Tag Archive for AOL

| June 6, 2011
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AOL Notes

AOL NotesAOL was once the leader in online service providers in the U.S.and around the world. In 1988 America Online (AOL) came alive and legendary CEO Steve Case took charge in 1991. In 1996, AOL reached 6 million subscribers and started offering a flat-rate monthly service fee of $19.95. In January of 2000, AOL decided to buy up Time Warner Inc. which was spun out again in 2009.

AOL Wasn’t Building Great Products

AOL Wasn't Building Great ProductsA report from BusinessInsider says that AOL (AOL) wants to refurbish its brand and boost its energy out west. They cite a Bloomberg BusinessWeek story, that AOL is attempting to rebuild its brand by:

* Re-painting its West Coast HQ.
* Opening a gym downstairs.
* Inviting startups to work at the office rent-free.
* Hiring 80 new engineers.
* Throwing ex-AOLers under the bus.

“AOL wasn’t building great products, and the brand was reflecting that,” says AOL West Coast boss Brad Garlinghouse. “We have to expunge the ghosts of AOL and start fresh.”

AOL To Buy GDGT? The Rumors Are Back

AOL To Buy GDGT? The Rumors Are BackThe BusinessInsider speculates now that the top two editors for AOL’s (AOL) powerhouse gadget site Engadget are headed out the door, lots of people think the next thing AOL will do is buy GDGT, the gadget-oriented social network started by Engadget alumni Peter Rojas and Ryan Block.

Through AOL Ventures, AOL already owns a piece of the startup. The buy would probably be one of those “acqui-hires” where GDGT investors are made whole and the founders get what amounts to a signing bonus. comScore tells BusinessInsider that GDGT has been fluctuating between 60,000 and 140,000 unique visitors over the past year.

An AOL/Engadget insider tells BI “that gdgt rumor comes and goes.”

Update: GDGT co-founder Peter Rojas says, “I can’t comment, either way, you know the drill.”

AOL Has Had Layoffs For 11 Straight Years

America Online (AOL) laid off around 900 people on 03 march 2011 and undoubtedly, it was brutal for those people, and for their friends at the online provider. Unfortunately, layoffs are a long-standing tradition at AOL. Chart of the Day plots the job butcher’s toll of 11 years of AOL layoffs. Sometimes the layoffs are big, sometimes they’re small, but they’re pretty much endless.

AOL Has Had Layoffs For 11 Straight Years

More Than $300 million on Distributing Free sign-up CDs

AOL Spent More Than $300 million on Distributing Free sign-up CDsAmerica Online (AOL) used to be king of the dial-up hill. At its peak, over 26.7 million households accessed the Internet via AOL, a figure that no American ISP has ever surpassed according to a report from AOL’s own DownloadSquad. That success came at a cost, though: those CDs (and floppy disks!) that arrived in your letterbox, often on a weekly basis, cost AOL over $300 million.

The data comes from Quora, a service that is fast becoming the go-to place for juicy, ‘insider’ information. Someone asked about AOL’s distribution costs, and in mere moments, both the CEO-at-the-time, Steve Case, and the former Chief Marketing Officer, Jan Brandt, had chimed in with authoritative responses. Mr. Case recalls, that in the heyday of the mid-1990s, AOL was quite content to spend $35 on obtaining a new subscriber. Brandt, responding a bit later, provided a total cost of “over $300 million,” for the distribution of the CDs. She went on to offer a shocking statistic: “At one point, 50% of the CDs produced worldwide had an AOL logo on it.” Shocking, but… sadly rather believable.

Desperate to Hook Up With HuffPost

AOL Was So Desperate to Hook Up With Huffington PostWhen America Online’s (AOL) CEO Tim Armstrong announced the $315-million acquisition of The Huffington Post he made the deal sound like a strategic add-on for the former web portal’s content business however, GigaOm says that AOL had to buy Huffington Post. GigaOm says that AOL traffic has been plummeting and losses increasing at most of its major media properties. GigaOm’s Mathew Ingram cites an Advertising Age report that unique visitors in February 2011 were down by more than 40 percent compared with the same month a year ago.

AOL has tried to reinvent itself as a content company, using the cash its Internet access business continues to produce (which I wrote about here) to buy assets like TechCrunch and video service 5Min Media, and The Huffington Post. GigaOm reports AOL has also spent $100 million on building out its Patch.com hyperlocal news operation with another $120 million this year. GigaOm’s Ingram says AOL is feverishly trying to build new businesses that can replace the ones that are disintegrating, before the cash from its legacy businesses runs out and the company collapses.

Assets like DailyFinance and PoliticsDaily were supposed to be part of the recipe for boosting traffic and advertising but that doesn’t seem to be happening. Mr. Armstrong is quoted in Paid Content that the news and finance sites were losing $20 million a year for the company and advertising revenue reportedly dropped by almost 30 percent in the latest quarter.

At The Huffington Post, meanwhile, both traffic and revenues have climbed. Mr. Ingram concludes that the HuffPost acquisition brings two things to AOL that it desperately needs: an understanding of how much social networks and social features matter to new media, and a sense of personality and brand awareness that AOL sites have failed to generate. Now all Arianna Huffington has to do is somehow graft all of that into AOL.

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Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.

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| May 18, 2011
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Tech Regulatory Capture

Tech Regulatory CaptureRegulatory capture occurs when governmental bodies created to act in the public interest instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating. Regulatory capture is a form of government failure, as it can encourage large firms to exploit the public.

Sunlight: Congress’ Revolving Door to Telecom, Cable Firms

Congress' Revolving Door to Telecom, Cable FirmsAccording to a 2010 Washington Post article, broadband providers including Comcast, Time Warner Cable, AT&T and Verizon Communications have amassed armies of former government officials to lobby against net neutrality and other regulations at the Federal Communications Commission, according to a report by the Sunlight Foundation. The nonprofit public interest organization said those firms hired 276 former government officials, including 18 former members of Congress, to fight against rules that would require them to treat all Web sites and content equally on their networks.

AT&T (T) has hired Republicans and Democrats from the US House and Senate to lobby for them including:

  • Jim Davis former Democratic congressman from Florida;
  • Trent Lott former Republican senator from Mississippi;
  • Vic Fazio former Democratic representative from California;
  • John Breaux former Republican senator from Louisiana;
  • J.C. Watts former Republican representative from Oklahoma.

Comcast (CMCSA) has also hired former politicians like:

Verizon (VZ) hired Republican representative Jack Fields from Texas.

The cable industry trade group National Cable & Telecommunications Association, hired Chip Pickering, a former Republican congressman from Mississippi.

The US Telecom Association, the Broadband Association hired Al Wynn former Democratic representative from Maryland.

Revolution LLC.

Revolution LLC.Ron Klain is General Counsel of former AOL CEO Steve Case’s Revolution LLC. Prior to joining Mr. Case’s firm Mr. Klain has extensive public service, most recently as a senior White House aide to President Obama, and Chief of Staff to Vice President Biden. He has also served as Chief of Staff or Staff Director for Vice President Al Gore, Attorney General Janet Reno, the Senate Democratic Leadership Committee, and the Senate Judiciary Committee. Mr. Klain was also Associate Counsel to President Clinton and a law clerk to Supreme Court Justice Byron White. He has served as a top debate preparation advisor to Presidents Obama and Clinton, and Democratic Presidential nominees Al Gore and John Kerry.

State Department’s Katie Stanton Moves to Twitter

State Department's Katie Stanton Moves to TwitterTwitter has captured Katie Stanton, a special adviser at the State Department and former White House staffer. She is heading to Twitter to work on international business strategy according to the Washington Post.  Ms. Stanton tweeted her move to the social information platform’s San Francisco office. The Post says Ms. Stanton will be a vice president driving Twitter’s international business strategy and operations. Ms. Stanton previously worked at Google as a product manager for the search engine’s finance application.

She joined the White House as the director of citizen participation after working on new media strategies for President Obama’s election campaign. Stanton moved to the State Department last year, working with Alec Ross, senior adviser for innovation, on how to use social media tools and technology for diplomatic goals.

Facebook Hires White House Adviser as New VP

Facebook Hires White House Adviser as New VPAppScout reported that Facebook has captured an economic adviser to President Obama to serve as its new vice president of global public policy.  Marne Levine is the special assistant to the president for economic policy and chief of staff for the National Economic Council at the White House.

“With over 70 percent of our users living outside the United States, her unique mix of government and Internet industry experience will be invaluable to help Facebook address some of the most interesting questions at the intersection of technology and public policy,” Elliot Schrage, vice president of global communications at Facebook, said in a statement.

Levine will work out of Facebook’s D.C. office where she will oversee and coördinate interactions with governments and non-governmental organizations, Facebook said. She will also help to build Facebook policy teams in Asia, the Americas, and Europe.

According to the article Ms, Levine helped launch an online peer-to-peer payment platform and helped manage its privacy and compliance issues which are probably why Facebook hired her so she can lobby her former boss on privacy and banking issues.

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Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.

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| February 7, 2011
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AOL Profits Come From Misinformed Customers

AOL Profits Come From Misinformed CustomersThe Huffington Post notes a New Yorker article (sub req) by Ken Auletta who describes how America Online (AOL)  makes its profit. The article claims that 80% of America Online’s profits come from subscribers, and 75% of those subscribers are paying AOL for something they don’t actually need.

According to Mr. Auletta AOL still gets eighty percent of its profits from subscribers, many of whom are older people who have cable or DSL service but don’t realize that they need not pay an extra $25.00 a month to get online and check their e-mail. “The dirty little secret,” a former AOL executive says, “is that seventy-five percent of the people who subscribe to AOL’s dial-up service don’t need it.”

The HuffPost says a full 60% of AOL’s profits come from mostly older misinformed customers who don’t realize that they don’t need to subscribe to AOL to get online. Although the number of subscribers has sharply decreased from thirty-five million in 2002 to just over four million today, that is still a hefty number of confused people getting nothing for their money.

In an update on the Huffington Post, it says that This post originally assumed that all of AOL’s subscribers received dial-up. According to AOL’s corporate communication office, there are various plans offered and dial-up is not included in all of them. However, AOL declined to say what percentage of subscribers did not receive dial-up.

The HuffPost points that this may not be a scam, as Business Insider mistakenly suggested earlier, but it does seem to suggest that AOL could be doing more to keep their customers informed about the service they offer. Business Insider provides a handy set of screen captures to show customers exactly how to unsubscribe.

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AOL really, they are still around?

Now that AOL has bought the Huffington Post would they carry this story?

When was the last time you used AOL?

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.

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| October 1, 2010
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Banks & Bosses Use Social Media to Assess Risk

Updated 10-22-10 – GigaOm has a post about Rapleaf here.

If you’re among the 67% of the global online population which Nielsen Online says uses social media networks to stay in touch with friends, grow their business, or just have fun then your information is for sale to banks, insurance companies, employers, and the government. Some banks are turning to social media analytics firms to enhance their credit-check procedures.

Banks are now looking at an applicant’s social media profile, behavior, and associations on sites like Facebook (FB), Twitter, and MySpace according to a recent article on the banking industry site CreditCards.com. The banker’s theory is that people run with folks who share their values and behavior. If your Facebook friends are deadbeats, the banks theorize you are a deadbeat also. These assumptions may make it harder to get a credit card or mortgage, according to CreditCards.com.

Many banks are now outsourcing their social network data mining operations to firms such as Rapleaf. Rapleaf, is a San Francisco, CA-based company that specializes in social media monitoring. According to CreditCard.com, Rapleaf compiles everything you and your network do – including status updates, “tweets,” joining online clubs, linking a Web site or posting a comment on a blog or news Web site. These firms turn the conversations into consumer profiles called social graphs. Social graphs give companies insight into behavior patterns: what you like and dislike, want and don’t want, do well and do poorly.

Banks & Bosses Use Social Media to Assess RiskIn the article, Rapleaf characterizes its social network data mining operations as “a unique way to improve customer experience by whitelisting customers based on their social circles and friend relationships.”  Since the firm uses data to “whitelist” people, it may also very easily be used to “blacklist” people and deny them a credit card or a job. “Who you hang around with has empirical implications with how you behave,” Joel Jewitt, Rapleaf’s vice president of business development told FastCompany.

“It’s a marketing trend as opposed to a credit score trend,” says Jewitt.  Despite his assurances, Rapleaf’s Web site suggests that clients “use friend networks to enhance … credit scoring” according to FastCompany. Jesse Torres, president, and CEO of Pan American Bank in Los Angeles told CreditCards.com that online information aggregators fill a need within the banking community. “They’re able to scour the social media universe. They are constantly listening and reporting back.”

The bankers are protecting their bottom line, “credit card companies have been stung very hard during this downturn, and they’re going to work that much harder to avoid extending credit…,” Ken Clark, author of The Complete Idiot’s Guide to Boosting Your Financial IQ told CreditCards.com. Rob Garcia, senior director of product strategy at The Lending Club, a peer-to-peer lender, says his firm uses multiple sources of “social information collateral” for its decision-making processes “It’s a wealth of information about a person,” says Garcia.

Not everyone in the industry is data mining social networks. “It’s difficult to make a judgment about an individual’s credit based on the people around them,” says Gregory Meyer, community relations manager for Meriwest Credit Union in San José, CA.  Meriwest only assesses credit reports and application data to make lending decisions. “[Social media] is a great way to keep up with what my 10-year-old nephew is up to, but it doesn’t have a place in the credit process.”

What you divulge can have an unintended impact. “We’ve seen this with applicants not getting jobs and employees getting fired for their Facebook and Twitter-based escapades,” financial personality Clark told CreditCards.com, “so we shouldn’t imagine this to be any different.” There are steps to take to guard your privacy. “I think it is crucial that everyone visit the privacy notices for the sites they use, read them, and change their settings to limit who can see their information,” says Clark. “For example, on Facebook, you can change your privacy settings so that only your acknowledged friends can see the majority of your information.” You can also enable “private filtering” on your browser. Do so and your activity will be entirely out of the Web profiling system.

Scott Stevenson, president, and CEO of EliminateIDTheft.com told CreditCards.com people should:

  1. Don’t accept invitations until you check the profile out first.
  2. Be acutely aware of what you write. Don’t make public anything you don’t want public.
  3. Take an annual inventory of all your social networking sites and delete people and information that can potentially damage you in the eyes of a creditor or employer.

Rapleaf offers a service to discover your online footprint and see what others might see on your social graph. Google (GOOG) offers a similar tool, the Google Privacy Dashboard. which presents an overview of the accounts and information you are connected with through Google. Take advantage of tools like these to check your own online reputation. What you don’t know can hurt you. Rapleaf’s Jewitt reminds users that, “The custodian of the information is you.”

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There is nothing illegal about social network data mining banks and firms like Rapleaf do. Facebook and the other social networks are legal commercial enterprises that openly broker user data for exactly these kinds of purposes. People freely put information on Facebook with the full knowledge that it will become permanent parts of the public Internet record. Users need to know about this kind of data mining for two reasons. First, the stakes are high. It’s about getting access to credit that might be necessary for your family or business or even getting your next job.

Second, data mining gives the lenders insights into relationships that are unknown to and often completely out of the control of the applicant. Maybe being a Facebook fan of NASCAR says something in the sum about your socioeconomic status and your creditworthiness or employability, according to some second-order derivative analysis of millions of data records.

The asymmetry in the relationship between data-driven marketers and consumers is structural and permanent. Institutions like banks (and, potentially, insurance companies, employers, and the government) will use it to gain an advantage, because that’s what they do.

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Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.

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| September 10, 2010
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Microsoft Founder Sues GOOG, FB and AAPL

Microsoft Founder Sues GOOG, FB and AAPL– Updated 12-13-10 – Physorg is reporting that a U.S. district judge tossed out the patent infringement lawsuit filed by Interval Licensing owned by Microsoft co-founder Paul Allen. The judge ruled that the suit failed to specify devices or products violating patents at issue in the case. A spokesman for Allen dismissed the ruling as a procedural matter and said that an amended complaint will be filed addressing the judge’s concern.

– Updated – Google responded to the suit by stating in court documents  “Interval’s complaint is so devoid of any facts to support its infringement contentions that it is impossible for Google to reasonably prepare a defense.” According to VON | xchange Apple agreed and called on judges to “insist upon some specificity” before proceeding.

The UK’s Guardian is reporting that eleven major Internet companies including AOL, Apple, eBay, Facebook, Google, Netflix, Office Depot, OfficeMax, Staples, Yahoo, and YouTube are being sued by Interval Licensing. The firm, lead by ex-Microsoft founder Paul Allen is suing for alleged infringement of patents that relate to e-commerce and search. A copy of the complaint is available here (PDF). Notably absent from the list are Microsoft and Amazon.com. Amazon, the Seattle e-commerce giant just moved into a new headquarters campus developed by Allen’s Vulcan Inc. Interval is seeking damages and the end of the infringement. Among the patents being contested are:

  • 6,263,507: “Browser for use in navigating a body of information, with particular  application to browsing information represented by audio data.”
  • 6,034,652 & 6,788,314 (really the same patent, involving continuations): “Attention manager for occupying the peripheral attention of a person in the vicinity of a display device.”
  • 6,757,682: “Alerting users to items of current interest”
  • TechFlash has a deeper analysis of these patents.

Microsoft founder Paul AllenGoogle and Facebook told the Guardian they will fight the accusations by Interval. “This lawsuit against some of America’s most innovative companies reflects an unfortunate trend of people trying to compete in the courtroom instead of the marketplace,” a Google spokesperson said in an emailed statement to the Guardian. “Innovation – not litigation – is the way to bring to market the kinds of products and services that benefit  millions of people around the world.” Facebook spokesperson Andrew Noyes  said: “We believe this suit is completely without merit and we will fight it vigorously.”

The Guardian reports that these claims have led to accusations by some observers that Allen, who is worth a reported $13.5bn is acting as a “patent troll” – suing active companies via patents obtained by now-defunct or inactive companies which are not actively developing technology.  However, David Postman, an Interval official, defended the lawsuit as necessary to protect its investment in innovation.”We are not asserting patents that other companies have filed, nor are we buying patents originally assigned to someone else,” he told the Guardian. “These are patents developed by and for Interval.” Allen is not a named inventor on any of the patents according to Bloomberg.

Allen co-founded Interval Research in 1992 to develop communications and computer technology. The firm was reportedly designed to be a pure research institute “done right” which would replicate Xerox PARC, but that it would actually commercialize the amazing ideas. At its largest, it employed more than 110 scientists and engineers, and filed patents covering internet search and display innovations, according to the lawsuit. Interval Research officially closed in April 2000 when its 300+ patents were taken over by Interval Licensing.

Apparently, Allen has support from another tech founder. TechDirt reports that Apple co-founder Steve Wozniak comes out in favor of “patent trolls” and patent holders suing companies who actually innovate. Woz told Bloomberg TV that patents somehow help out the small guy (Paul Allen, the 37th-richest person in the world?):

I think this lawsuit represents the idea that hey, patents, individual inventors, they don’t have the funds to go up against big companies. So he’s sorta representing some original investors. And I’m not at all against the idea of patent trolls.

The Bloomberg interviewer points out that Paul Allen is not the inventor and there’s no sign that the inventors on these patents would actually get any of the money should Allen succeed. Woz says that Allen “represents inventors.” According to TechDirt Woz seems uninformed about the patent world today. For example, the interviewer notes that dealing with patents has become a “cost of doing business” and Woz seems to think that’s a good thing:

Every tech company is very aware that patents are really the heart of our innovation and invention system and (a) that you have to have your own patent position and you gotta be aware that there might be others. And, yes, you might be infringing. It’s very awkward, because some patents are so general. It’s hard to say how they’ll be interpreted. There’s a lot of ambiguity in the system.

Apple co-founder Steve WozniakTechDirt notes the irony that in Woz’s autobiography iWoz, he talked about how much of a success Apple was without relying on patents at the beginning.

Patents on software and business processes have become a lightning rod issue for web companies. They claim that patents act as a financial drag on innovation and that the US Patent Office (USPTO) is especially poor at examining patent claims for “prior art” which would disqualify them, or that it awards patents on needlessly wide claims which mean that it is almost impossible for companies to use accepted web technologies without accidentally infringing on them.

One of the most notable was Amazon’s 1997 patent for its “1-Click” shopping system, which was, accepted and then rejected and finally passed by the USPTO in March 2010. Amazon has licensed the technology to Apple, among others. Other infamous software patent abuses include:

  • British Telecom attempted to claim a patent on the hyperlink; its claim collapsed in 2002 on the basis that the patent referred to a “central computer” – which the internet does not have.
  • SCO sued IBM, Red Hat, Novell. AutoZone and DaimlerChrysler for claimed patents rights that would cover significant parts of the free Linux operating system.

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.

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