - not that Google deserves to be compensated for their hard-to-explain short-sightedness.
3. They could simply hang onto it to add to their lousy bottom line. I could get more creative but I'm too tired to bother.

AOL raises dial-up rates again.

While it's not as flashy as news of AOL buying Bebo, AOL raising dial-up rates from $9.99 with tech support to $9.99 without tech support or $11.99 with tech support is the stupidest thing they did all year. No one wants dial-up anymore, so no one will use it if they can help it. Dial-up has fallen so far out of favor with the masses that they willingly pay top dollar for DSL, broadband, and even high-speed dial-up, with it's promise of near-perfect image and data compression at top speeds and a price-tag of about $17 a month. Today's websites, based heavily on Flash, AJAX, and image-rich style sheets, just don't load well at dial-up speeds.

Even AOL's dial-up users realize this, with memberships dropping from 9 million to 6.9 million year-over-year. AOL's answer to declining subscription revenue was not to keep the rate low to attract as many users as possible, but to raise it to maximize profit on the few people left who either like or must use AOL dial-up for whatever reason.

The only saving grace for AOL users is that from word-on-the-street talk, I gather most people who use AOL dial-up still pay about $23.90 a month for it. Like my sister-in-law, who hasn't used her AOL connection in years - so anyone who either signs up now or asks for the new, "lower" $11.99 rate will actually save money compared to how much AOL dial-up used to cost. What a thought!

AOL blew the Google deal.

This had to be the easiest deal Google ever made with any company: "Let us help improve your search scores and run ads against your sites in our results. In return for that, we're buying 5% of your company". How could anyone screw up a deal that sweet? Leave it to AOL to find a way. Google is taking a huge loss on the deal, writing it off to the tune of perhaps $500-750 million, nearly as much as the Bebo purchase cost AOL. Talk about fiscal irresponsibility...

AOL didn't buy Yahoo!. Yahoo! didn't buy AOL.

As I've said many times over the years, I think an AOL-Yahoo! mash-up would be match made in heaven given audiences of similar ages, income levels and interests (shopping, chat, email, social communities, etc). I can't see why this deal shouldn't be done. But leave it to the perennially indecisive Jerry Yang, Yahoo's former CEO, to sit on his hands instead of doing more than "talking to" AOL, and leave it to Yang's spiritual twin, Jeffery Bewkes, to engage in the same hand-sitting while encouraging the same fruitless "talks". What a waste of both companies combined potential - which I think would be a marvel previously unseen in this world.

AOL leaves Journals and Hometown users hanging.

The way AOL handled the closing of AOL Journals and Hometowns was a perfect disgrace - and a typical example of how AOL alienates even their most loyal customers, hurting their bottom line in the long run more than their stupidest purchases ever could. Users of these sites were given scant notice of AOL Journals and Hometowns closing down - about 30 days - and no way whatsoever to automatically download or transfer files to another site.

Feeling for them, I searched the Internet for a program that could handle the download process without users having to cut and paste perhaps thousands of posts into Word or other cumbersome Office and note-taking programs.

Joe Manna soon pitched in with more tips to help AOL users get their files, and finally, one week after AOL gave notice, they finally teamed with Google to get user's files moved to Blogger. Unsatisfied with Blogger as a new platform, many users chose to simply download and save their files instead.

After Hometown closed, People Connection, Joe's blog and my blog continued to get hit with desperate pleas from AOL users who missed the deadline. In a last-minute save, Joe O. of taimantis.com, a former Hometown user, did some research and found AOL left the Hometown files up on their FTP servers after the deadline. He contacted me and Joe Manna to tell us how to download the files, and Joe Manna and I did what we could to get the word out to AOL users. Of all of AOL's blunders, this was the most inconsiderate one of all.

Related posts: AOL's Top 5 Blunders of 2007 and AOL's Top 5 Blunders of 2006.

Updated 6-1-08.

AOL Toolbar In All New HPs (Hewlett-Packard Computers)

As many of you know, AOL will soon preload AOL Toolbars and set AOL as your default home page and search engine in every new HP computer you buy thanks to a deal they made this month with Hewlett-Packard.

Here's a general purpose tutorial on how to remove the AOL Toolbar from IE, all versions from 5.0 to the latest version out on 6-1-08, from any PC running Windows.

How to Uninstall the AOL Toolbar

1. For Win XP users:

Click your Start button and click Control Panel. In Control Panel click Add & Remove Programs, then locate the AOL Toolbar on the Add & Remove List and click Change/Remove.

For Vista and Windows 7 users: Click your Start button and click Control Panel. In Control Panel click Programs and Features, then locate the AOL Toolbar on the Installed Programs List and click Uninstall.

2. Click Uninstall.

The AOL Toolbar Uninstall Wizard will open. Click Uninstall.

3. Click Reboot now.

An Uninstall Wizard dialog box will open. Click Reboot now when you see it. You'll be unable to remove files and folders associated with the AOL Toolbar unless the computer reboots.

4. To remove the files and folders for the AOL Toolbar after you've restarted your computer...

An easy way to get rid of most of the leftovers: Click your Start button, click My Computer, click the hard drive AOL is/was located on (usually the C: drive), click on the AOL folder, right-click the AOL Toolbar folder and delete it.

5. Now click your Start button, click Search, click All files and folders, click Advanced Options, and click Search system folders and Search subfolders.

Type "toolbar" into the search box without the quotes if you don't have other toolbars installed. Type "aol toolbar" if you do. Right-click and delete any AOL toolbar components that show up in results.

!Important If you're testing AOL's Helix software don't delete anything in C:\Program Files\AOL\RC\ee. If you do, Helix will no longer work.

(Back to Top)

See my How-To section for more ways to get AOL out of your life.

If you have any questions or ideas leave a comment or email me.

AOL is in a dreadful state of affairs with Randy Falco and Ron Grant (aka "Smithers & Burns", a snarky insider reference to characters on The Simpsons) now running the show. I said last year that AOL was moving away from access into advertising, that Falco did not understand the Internet or any aspect of AOL's business, and I always thought that tiny Ron Grant, (i.e. "Falco's brain" or somesuch thing) was fairly clueless. I haven't called it wrong yet, so love me or hate me, don't say I never gave you a good (and early) warning.

Keep Dreamin'

If you want to live in some sort of Utopia where AOL always come out on top even with foolhardy, spendthrift morons running it with no clear vision or direction to take the company to the next level, then feel free to ignore me. I don't suffer fools gladly, though, so don't come crying to me when I have to turn in my last post because AOL has finally been sold off or dissolved by someone with a brain.

What led up to the layoffs is a perfect example of AOL's runaway corporate irresponsibility. If I was an employee of AOL, still employed or otherwise, I would be gasping at the wastefulness and chicanery of higher ups grasping at straws at the expense of my job. It's a perfect scandal.

At AOL We're Poised to Become AOoooogle

AOL lost in the access business, not just because their Customer Service and Tech Support are deceptive and/or unknowledgeable, nor because people are tired of their Walled Garden, nor because AOL's software-based access clogged up people's computers and failed to change with the times, but because more and more people use broadband and DSL now than ever before, leaving AOL with only 9 million subscribers as I write this. AOL does not own or lay cable or high-speed phone lines in the US, where the bulk of their access business once was.

AOL should've bought the cable lines and high-speed optic fiber that it needed a long time ago if they hoped to compete in today's high-speed world. The reason they didn't is as early as 2001 they thought there was more money in advertising. To that end, AOL has spent more money on advertising platforms and spyware-like technology to monitor ad impressions than it would have cost them to buy or build their own cable and DSL lines and keep this year's laid off folks on board with 20% raises every year for the next five years.

Here's a list of the advertising platforms and technology that could save AOL if they had any clue how to make their ideas work without sacrificing AOLer's jobs:

2005-2006

AOL Sells 5% to Google and Buys Advertising.com

• AOL claimed selling a 5% stake to Google and using Google's search engine to return results on AOL would help their sites achieve higher Page Rank and become "more visible" in Google, with Google splitting profits with AOL for ads. The catch is, if the deal doesn't work out, Google is already a 5% stakeholder, and can well afford to to buy the rest of the business in a heartbeat with all that positive cash flow and high market cap that just put a well-known anti-Google site out of business...again.
• Advertising.com, a well-known deliverer of spyware and pop-up ads for the masses until they cleaned up their act after the acquisition, barely showed up on anyone's radar once it was acquired by AOL...until 2006, when it's profits blew open with increased revenue of 46% quarter to quarter until this summer, when profits slid down an astounding 30%. Too bad AOL had gone on a manic ad platform buying spree by then...

2006

AOL Buys Lightningcast

• AOL acquired this small specialized company in May of 2006 for an undisclosed sum to insert ads into audio and video content, which makes sense in light of their purchase of Truveo, a video search engine, around the same time.

2007

AOL Buys ThirdScreenMedia

• This deal, made in May 2007, was supposed to bolster AOL's ad profits in the mobile sector, even though Third Screen, like AdTech below, caters to a mostly European audience. Rumored purchase price was around $100 million. Statistics on how well TSM does in the mobile sector don't seem available on TSM's website or through a search of their company on the Internet.

AOL Buys AdTech

• In May 2007 AOL bought AdTech, a platform that gives advertisers various campaign management and reporting tools, for an undisclosed sum. AOL had just lost out on a $900 million bid for TradeDoubler so one can imagine AdTech cost AOL a pretty penny. The deal was said to help expand AOL's reach to European audiences. Interestingly, days before AOL's purchase of a controlling interest, Adtech released a report that shows only 1 of every 1,000 ad impressions results in a sale, a dismally low .18% conversion rate. Read it and weep, unemployed AOLers.

AOL Buys Tacoda

• This plume in Randy Falco's cap, acquired for around $275 million in July of 2007, was the reason AOL executives were so self-congratulatory this year that they felt the urgent need to build an executive dining room for themselves, to remake AOL into Platform A, a moniker that is said to be a very uninspired ripoff of Avenue A (another advertising platform's name), to move to New York just to show how "serious" they are about advertsing (I haven't stopped giggling over that one yet) and to lay off as many people who were helping to grow and improve their online portals and their software as possible.
• Platform A will tie all of AOL's advertising companies together into one neat network that is supposed to make Google, which now owns DoubleClick, and Microsoft, which now owns aQuantive, and Yahoo!, which as always is tooting along with Overture, roll over and play dead from the sheer amount of powerful ad-awesomeness now emanating from their company.

Ads At the Expense of Brand Dilution

How does AOL plan to make their ad business increase their brand's reach and popularity among today's Internet audience? Falco was asked that question recently, and his thought is that people won't be familiar with or seek out the AOL brand anymore, not for email or chat or news. He thinks people will simply stumble upon AOL after they "click a link in Blogging Stocks" (a blog owned by AOL) and supposedly be wowed by AOL's design and content from there. Him and Dick Parsons now envision the future of AOL as an 'online Proctor & Gamble™', a conglomerate of brands and names as diverse as TMZ.com, AOL Video, Platform A, etc.

I don't give AOL much of a chance for reasons that are obvious to me. They've floundered for years - since their subscription numbers began dropping - and haven't come up with a clear way to save themselves yet ("...well, maybe if we bought Netscape...no, ICQ...wait, maybe if we buy Weblogs...no, maybe if we turn our Cancellation Dept. into the Retention Nazis, no...now we think offering our own AOL PC [there really was such a thing, folks, but AOL no longer offers it] will help us survive this transition...").

Maybe you laid-off folks should be grateful you got out (even if AOL had to push you out) when you did. With the brand dilution they've performed on their own sites in the last year (changing the home page to look like Yahoo's, only much worse...like I came up with the design, let's say), the online email system that is just a barebones unholy mess compare to Yahoo's, and all of the premium content being given away now on AOL for free, AOL as a portal and as a brand is over with. AOL has lost it's aura of money and exclusivity and is exposed now for what it is: just another has-been looking for ways to advertise at you any way they can.

I know AOL sucks, but would most people believe Google sucks more? (Somehow I would.) It's a fun fact from a Google Fight Site that I found along my Web travels. You can use it to pit websites against each other and see which one "wins".

Since I stumbled upon Google Fight last Wednesday Google has dropped 180,000 results for why "google sucks", while the number of results for "AOL sucks" has increased by 10,000. Google is simply expunging any negativity about themselves that they find. Give it time; the "Google sucks" results will drop to zero while the "AOL sucks" results will just keep growing.

I wonder how AOL feels about that. Google owns them, after all...or 5%, anyway. That deal certainly isn't helping AOL.

Heard the latest?

AOL now supports Open ID, drawing out their Eternal September to our eternal torment.

You can rely on AOL for over-inflated numbers, so the amount of AOL and AIM users who can log into LiveJournal (God help me) and other SixApart blogs as well as WordPress and Technorati is, according to AOL, a perfectly outrageous number...over 63 million. I tend to believe it's that many people, though...*shudders*

You may recall when AOL released a wild horde of irritating people onto Usenet, exposing sharp-minded members to an onslaught of illiterate oafs that once appeared only in their worst nightmares. AOL pulled Usenet for their members 11 years after they first allowed them to torment Netizens with their presence but the damage was done. It's the same situation again, only now it's my turn to see what's it's like, since I missed out on that early wave of Internet stupidity.

I blame AOL's chat rooms. If members hadn't invented their own language in those seething dens of misappropriated communication by willfully ignoring correct spelling and punctuation while refusing to lay off their caps lock and shift keys I wouldn't need to visit special websites just to translate their mysterious jottings back into a semi-comprehensible language.

From the start AOL hid members away in a closed-off, raucous and unsophisticated world and encouraged, even rewarded, an airbrained mentality to prove they were cool back when having AOL was a status symbol among the unwashed masses. Since 1994 they've taken AOL's carnival atmosphere all over the Web while we gnash our teeth.

More...

Just when you thought Digg couldn't get any dumber...now they're going to support OpenID, too.

Eternal September

How AOLers Ruin the Web

I haven't been pounding out updates lately but I'm too busy to write (and too tired when I'm not too busy) so I probably won't match the pace of what I kicked out during January again. For a while I thought I'd turn the site into an updated news-blog but there isn't enough going on to make it worthwhile. In fact some of the latest news just bores me to death and I can't write when I'm bored.

Take the TradeDoubler deal. It's AOL purchasing ad.com all over again, only the European version of it...who cares? The only real news here is AOL stole so much money from canceling subscribers over the years that they can't figure out how to spend all of it so they blew it on a huge Christmas party, a stupid-looking sculpture, technology for the Haier Hard Drive, and $900 million for TradeDoubler, a Bubble 2.0 deal that might or might not close by February 28th because some shareholders think TD's worth more than that. Watch me cry great big crocodile tears when AOL loses out on it. Not. BTW, the Anti-AOL Network covered the story if you really want it. I couldn't really muster up enough energy about TradeDoubler to give a damn.

In other news, the accounting fraud trial went into a second day of jury deliberations last Friday, but there's nothing on the wires about it now and it's a toss-up whether or not anyone's found guilty. I say they walk because no AOL exec has ever been put away for financial misdeeds (but at least a few of them should be, IMO). It'd be nice to see it end in an Enron sort of way, complete with Randy Falco having a heart attack over the whole thing, but I'm not holding my breath.

In the meantime I have projects going on to get back to my site's roots: consumer advocacy. No one seems to know why I have this site (except Jason Calacanis, who really gets it) so let me explain. I started writing about AOL to fulfill a promise I made to a call center supervisor 13 months ago and I don't intend to stop. I was infuriated at what I had to go through to cancel AOL, shocked at how hard it is to uninstall and outraged at their dishonest call center tactics, but I kept writing after I was tempted to delete the whole thing last January (just one month into it!) after it hit me I could explain to others why AOL is hard on your wallet, your computer, and inadequate for surfing the Web. Once that idea hit me it snowballed. I learned the hottest searches for AOL focus on how to cancel it, how to uninstall it, and how to file a complaint against AOL for over-billing, information that in all cases they keep very rare.

Update: The AOL/Purchase Pro trial ended in acquittals shortly after I wrote this article. According to an article I just read in the Washington Times, "All three defendants wept with relief." I'd cry too if I got to walk away from federal prison time for what they were accused of, plus now they get to see their charges expunged like the fraud never happened. I hate to sound bitter, (edit...no I don't) but what a crock of shit.

Updated 02-3-2007.

It's a different plot but the story has the same ending: No matter how AOL dresses it up, they can't make the donkey that their washed-up business is look a horse. The only thing that's changed is their approach. Rather than siphon money right out of your checking or credit card account for their "ISP service" (a non-Internet protocol complaint proxy server that sends their browser straight to AOL content and ads) they're betting you'll visit aol.com on your own or install their free software so you'll stay on their site clicking ads, which is how they plan on making their next fortune.

Their goal is exactly the same as it was the day they opened shop as a BBS called Q-link back in 1985: To get money away from you as quickly as they can so they can spend it on self-promotional nonsense that costs you more money in the long run. They do that by leading you by the nose to their web pages, where you click on their ad displays or those of their "partners" -- sites used by ad.com to display third-party advertising.

They never gave up their old way of doing business, either; they still sell broadband subscriptions, for example (a partnership between them and certain ISPs involves layering their horrific software over your broadband connection at reduced rates -- as low as $15.99 a month -- and if you're willing to sell your computer's soul to the software world's annointed Devil, it's a good deal).

They still sell dial-up subscriptions, too, which they claim people "need" because they have no ISPs in their areas. I have readers from Hawaii who use other ISPs and from what I understand Alaska has alternatives, too, so I want all three people in the US who must use AOL to write to me. I'm sure there can't be that many of you, so while you're at it, please move anywhere that has a zip code and find a real ISP.

In addition to their subscription services they offer a slew of "premium" services, too, so don't think they're betting the ranch on ads alone. Here's what they offer, at pretty high prices:

Premium AOL Services

• Link2PC, $6.95 a month
• Privacy Wall,$4.95 a month
• AOL Music Now, $9.95 a month
• Video@AOL, $4.95 a month
• Education@AOL (five sites with different themes), $4.95 a month each
• AOL Voicemail, $7.95 a month
• AOL Call Alert, $4.95 a month
• AOL by Phone, $4.95 a month

       (source: premiumservices.aol.com)

AOL knows better than to bet selling ads will turn a tidy profit over time so they're keeping one finger in the ISP pool in case their new plans head south faster than they would like. In anticipation of permanent changes they'll make if their ad-based revenue model ever takes off, here's what they've changed.

Recent and upcoming changes

August, 2006

They started offering free downloads of their software (which can be used for free when you sign up for a screen name) and free email addresses on aol.com.

September, 2006

They started giving away 5 GBs of free storage on recently acquired xdrive.com...but not before they ran the offer as a free trial for the first half of September and made you sign up with a credit card, and from what I've heard, they made it hard to cancel, the site is often offline or has connectivity issues, people lose their uploaded files all the time and the service sucks.

September, 2006

They started handing out you@yourdomain.com addresses on domains.aol.com. The object is to get as many domain names from members as possible to resell at a fat profit. AOL will let you host some sort of crappy, ad-riddled "blog" or "site" using the name but if you abandon your email address or website the name reverts back to it's rightful owner (AOL); they'll resell it without your knowledge or consent to whoever they want for however much they can get for it.

While they might be trying to recreate themselves in GoDaddy's image, don't think they'll resell those names cheap. Domain names are getting harder to find; certain auctions hawk names that can cost up to half a million dollars each, so there's a lot of money in it for AOL...all made on your dime, of course.

November, 2006

They began pushing OpenRide, a browser with new technology that's free with membership. It's the "advanced way" to surf AOL, check IMs and email and flip through your picture and video collections at the same time. To accomplish this dizzying feat they created Dynasizer, a big shiny blue bead in the middle of their new browser that you "pull" with your mouse, causing each pane to shrink or expand in turn.

I gave it a test drive when I did my review of AOL's uninstallers and it was horrible. First of all Dynasizer is not a web browser, it's AOL's browser. To find unique content you have to hit the built-in Google search engine or leave via address bar, which doesn't open up a new browser for you. If they were honest, they'd call it "Closed Ride." It used a lot of CPU cycles and processes on my PC, slowed it down and "gummed it up," and it's as hard to uninstall as 9.0 SE ever was.

January, 2007

They'll offer Music Now through Napster instead of their own service because they're losing money on it.

January, 2007

They'll set up shop in Second Life. Second Life is a virtual world where you move through "places" like shops, cafes, and auditoriums using "money" to buy and sell real things (including "real estate") and forge online connections you might not make elsewhere. AOL inserts themselves anywhere they think money's calling their name, so they'll start their "Second Life" off by selling premium services as hard and as fast as they can.

January, 2007

They partnered with Sony for an upcoming TV, the Bravia (featured at the CES show). The technology enables it to pipe in Video@AOL.com (also Yahoo! and Grouper videos) so you don't have to go online to watch them. Content is limited to video from those services and the TV's picture quality is said to be very poor.

January, 2007

They partnered with Haier, an obscure appliance company, to distribute a phone with SmartScreens made by their subsidiary Tegic (the phone was also featured at CES). SmartScreens technology enables it to play almost any kind of music or video file except Apple's and to store and display pictures. I don't like the phone - while I admire it's capabilities, I think the branding and presentation are all wrong.

January, 2007

They partnered with Intellext to bring "safe" search results to schools. Intellext uses contextual search to give results from over 14,000 48,000 pre-approved websites (corrected number of websites in response to a comment which incorrectly claims I didn't mention how Intellext gets results at all) as kids type "keywords" into documents. Is this a bad idea? Yes. Children are often easily distracted, and getting bombarded with results they weren't looking for might reduce their concentration more. Plus the sidebar spits up every result they need while they do homework or write a report, lending an unfair advantage to kids who aren't smart or willing to work for their grades.

The first comment also incorrectly claims that the article I link to for my Intellext info says displaying the sidebar is purely optional. That's untrue. Maybe the other article he was reading had that information, but the article I read, from Information Week, did not.

Edited 2-03-2007 and 5-19-2007.

Everyone's talking about how "AOL is in the iPod business now." AOL unveiled this hideous mp3-playing monstrosity at the CES show in LA like it was the cure for cancer. It got people murmuring about "how much AOL has changed" and "how innovative" they are and whether or not this shiny piece of crap will be "the next iPod killer," inspired ooohs and ahhs from the tech community and made Steve Job's cadre of devotees have fatal heart attacks. Time to sort out the truth from the bullshit so you can discuss the "killer player" without giving AOL credit that they don't deserve, which might make me have a fatal heart attack. Don't make me have a fatal heart attack...I'm only 35.

The Bullshit

"AOL invented this new media player!"

The Truth

No, they didn't. The media player is not AOL's invention, nor will it be sold under their name. Haier didn't make it, either, but tragically, they did make the hardware for it. If you're not familiar with Haier, don't feel bad; I'm not, either. They're an obscure Chinese appliance company that makes refrigerators, washers, driers and TVs. They don't boast of one glamorous, must-have product worth discussing.

The Bullshit

"AOL wrote software for the new iPod-thingy!"

The Truth

AOL did not write software for it. Tegic, another tiny, obscure company (a subsidiary of AOL), whose biggest claim to fame is coding software that powers text messaging for certain hand-held mobile devices, wrote it. It's called SmartScreens.

The Bullshit

"It's the iPod killer!"

The Truth

No, it's not. It's the iPhone killer. None of the i-stuff can hold a candle to this thing, which can do almost anything except watch your six year old. I'll give it credit for it's exhausting list of options, if nothing else. It's the first all-in-one BlueTooth and wi-fi enabled player that runs on open-source software, downloads streaming music and content, and handles any file type except Apple's including WMA files, AACPlus, AACPlus Enhanced, WAV, MP3, MPEG-4, WMV 7/8/9, H.264, AVI video, and JPG and PNG images (source: swik.net).

Why it will never kill the iPod or the iPhone

The Haier mp3 player is unwieldy.

At a little over one pound and roughly 4.5" by 2.48" by 0.46" it must be one pain in the ass to lug around just to listen to music and make phone calls. Why not lug my hard drive around? They look the same and it will surely get me more attention than their mp3 player, especially once I trick it out with a touch screen, audio playback and BlueTooth. Haier certainly has no size advantage over any other portable player like SanDisk, Creative, or Apple.

The Haier mp3 player is ugilicious.

Young boys and men will go wild for it because it's rugged and "manly" looking but it inspires nothing in me but disdain. Did I mention it's awfully big? That it's heavy? That the brushed stainless steel case shows every smudge and fingerprint so you'll have to wipe it down every three seconds if you have even a light case of OCD like me? That it photographs poorly because it has so much shine? That it has no sex appeal, no portability, nothing that says, "Just grab me and go?"

The Haier mp3 player uses a fairly obscure OS.

It runs off of an open-source client (Linux) which is going to turn off 99% of the market because most people use Windows or Apple, and don't even know what Linux is; end of story.

The Haier mp3 player has AOL content and "AOL software."

Although the software belongs to AOL in only the loosest of fashions, much like Time Warner, the early press made it sound like AOL owned it and it will be hard for them to undo that image now. Plus AOL all but gave it away during and after CES that the mp3 player will feature their own content, an instant turn-off for anyone who's tech savvy or even just smart enough not to touch AOL (their service is hard to cancel and their software gums up your computer, in case you haven't heard).

My final thought is no one will buy it except Linux fans who like AOL and don't mind the lack of trustworthy names behind this gimmick. As you can imagine, there will be about 3 people who fit that description. Linux users are geeks and geeks almost never use AOL, so that rules out most of the mp3 player's target audience before it's even out of the gate.

11-22-2006: Cnn.com did a bad thing in the "eyes" of search engine spiders, Google Pidgeon Rank™ and other indices of web page spamiliciousness: they duped their own content about Yahoo! acquiring AOL, then changed the date for it. I'm a bit of a prig, so before I even knew what was happening, my keyboard was tapping out comments to blogs.marketwatch.com. While I'm no fan of Google, why let a site get penalized for what they warn webmasters not to do in Webmaster Guidelines?

"...the "Quality Guidelines"...outline some of the illicit practices that may lead to a site being removed entirely from the Google index."

One practice you should avoid:

"Don't create multiple pages, sub-domains, or domains with substantially duplicate content."

Cnn.com isn't exactly a train-wreck of spam and duped pages -- yet -- but I hate to see it come to that, so I pointed out to Blogs Market Watch that the article is not "news" in the classic sense. They posted an updated story saying that I have the links to both articles (they mispelled my name, but mentioned me in the same breath as Henry Blodget, so all is forgiven). This is Fortune's original story; this is the dupe. The first URL is to their index.html copy; the second is to their monthly magazine archive. I have one question: Why did CNN change the date, the title, AND the subtitle? They might fool the search engines with those tactics, but they didn't fool me.

AOL One of the Worst Acquisitions Ever

11-22-2006: AOL made the list of ten worst Internet acquisitions ever, down there at #2. What a gnarl-up TW's grab for them was. Since acquiring AOL, TW has paid $750 million to settle a horrendous accounting fraud scandal, two states have sued AOL for deceptive cancellation policies, the FTC went after AOL for consumer complaints, and they've lost 13 million subscribers...that's just what I can reel off the top of my head. Way to blow whatever they had going for them...what was it, again?

Yahoo New Search Leader, AOL Trailing

11-22-2006: From IBM Watch, some surprising news: Yahoo beat Google for most growth in searches this quarter, while AOL holds steady at just 6% of all searches (roughly 323,000 a month) on their tacky swipe of Google's search engine.

Randy Falco Likes the Extra "Space"

11-21-2006: Randy Falco says he's "...fascinated by the Internet space," which, as we know, connects to a series of tubes that empty out into AOL's cache servers (does anyone recall their more scorned "features," like day-old content?) He continues: "It reminds me a lot about network television 30 years ago", but won't say why. You need to know he was in charge of distributing videos to TV stations at nbbc, not running a web portal, nor software development. His NBC bio lists him as in charge of "information technology," among other things, and he brings ops strength from his former role, but you'd never know by what's coming out of his mouth.

I Can Really Write

11-19-2006: All writers rip each other off, so if a big name rips me off, I take it as a compliment. In my August News, I wrote that for the first time ever, AOL was giving software and content away for free and asked readers, "Are they insane? No, they're Google -- or might be soon...)" What does David Pogue ask his readers just a few days ago? "Was AOL nuts? Should its executives be dragged away by the nice men in white coats?" Deja vu, even if it was (I'm pretty sure) unintentional.

Jon Miller Fired, so Jason Calacanis Quits

11-17-2006: What a week: Jason Calacanis quit less than a day after Jon Miller was fired/replaced by Randy Falco, former president of NBC Universal Television. Yeah, my jaw dropped. With Jason gone, my bet is AOL wakes from their self-induced coma long enough to change Netscape's landing page back to a portal, which, while cluttered and devoid of any gripping, must-see content, was better (in my eyes) than their pale rip-off of Digg's social bookmarking.

With less than 100 "'scapes" per story ("'scapes!" what a laugh) Netscape is quite the failure, and surely the reason Jason lost confidence in his abilities ("I wouldn't want to manage someone like myself" being the most telling comment of all). Well, who would? Pie in the sky dreams (like buying off Wikipedia for leaderboard space, thinking his site can compete with Digg, etc.) don't go over well at TW...and that surprises him, THIS late in the game? His flair for drama, easily seen in the tons of fights and hissy-fits all over his blog, must've made AOL aghast at his unprofessionalism.

If anyone's hoping for a breath of fresh air coming from the regime change, don't: I have no idea if Jason will be replaced by anyone I like, but Falco's Jon Miller all over again, with the same out-of-touch attitude, praise for the "fine folks" (to Miller, that's "wonderful people") slaving under him at AOL and penchant for verbal fluff that did NOT endear Jon to my heart or soul at any moment. Well, good luck, AOL; I hate kicking you while you're down.

Passe, Staid, Stale...Same Thing

11-10-2006: AOL claims portals are passe? No, they're just "staid," CEO Jon Miller told a Web 2.0 conference. At least he's honest...Miller wants to pin AOL's underwhelming Portal Renaissance on Relegance, but I say, why bother? The last thing anyone needs is a crappy toolbar hogging up precious pixels. According to relegance.com, "The FirstTrack client application sits as a toolbar-sized display at the bottom of one's screen." Say it with me now: thanks, but NO.

Lots more laughs: Jon says getting out of the ISP business and giving away software "...paid off." He forgets (or just fails to mention) most of AOL's recent ad revenue comes from advertising.com's sales, up 90% for the quarter. (They're owned by AOL, but don't advertise on AOL.com, so what does their profitability have to do with AOL's new strategy? That's right, nothing.) Then Jon calls the release of over 658,000 members' search terms "...entirely well meaning." Comedy Gold.

They Say Black, I See Red

11-02-2006: So far AOL's losing their bet that giving content away for ad revenue will pay off. Revenue's down 3% for the third quarter, at $1.91 billion. They've lost 2.5 million paid subscribers. That leaves 15.2 million people, who bring in most of their income, compared to as many as 26 million in 2003 (the year they were accused of inflating subscriptions and ad revenue).

They say ad revenue increased 46%, to $479 million, but: "Revenue at Advertising.com, a division of AOL that operates as a display ad network selling ads on a large number [of] Web sites, grew 90 percent." Not only that, AOL's trying to paint declining visits (down 6%) in a positive light: "...[it] was an improvement because they had been declining 15 percent or more." Oh, so that's why I should break out the champagne...

Advertising.com has a great quarter; AOL.com DOES NOT.

11-02-2006: For the first time in years, Time Warner has something to brag about: a 300% surge in profits fueled in small part by AOL's ad revenue. When the office parties stop, AOL faces a tough question: how will they finally make their website and software profitable? Wall Street doesn't think they can; TW shares are down 17 cents to $19.84 after the announcement.

Ad sales are up 46%, but most of that is from ad.com's sales, according to Wayne Pace, TW's CFO. Ad.com sells ad space on third party websites, but not on AOL.com, according to businessweek: "The company buys ad space from 3,000 sites and resells it to about 500 clients..." (Ahem. ad.com even settled with the FTC in 2005 for using adware, then cut ties to adware/spyware partners at AOL's request.)

Plastering AOL with Doubleclick ads won't help, with visits down 6% from last quarter, most coming for webmail.aol.com, and only 7% visiting the site itself (Alexa). So the question is, how can a "medium" sized, "extremely slow-loading" site and an infamously resource-consuming, hard-to-uninstall portal be profitable when AOL has less visitors and organic revenue than ever? Mr. Parsons, sell it to Yahoo! while it still inks any profit at all.