AOL just released quasi-profit numbers for each of its divisions for the first time. As expected, AOL’s dial-up subscription business–the business that powered AOL to astounding global success in the 1990s–still accounts for the vast majority of AOL’s profits. In fact, AOL’s subscription business generates more than all of the company’s profits, after accounting for AOL’s corporate costs. On the one hand, this is really bad news, because AOL’s subscription business is still shrinking. On the other hand… This shrinking business still throws off an amazing amount of cash–about $500 million a year–that AOL can use and is using to invest in other cool businesses (content and an ad network). And the shrinking dial-up business is shrinking at a much slower rate than it used to–because AOL is finding ways of adding other value for its subscribers.
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 AI strategy, implementation and governance, as well as technology, media and marketing. Named one of LinkedIn’s Top Voices in Technology, he is a bestselling author, covers tech and business for Fox 5’s Good Day New York, is a regular commentator on CNN, and writes the popular daily business blog Think About This. Follow @shellypalmer or visit shellypalmer.com.