AOL's Journey: From Dial-Up To A New Brand AOL, the company that once defined the Internet, is turning 25. It has had its fair share of ups and downs: Its market value in 1999 was $222 billion, and today it's $3 billion. Still, the company -- which separated from Time Warner last year -- says it's reinventing itself as the world's largest start-up.
NPR logo

AOL's Journey: From Dial-Up To A New Brand

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
AOL's Journey: From Dial-Up To A New Brand

AOL's Journey: From Dial-Up To A New Brand

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript


The company that once defined the Internet turns 25 today. America Online started out in 1985 as a software company, and eventually became the biggest name on the Web. Tens of millions of people signed up for its dial-up Internet connection and its email service.

Today, it's struggling for revenue and relevance. NPR's Tamara Keith reports.

TAMARA KEITH: There was a time when, for most Americans, AOL was the Internet. Here's how comedian Loni Love remembers the early days of America Online.

Ms. LONI LOVE (Comedian): When we heard that little dial-up sound, that little eeeeee, and then you connected, and then you check your mail and you'd get that you got mail, you was excited. That was the thing.

KEITH: Love is known for her ability to find the humor in pop culture, on shows like VH1's "I Love the '80s," and more recently in her own Comedy Central specials. Love says AOL is close to her heart.

Ms. LOVE: We were just amazed at it. But then we didn't realize how slow it was - I mean, just the dial-up alone. And if you had a picture that you wanted to send your friends, it would take, like, two hours. You could go over to their house and see the picture, come back, and it was still downloading.

KEITH: Slow or not, AOL was a phenomenon. In December of 1999, the company was worth $222 billion. In 2001, AOL merged with Time Warner. And it's easy to forget, but AOL was in the driver's seat. It's now seen as one of the worst mergers in the history of business.

Then DSL and cable modems hit the scene in a big way, making dial-up AOL a dinosaur. Today, AOL still has about five million dial-up subscribers, and they provide a big share of the company's revenues, though it's losing subscribers fast, at a rate of 3 percent a month. To state the obvious, AOL needs a new business model, and it has one, says Alex Gounares, the company's brand-new chief technology officer.

Mr. ALEX GOUNARES (Chief Technology Officer, America Online): What AOL has become today is much broader than the dial-up business. I mean, we're a great content business. There's over 160 different content sites, everything from Engadget to Daily Finance to World of Warcraft Insider.

KEITH: That last one is a videogame fan site.

AOL separated from Time Warner last year, a shadow of its former self. The company went from 19,000 employees at its peak to about 5,000 now. But get this: Several of them are Pulitzer Prize-winning journalists and well-known sports columnists hired recently. The goal is to combine content, technology and advertising in a way that redefines the Internet.

Company CEO Tim Armstrong, who came from Google, says he's working to reshape AOL as the world's largest startup: agile, energetic, creative.

Mr. TIM ARMSTRONG (CEO, America Online): We're 25, so we're roughly just getting out of college. So we have our future career to go at AOL, and that's what we're focused on.

KEITH: But while the company focuses on its future, its present is a little rocky. AOL's first-quarter earnings report showed revenues down 23 percent from the year before.

Mr. CLAYTON MORAN (Analyst, The Benchmark Company): I think they have very strong leadership with a focused plan, and that's half the battle.

KEITH: Clayton Moran is an analyst at The Benchmark Company.

Mr. MORAN: But there's no signs in their financial or operating results that indicate this company is turning itself around yet.

KEITH: And then there's the issue of brand perception. There are a whole lot of people who, like Loni Love, still think of AOL as the dial-up company.

Ms. LOVE: Now AOL is the grandma of online Web services. I mean, we don't need it anymore. It's 25 years old. It needs some Botox or something because it's old.

KEITH: Though, to hear AOL CEO Tim Armstrong tell it, this isn't a problem. It's an opportunity. Folks at AOL point to Apple as an example: an early leader, then declared a dead brand, and now Apple rules.

AOL is hoping for its own resurrection story.

Tamara Keith, NPR News.

Copyright © 2010 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.