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More Hot Air from AOL?

September 9, 2004

One of our moles recently had a business development conversation with AOL and the message was clear: AOL wants to beef up its premium services. In and of itself, there’s no revelation here – AOL has been discussing this idea for some time. Talk is cheap, but our mole says AOL has created new headcount for this division and is looking to make hires soon and get to work.
aol.bmp
All talk, no action…
We’ll believe it when we see it. AOL has become a poster child for strategic lethargy. By contrast, Yahoo’s Terry Semel told anyone who would listen that his goal when he took over Yahoo was to derive an increasing portion of his company’s revenues from premium services – and then he went out and did it. In the second quarter of ’04, Yahoo broke $100 million in what it calls “fees revenue,” which includes its premium services. That’s still only 1/8th of quarterly revenues, but it’s a good start.
If AOL wants to regain its former glory, the company should not be bashful about copying Yahoo.
Read: AOL to Charge More for Premium Services – [Microsoft Watch]
Read: Yahoo Second Quarter 2004 Financial Results – [Yahoo.com]

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