Among the many online innovations that AOL pioneered was the annoying advertising pop-up. It used them to market a bevy of third-party products and services to subscribers, such as long-distance phone service from a company called Tel-Save. Just to add insult to irritation, opting out of the pop-ups carried an expiration date--unless you reaffirmed your decision, AOL would begin bombarding you with pop-ups again.
It took until 2002 before the company came to a realization that its subscribers had reached long before: "The most important thing we offer advertisers is the chance to be part of a service consumers love, and we've determined that pop-ups aren't the best way to do that," said AOL chairman Jon Miller as he announced that it was ending the practice. Funny--just about any AOL subscriber could have told the company that years earlier.
Pop-ups weren't the only way AOL hawked third-party products to its subscribers. In 1997, it was forced to rethink plans to let marketing partners call subscribers at home, though it still reserved the right to do so itself.
Chat Dirty to Me
For a company that rose to fame in part on the strength of a family-friendly image, AOL had a thriving seamy side--especially in its chat rooms. In 1996, one researcher said that almost half of user-created AOL chat rooms were sexual in nature. And even if you simply went to a chat room to talk about your stamp collection, you ran the risk of your screen name being scraped by a spammer looking to pelt your inbox with porn. Chat areas gained a reputation for being popular with pedophiles looking for underage victims; Dateline NBC's "To Catch a Predator" series eventually cranked out hours of tawdry TV by using decoys in chat rooms on AOL and elsewhere to ensnare men looking for underage sex partners.
To be fair, sleazy chat rooms and porn spam were hardly unique to AOL. But they were particularly at odds with AOL's wholesome reputation. Even today, the most popular rooms at what is now called AIM Chat tend to be a little creepy.
The Neutering of Netscape
Even if you're the world's biggest ISP, $4.2 billion isn't chump change. That's what AOL paid in 1998 to acquire Netscape Communications, whose eponymous browser remains the single most important piece of software in the history of the Web. But what did AOL do with its new toy? Almost nothing--it didn't even dump Microsoft's Internet Explorer as the default AOL browser. Netscape slipped into not-so-benign neglect and ever-declining usage, culminating in AOL's formal abandonment of it in 2007.
The one thing that went right for Netscape during its AOL years stemmed from a decision that Netscape Communications made in January 1998, when it was still independent: It released the browser's code as open source. It took years, but the move eventually led to Blake Ross and Dave Hyatt's creation of Firefox. The two youthful programmers managed to accomplish what the billion-dollar AOL couldn't or wouldn't do: Reignite browser competition and put Microsoft on the defensive.
Between its own AOL Instant Messenger service (launched in 1997) and instant-messaging pioneer ICQ (which it acquired in 1998), AOL took an early lead in IM. And then it spent years preventing its users from chatting with the outside world, by blocking attempts by Microsoft, Tribal Voice, Trillian, Odigo, and others to establish interconnectivity between AIM and other IM services. At one poiint, it claimed to be considering permitting interoperability with other networks---and then it went back to its old proprietary ways. All along, it said that it was being stubborn over security concerns, but critics suspected that it had more to do with making sure that it IM users remained a captive audience.
The hubbub eventually died down, in that AOL eventually struck a deal with Apple to let iChat users sign into AIM accounts and no longer actively blocks Trillian, Meebo, and other IM applications from accessing its network. But even in 2009, IM interoperability remains the exception, not the rule.
"This is the classic one plus one equals three," said AOL president Bob Pittman in January 2000. He was speaking of the company's audacious $146 billion takeover of Time Warner, the biggest corporate merger ever. Pittman's math turned out to be woefully overoptimistic: When the merger was approved a year later, it turned out to be bad news for everybody involved.
Eight years later, it's still hard to identify ways in which AOL Time Warner fulfilled Steve Case's vision of building "a company that helps to take the Internet to the next level--connecting, informing, and entertaining people around the world as never before, and benefiting consumers in valuable new ways."
Within two years of the merger, both Case and Time Warner chief Jerry Levin had stepped down, and it was clear the company was failing to keep its Internet access business relevant in the broadband era. In 2003, AOL suffered the ultimate corporate insult: Its name was removed from the combined company's moniker, leaving it as plain old Time Warner; today, just about everybody believes that the company is getting ready to undo the merger by spinning off AOL.