AOL was a pioneer in online communities, content creation and stickiness. As one of the highest of the high flying companies in the first wave of the popularization of the Internet, AOL built a business model and stuck to it…six years too long.
A shrinking customer base for dial up and the rapid evolution of new models online resulted in a long string of declining quarters and the consensus among pundits that AOL was dead, they just didn’t know it yet.
Earlier this year, AOL decided to abandon the captive access subscriber model and offer non-POP services for free. Sara Kehaulani Goo reports in the Washington Post on Saturday that this strategy is beginning to work.
Numbers released this week showed that in the third quarter, AOL lost 2.5 million Internet access subscribers but held on to 2 million of them as customers of its free service. Executives said they were surprised to see an additional 1 million sign up for free e-mail or download AOL’s software.
The really fascinating part of this story is that AOL has 60 million pages that have never been included in any of the major search engines.
For so long, AOL’s pages were not indexed by Web crawlers, such as those owned by Google Inc. and Yahoo, because they were in a closed network accessible to only paid subscribers. With search as a major driver of Web traffic, AOL has a long way to go to get noticed by Internet users and has been busy tagging its content for indexing by search engines. “We’re 15 percent of where we want to be” in terms of AOL’s presence in search-engine results, AOL chief executive Jonathan Miller said.
It may be 10 years late, but AOL has learned about Search Engine Optimization. That’s why their advertising revenue is up 46 percent from the same quarter last year. Assuming that the content they have already 15% of content they have optimized includes 60% of their best stuff, AOL should still see ad revenue double by time they finish making the rest of their captive content optimized for search.
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