Dial-Up Internet Still Accounts For Most of AOL’s Profits!

Are we sure that there is no market for buggy whips? Yikes! This headline is totally crazy!

AOL’s Dial-Up Subscription Business Produces More Than All Of The Company’s Profit

“AOL just released quasi-profit numbers for each of its divisions for the first time.

As expected, AOL’s dial-up subscription business–the business that powered AOL to astounding global success in the 1990s–still accounts for the vast majority of AOL’s profits.

In fact, AOL’s subscription business generates more than all of the company’s profits, after accounting for AOL’s corporate costs.

On the one hand, this is really bad news, because AOL’s subscription business is still shrinking.

On the other hand…

This shrinking business still throws off an amazing amount of cash–about $500 million a year–that AOL can use and is using to invest in other cool businesses (content and an ad network).

And the shrinking dial-up business is shrinking at a much slower rate than it used to–because AOL is finding ways of adding other value for its subscribers.

In fact, it is not inconceivable that AOL will find ways to add enough value for its subscribers that the subscription business will soon stop shrinking and start growing again. And if that happens…. wow. AOL will have a built-in marketing engine (content and ad network) with which it can market subscriptions at very low cost. And given the profitability of this business, AOL’s profit could suddenly begin to grow very rapidly.”