AOL


AOL is an American web portal and former online service provider based in New York City, and a brand marketed by Yahoo! Inc.
The service traces its history to an online service known as PlayNET. PlayNET licensed its software to Quantum Link, which went online in November 1985. A new IBM PC client was launched in 1988, and eventually renamed as America Online in 1989. AOL grew to become the largest online service, displacing established players like CompuServe and Prodigy. By 1995, AOL had about three million active users.
AOL was at one point the most recognized brand on the Web in the United States. AOL once provided a dial-up Internet service to millions of Americans and pioneered instant messaging and chat rooms with AOL Instant Messenger. In 1998, AOL purchased Netscape for US$4.2 billion. By 2000, AOL was providing internet service to over 20 million consumers, dominating the market of internet service providers. In 2001, at the height of its popularity, it purchased the media conglomerate Time Warner in the largest merger in US history. AOL shrank rapidly thereafter, partly due to the decline of dial-up and rise of broadband.
AOL was spun off from Time Warner in 2009, with Tim Armstrong appointed the new CEO. Under his leadership, the company invested in media brands and advertising technologies. In 2015, AOL was acquired by Verizon Communications for $4.4 billion, and was merged with Yahoo! the following year after the latter was also acquired by Verizon.
In May 2021, Verizon announced it would sell Yahoo and thus AOL to private equity firm Apollo Global Management for $5 billion, and the sale was completed at the end of August.
In October 2025, Apollo reached a $1.5 billion deal to sell AOL to the Italian conglomerate Bending Spoons.

History

1983–1991: early years

AOL began in 1983, as a short-lived venture called Control Video Corporation, founded by William von Meister. Its sole product was an online service called GameLine for the Atari 2600 video game console, after von Meister's idea of buying music on demand was rejected by Warner Bros. Subscribers bought a modem from the company for $49.95 and paid a one-time $15 setup fee. GameLine permitted subscribers to temporarily download games and keep track of high scores, at a cost of $1 per game. The telephone disconnected and the downloaded game would remain in GameLine's Master Module, playable until the user turned off the console or downloaded another game.
In January 1983, Steve Case was hired as a marketing consultant for Control Video on the recommendation of his brother, investment banker Dan Case. In May 1983, Jim Kimsey became a manufacturing consultant for Control Video, which was near bankruptcy. Kimsey was brought in by his West Point friend Frank Caufield, an investor in the company. In early 1985, von Meister left the company.
On May 24, 1985, Quantum Computer Services, an online services company, was founded by Kimsey from the remnants of Control Video, with Kimsey as chief executive officer and Marc Seriff as chief technology officer. The technical team consisted of Seriff, Tom Ralston, Ray Heinrich, Steve Trus, Ken Huntsman, Janet Hunter, Dave Brown, Craig Dykstra, Doug Coward, and Mike Ficco. In 1987, Case was promoted again to executive vice-president. Kimsey soon began to groom Case to take over the role of CEO, which he did when Kimsey retired in 1991.
Kimsey changed the company's strategy, and in 1985, launched a dedicated online service for Commodore 64 and 128 computers, originally called Quantum Link. The Quantum Link software was based on software licensed from PlayNet, Inc., which was founded in 1983 by Howard Goldberg and Dave Panzl. The service was different from other online services as it used the computing power of the Commodore 64 and the Apple II rather than just a "dumb" terminal. It passed tokens back and forth and provided a fixed-price service tailored for home users. In May 1988, Quantum and Apple launched AppleLink Personal Edition for Apple II and Macintosh computers. In August 1988, Quantum launched PC Link, a service for IBM-compatible PCs developed in a joint venture with the Tandy Corporation. After the company parted ways with Apple in October 1989, Quantum changed the service's name to America Online. Case promoted and sold AOL as the online service for people unfamiliar with computers, in contrast to CompuServe, which was well established in the technical community.
From the beginning, AOL included online games in its mix of products; many classic and casual games were included in the original PlayNet software system. The company introduced many innovative online interactive titles and games, including:
In February 1991, AOL for IBM PC compatibles running MS-DOS was launched using a GeoWorks interface; it was followed a year later by AOL for Windows 3.0. This coincided with growth in pay-based online services, like Prodigy, CompuServe, and GEnie.
During the early 1990s, the average subscription lasted for about 25 months and accounted for $350 in total revenue. Advertisements invited modem owners to "Try America Online FREE", promising free software and trial membership. AOL discontinued Q-Link and PC Link in late 1994. In September 1993, AOL added Usenet access to its features. This is commonly referred to as the "Eternal September", as Usenet's cycle of new users was previously dominated by smaller numbers of college and university freshmen gaining access in September and taking a few weeks to acclimate. This also coincided with a new "carpet bombing" marketing campaign by CMO Jan Brandt to distribute as many free trial AOL trial disks as possible through nonconventional distribution partners. At one point, 50% of the CDs produced worldwide had an AOL logo. AOL quickly surpassed GEnie, and by the mid-1990s, it passed Prodigy and CompuServe. In November 1994, AOL purchased Booklink for its web browser, to give its users web access. In 1996, AOL replaced Booklink with a browser based on Internet Explorer, reportedly in exchange for inclusion of AOL in Windows.
AOL launched services with the National Education Association, the American Federation of Teachers, National Geographic, the Smithsonian Institution, the Library of Congress, Pearson, Scholastic, ASCD, NSBA, NCTE, Discovery Networks, Turner Education Services, NPR, The Princeton Review, Stanley Kaplan, Barron's, Highlights for Kids, the US Department of Education, and many other education providers. AOL offered the first real-time homework help service, the first service by children, for children, the first online service for parents, the first online courses, the first omnibus service for teachers, the first online exhibit, the first parental controls, and many other online education firsts.
AOL purchased search engine WebCrawler in 1995, but sold it to Excite the following year; the deal made Excite the sole search and directory service on AOL. After the deal closed in March 1997, AOL launched its own branded search engine, based on Excite, called NetFind. This was renamed to AOL Search in 1999.
AOL charged its users an hourly fee until December 1996, when the company changed to a flat monthly rate of $19.95. During this time, AOL connections were flooded with users trying to connect, and many canceled their accounts due to constant busy signals. A commercial was made featuring Steve Case telling people AOL was working day and night to fix the problem. Within three years, AOL's user base grew to 10 million people. In 1995, AOL was headquartered at 8619 Westwood Center Drive in the Tysons Corner CDP in unincorporated Fairfax County, Virginia in the Washington, D.C. metropolitan area. near the Town of Vienna.
AOL was quickly running out of room in October 1996 for its network at the Fairfax County campus. In mid-1996, AOL moved to 22000 AOL Way in Dulles, unincorporated Loudoun County, Virginia to provide room for future growth. In a five-year landmark agreement with the most popular operating system, AOL was bundled with Windows software.
On March 31, 1996, the short-lived eWorld was purchased by AOL. In 1997, about half of all US homes with Internet access had it through AOL. During this time, AOL's content channels, under Jason Seiken, including News, Sports, and Entertainment, experienced their greatest growth as AOL become the dominant online service internationally with more than 34 million subscribers.
On August 07, 1996, AOL experience a total outage starting at 1:00 AM PST that would last nineteen hours and took over six million people offline.
In February 1998, AOL acquired CompuServe Interactive Services via WorldCom, which kept Compuware's networking business.
In November 1998, AOL announced it would acquire Netscape, best known for their web browser, in a major $4.2 billion deal. The deal closed on March 17, 1999. Another large acquisition in December 1999 was that of MapQuest, for $1.1 billion.

2000–2008: As AOL Time Warner

In January 2000, as new broadband technologies were being rolled out around the New York City metropolitan area and elsewhere across the United States, AOL and Time Warner announced plans to merge, forming AOL Time Warner, Inc. The terms of the deal called for AOL shareholders to own 55% of the new, combined company. The deal closed on January 11, 2001. The new company was led by executives from AOL, SBI, and Time Warner. Gerald Levin, who had served as CEO of Time Warner, was CEO of the new company. Steve Case served as chairman, J. Michael Kelly was the chief financial officer, Robert W. Pittman and Dick Parsons served as co-chief operating officers. In 2002, Jonathan Miller became CEO of AOL. The following year, AOL Time Warner dropped the "AOL" from its name. It was the largest merger in history when completed with the combined value of the companies at $360 billion. This value fell sharply, to as low as $120 billion, as markets repriced AOL's valuation as a pure internet firm more modestly when combined with the traditional media and cable business. This status did not last long, and the company's value rose again within three months. By the end of that year, the tide had turned against "pure" internet companies, with many collapsing under falling stock prices, and even the strongest companies in the field losing up to 75% of their market value. The decline continued through 2001, but even with the losses, AOL was among the internet giants that continued to outperform brick and mortar companies.
In 2004, along with the launch of AOL 9.0 Optimized, AOL also made available the option of personalized greetings which would enable the user to hear his or her name while accessing basic functions and mail alerts, or while logging in or out. In 2005, AOL broadcast the Live 8 concert live over the Internet, and thousands of users downloaded clips of the concert over the following months. In late 2005, AOL released AOL Safety & Security Center, a bundle of McAfee Antivirus, CA anti-spyware, and proprietary firewall and phishing protection software. News reports in late 2005 identified companies such as Yahoo!, Microsoft, and Google as candidates for turning AOL into a joint venture. Those plans were abandoned when it was revealed on December 20, 2005, that Google would purchase a 5% share of AOL for $1 billion.
On April 3, 2006, AOL announced that it would retire the full name America Online. The official name of the service became AOL, and the full name of the Time Warner subdivision became AOL LLC. On June 8, 2006, AOL offered a new program called AOL Active Security Monitor, a diagnostic tool to monitor and rate PC security status, and recommended additional security software from AOL or Download.com. Two months later, AOL released AOL Active Virus Shield, a free product developed by Kaspersky Lab, that did not require an AOL account, only an internet email address. The ISP side of AOL UK was bought by Carphone Warehouse in October 2006 to take advantage of its 100,000 LLU customers, making Carphone Warehouse the largest LLU provider in the UK.
In August 2006, AOL announced that it would offer email accounts and software previously available only to its paying customers, provided that users accessed AOL or AOL.com through an access method not owned by AOL. The move was designed to reduce costs associated with the "walled garden" business model by reducing usage of AOL-owned access points and shifting members with high-speed internet access from client-based usage to the more lucrative advertising provider AOL.com. The change from paid to free access was also designed to slow the rate at which members canceled their accounts and defected to Microsoft Hotmail, Yahoo! or other free email providers. The other free services included:
  • AIM
  • AOL Video, which featured professional content and allowed users to upload videos.
  • AOL Local, comprising its CityGuide, Yellow Pages and Local Search services to help users find local information like restaurants, local events, and directory listings.
  • AOL News
  • AOL My eAddress, a custom domain name for email addresses. These email accounts could be accessed in a manner similar to those of other AOL and AIM email accounts.
  • Xdrive, which allowed users to back up files over the Internet. It was acquired by AOL on August 4, 2005, and closed on December 31, 2008. It offered a free 5 GB account to anyone with an AOL screenname. Xdrive also provided remote backup services and 50 GB of storage for $9.95 per month.
Also in August, AOL informed its US customers of an increase in the price of its dial-up access to $25.90. The increase was part of an effort to migrate the service's remaining dial-up users to broadband, as the increased price was the same as that of its monthly DSL access. However, AOL subsequently began offering unlimited dial-up access for $9.95 a month.
On November 16, 2006, Randy Falco succeeded Jonathan Miller as CEO. In December 2006, AOL closed its last remaining call center in the United States, "taking the America out of America Online," according to industry pundits. Service centers based in India and the Philippines continue to provide customer support and technical assistance to subscribers.
On September 17, 2007, AOL announced the relocation of one of its corporate headquarters from Dulles, Virginia to New York City and the combination of its advertising units into a new subsidiary called Platform A. This action followed several advertising acquisitions, most notably Advertising.com, and highlighted the company's new focus on advertising-driven business models. AOL management stressed that "significant operations" would remain in Dulles, which included the company's access services and modem banks.
In October 2007, AOL announced the relocation of its other headquarters from Loudoun County, Virginia to New York City, while continuing to operate its Virginia offices. As part of the move to New York and the restructuring of responsibilities at the Dulles headquarters complex after the Reston move, Falco announced on October 15, 2007, plans to lay off 2,000 employees worldwide by the end of 2007, beginning "immediately". The result was a layoff of approximately 40% of AOL's employees. Most compensation packages associated with the October 2007 layoffs included a minimum of 120 days of severance pay, 60 of which were offered in lieu of the 60-day advance notice requirement by provisions of the 1988 federal WARN Act.
By November 2007, AOL's customer base had been reduced to 10.1 million subscribers, slightly more than the number of subscribers of Comcast and AT&T Yahoo!. According to Falco, as of December 2007, the conversion rate of accounts from paid access to free access was more than 80%.
On January 3, 2008, AOL announced the closing of its Reston, Virginia, data center, which was sold to CRG West. On February 6, Time Warner CEO Jeff Bewkes announced that Time Warner would divide AOL's internet-access and advertising businesses, with the possibility of later selling the internet-access division.
On March 13, 2008, AOL purchased the social networking site Bebo for $850 million. On July 25, AOL announced that it was shuttering Xdrive, AOL Pictures and BlueString to save on costs and focus on its core advertising business. AOL Pictures was closed on December 31. On October 31, AOL Hometown and the AOL Journal blog hosting service were eliminated.