You’ve Got Phone! AOL Offers VoIP


As my favorite ancient Chinese author once said, “Know thine customer as thyself.” OK, Sun Tsu really didn’t say that, he was talking about his enemy and the art of war. But if he worked in the advanced media business today, he would be scratching his head about AOL’s new VoIP (Voice over Internet Protocol) telephone offering.


Relatively cheap Internet telephone service is all the rage right now and companies like Vonage (which is a best of breed) are growing at explosive rates.  The Vonage web interface is a pleasure to deal with and the service is as flawless as your broadband connection will allow.

So why would Sun Tsu be scratching his head?  Well, self installed VoIP telephone service is a fairly advanced concept for consumers.  Firstly, you have to do the math.  Then, you have to go online and order a bunch of stuff.  Then, you have to install the hardware.  Then, you have to deactivate your existing phone service.  Then, you have to sign up for 911 service.  Then … wait, you only have one phone line in the house?  Oops … you can’t have VoIP over the same phone line as your DSL service.  What do you mean you don’t understand the technology?

AOL dialup users are about the most unsophisticated technology customers on the planet?  They are not wireheads … they’re people.  Anyone still opting for a dialup connection in 2005 is not a huge acquisition target for VoIP.  Would  you sign up for AOL to spend more than Vonage on VoIP?  Probably not.  Will existing AOL customers upgrade to AOL for Broadband so they can save on their phone bills?  If you thought that a simple upgrade to broadband was a tough consumer proposition for existing AOL customers, this offering should set the bar in a completely different level.  Perhaps the executives who thought this through should look at a different chapter in Sun Tsu, “When you surround an army, leave an outlet free. Do not press a desperate foe too hard.”  Hopefully, management will give them a way out.

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About Shelly Palmer

Shelly Palmer is the Professor of Advanced Media in Residence at Syracuse University’s S.I. Newhouse School of Public Communications and CEO of The Palmer Group, a consulting practice that helps Fortune 500 companies with technology, media and marketing. Named LinkedIn’s “Top Voice in Technology,” he covers tech and business for Good Day New York, is a regular commentator on CNN and writes a popular daily business blog. He's a bestselling author, and the creator of the popular, free online course, Generative AI for Execs. Follow @shellypalmer or visit


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