If I Ran AOL...

...I'd be a very happy guy. Here's what's going on in a nutshell (some more detail here). People have been signing up for broadband Internet access in droves, either cable or DSL. A few years ago, AOL had about 30 million subscribers, each paying about $20 a month for dial up access. AOL customers found themselves paying $40 a month for broadband AND $20 a month for AOL. They started asking themselves, "Why am I doing this?" and so many of them answered, "For no good reason" that AOL now has about 18 million subscribers. For a while, AOL deluded itself by thinking it was a "content" company -- that the features that came with AOL were so special that they were worth charging a premium to get. They were wrong. The content is everywhere. Now they think that they'll be an advertising company. I think I have a better idea. I'd make AOL a communications company. I'd use the Firefox browser and Thunderbird email programs (both of which AOL owned lock, stock and barrel in earlier incarnations) in conjunction with AOL Instant Messenger (AIM) and an Internet phone/videophone program to form the core of my AOL service. I'd make them look and feel like the AOL mail that my customers have come to know, but add in more extensions and customization features. I'd integrate them into a single, interoperable platform with a common address book. I would develop this as an open source software platform that anyone could develop offerings for. This base would all be free of charge, and everyone who wanted an AOL.com email address could have one -- especially any of those 12 million people who've left. For many of those 30 million subscribers, AOL was nothing more than an access company. That role is now taken by another part of TimeWarner, namely TWC, the cable business. So switch all access-related business to TWC -- including dial-up -- and charge reasonable rates for it. (For TWC's RoadRunner Internet cable subscribers, there is a travel feature that gives you dial-up access when you travel. In one of the only benefits of the AOL - TimeWarner merger, the dial up network that RoadRunner uses is the AOL network.) Next, I'd recognize that I owned a LOT of servers. I'd use them to offer a lot of value-added services for my AOL people. Personal websites, online communities, photo storage and sharing. Hey, I might even have a Warner Brothers music and movie site with downloads! I'd form partnerships with other content and service providers to tap into the AOL network. These would carry modest fees. I'd also think about developing AOL On-the-Go tablets (like the Nokia 770 Internet tablet) that offered seamless connectivity wherever I was. This could be a partnership with Nokia, or it could be an open source project that let people develop software and services around the platform. More partnership opportunities like this exist in the hardware space, as Apple has found with the iPod, iTunes Music Store, and the zillions of companies making iAccessories. These partnership opportunities would position AOL at the crossroads of all Internet trends. AOL would be access-provider agnostic, which would benefit them greatly. They'd be an enabler of countless service opportunities for start-ups and established companies alike. It would be like creating a whole new, open ecosystem for Web 2.0. And AOL would be leading it rather than being a footnote to history. What about advertising? I think advertising is a subsidy of a business rather than a business in and of itself. Most advertising is annoying and ineffective. I think that Google has done a very good job to rake in lots of money while maximizing the effectiveness and minimizing the intrusiveness of advertising. But Google is a search company, and they link the ads they serve to the content that you are looking for, dramatically improving relevance. My AOL would be a communications and services company, and (at this point), I can't see how advertising can reach Googlian levels of relevance. It would not be a key element in my business model. P.S. This link to the parent of AOL (AOL LLC) shows that they already have many of the pieces. It's just a matter of deciding what they're in business to do, and executing.