AOL new old strategy leaves analysts unconvinced
According to this New York Times story (registration required) even Mary Meeker is unconvinced that the new plan outlined by the AOL management this week will do much to reignite growth, and that it may mean that AOL will have to drop its prices to reach the growing broadband market of which it has a very small share:
She wrote that management outlined the right plan — improve service, move customers to higher-speed broadband connections and create new revenue opportunities. But the plan, she said, was two years too late, and AOL may be so far behind that it may not catch up.
"We can't recall seeing a business in a dynamic/competitive consumer-oriented technology-related market with so much opportunity and such a powerful customer base and business model cede so much relative ground over a two-plus-year period and recover to sustainable growth," she wrote in a note to clients.
One sign of how far AOL is behind, Ms. Meeker said, was that in the third quarter the service added only a net 129,000 customers. That was fewer than the 269,000 subscribers added by MSN from Microsoft or the 141,000 added by the discount-price United Online, which operates Juno.