Steve Safran
September 13th, 2006
Scott Yinger, SVP Corporate Development and Finance, AOL
Market conditions that led to the AOL change to the ad-supported model (dial-up still costs, but AOL is free to broadband users):
Advertising is becoming the leading source of sustainable monetization on the consumer web
Rapid audience fragmentation impacted large web networks
Emergence of user-driven distribution channels like RSS, other social networking tools
Broadband usage: close to 90% of online households will have broadband by 2009
While the top four networks are getting a smaller share of the traffic, their share of internet advertising and search revenue is going up. Right now, the top four - Google, Yahoo, MSN and AOL - get 55% of the online ad revenue.
They knew their access business could not grow, but the advertising business is booming
64% of users are non-subscribers now, but subs account for 80% of pageviews
2/3 of subscriber base has belonged to AOL for more than 2 years
AOL has the #1 instant messenging and #2 email product
Has developed ability to deliver broadband experiences, i.e. Live8, TMZ.com, In2TV
The transition will reduce operating expenses by over $1 billion by the end of 2007
13 Comments Add your own
1. Currants » AOL is F&hellip | September 14th, 2006 at 4:56 pm
[...] We talked about this in class, but I thought I would share it with everyone about the free aol!! I also found a link to why. I love all the advertisements on tv. I can’t remember all of them but I’ll be watching a show and I’ll hear, “If you join this internet company, we will give you free AOL, ” then Insight comes on a commercial or so later, “If you join Insight, you will also get AOL free!” I laugh every time. Everyone now wants to claim AOL as their free gift to you! Just so you don’t get sucked into their ploy I’ll tell you the truth, AOL is FREE!! Liked It? Share It! Clicking on the icons below will help other people learn about this storyThese icons link to social bookmarking sites where readers can share and discover new web pages. [...]
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