Dear Joe,
How nice that you are sitting in an idyllic New England town, away from the deadening lighting of a typical office. One of my favorite writers, the Washington Post’s Henry Allen, noted once that modern offices were “different in the ways that make no difference and the same in the ways that do.” As I sit here under fluorescent lights in the Wall Street Journal’s San Francisco bureau–no view even of the bay!--I am wishing for any Amtrak train.
I did indeed write my last posting late at night, but remember I am three hours behind you. So 2:30 a.m. is pretty respectable for a workaholic. Before you decry the faster lifestyle of us all, I will add that I have been a night owl since I was a wee lass and this is nothing different. On the topic of these blurred times, I just read an interesting review of James Gleick’s new book, Faster, in New York magazine. The review was not a good one, but I was heartened to hear that the author–an early Web pundit and entrepreneur–was arguing that humans have liked speed since the beginning of time. I often wonder if I can keep up the pace I have set for my life, but I have to admit, I kind of like it.
Which is probably why I am such an optimist about this Internet phenom and you are more circumspect. I caught the bug early from covering the early days of AOL for the Washington Post and it has never left me. I wish I could tell you the feeling I got when I first met with the AOL team in their less-than-impressive offices behind a car dealership in Vienna, Virginia. The feeling of speed and change and something different was palpable. So was the feeling of imminent crisis, of being on the edge of disaster constantly. This was a group of people that had been born into near-bankruptcy and lived its formative years in a near-constant state of chaos.
That’s why I often discount all the stories that predict AOL’s downfall. It has almost been comical at times, but they have endured everything from lack of funding to questionable accounting to technological glitches to attacks from some of the biggest companies out there. All of these challenges, it was widely predicted each time, were going to surely put AOL out of business. They’re still standing, as far as I can tell.
So, the free access trend seems to me to be another assault at the gates of Steve Case that will probably not kill them. In fact, I would go as far as to say that Steve will take the problem and turn it into an advantage. I think although subscriber fees now represent the lion’s share of revenues for AOL, that they will eventually make the service free and make money off the giant audience via advertising and commerce fees. I remember a long time ago that Steve said this would happen and I think the only question is if the company can finesse a soft landing that Netscape did not. When you note that AOL will not give away free what it used to charge for, I would point out that it used to make a lot of money from hourly charges (some users spent hundreds of dollars on the service a month) and it managed to wean itself away from that model quickly.
One executive at AOL once told me that being a fast follower is the best position to be in and that AOL tends to move to whatever trend seems to be taking over. They moved from an Apple to Windows audience in their early days without a blink; they moved from a gated service to one where the Web was nearly co-opted into AOL; they went from hourly to unlimited without a look back–this is a company that is not tethered to anything except that which works. So if free Internet access is the plat du jour, you can be sure the brainiacs at AOL are noodling this one right now. I know of few other companies that can change as quickly, and it has always been AOL’s greatest strength.
Like Andy Serwer–also an old friend from graduate school, where he also dated my roommate–I think free Internet access makes a lot of sense. As you surely know from our stellar stories in the WSJ, Microsoft has been making a lot of noises in this direction of late and those strategies are clearly aimed at AOL. But in the match-up between AOL and Microsoft–at least in the online space–the giant from Redmond has proved time and again to be the decidedly weaker player.
And, this brings me to your last query, the nature of the AOL execs. In my book, I dubbed the executives there–most of whom are the same ones from the company’s earliest days–“the cockroaches of cyberspace.” I think that says a lot. This is a resilient and deeply cynical team, who has been around the block more times than I can count. They are like a giant dysfunctional family that looks like it is going to blow apart at any moment–this always tricks rivals–who then go into the back room and come out as one solid force.
That is due, in large part, to the personality of Steve Case, who is indeed a smart and clever guy and someone I would not often bet against. This is a man who was told on a daily basis that he was an idiot and he kept going anyway. His hard shell, in fact, was one of the problems I had when writing my book. How do you make a main character of a cipher? I think the most important thing you can say about Steve is that he does not care what anyone thinks of him.
Which brings us to the colorful David Colburn. He is simply AOL’s bad boy, and it has worked thus far for them. He apparently often tells the joke that he had better make his money at AOL, because after he leaves, no one will ever hire him because he has been so obnoxious for so long. You might imagine I loved covering him.
Cheers,
Kara
