AOL: Rudderless in the Broadband Sea

Joseph Laszlo | July 06, 2006, 10:20 AM

Let's review AOL's broadband strategies over the past 6 years or so, shall we?

-Premium broadband: AOL bought wholesale DSL from telcos, sold to customers at $10+ premiums over going rates for broadband.

-TW: AOL merged with Time Warner, AOL logically to supplant or at the very least coexist with Road Runner on TW cable systems. Strategy outside TW systems up in the air.

-BYOA: AOL abandoned the premium broadband model, looking to sell a package of premium services (e-mail, content, etc.) for a monthly fee while consumers get broadband from elsewhere.

-Ad-supported services: AOL morphed into a pure media play, abandoning subscription-based efforts in favor of courting a large online broadband audience.

-Competitively priced broadband: Earlier this year, AOL returned to providing broadband access, striking deals with the telcos and some cable operators to offer services priced fairly competitively with going rates.

-Back to ad-supported services: Today comes word via the WSJ that AOL may already be thinking about abandoning broadband access yet again, offering everything on an ad-supported basis.

I can't criticize AOL for realizing it's made a mistake and changing course as a result, and clearly some of its early strategies just didn't work for customers. But I hope AOL realizes that flipping back and forth between ads and access as its broadband business model will only confuse and alienate consumers, which is never a good strategy for retaining them.