Corporate Strategy Case Study

AOL in 2006: Redefining a Global Internet Service Provider

OR

Abstract:
Despite a turnaround which has brought it out of red in 2003, America Online (AOL), the largest internet access provider has not been able to arrest the fall in subscriber base. CEO Jonathan Miller (Miller) realises that to stay relevant, and to stay in business, AOL needs to redefine its business model and change its strategy significantly. To get a piece of the revived online ad market, Miller believes AOL needs to be a Yahoo-like Internet portal. Miller reorganises AOL, starts making more content available online, and moves away from its subscription-heavy revenue base in quest of a bigger audience and more advertising dollars. AOL adopts a more customer centric approach, targeting advertisers as the target customers, and not the subscribers who give AOL80% of its revenue. AOL starts offering entertainment oriented programming where advertisers can gracefully tuck ad messages and launch new services.

Pedagogical Objectives:

• The case outlines AOL’s growth strategy, its old business model and the challenges it has been facing. It also describes the changing world of internet and its new requirements
• The case discusses AOL’s proposed business model, strategy and new initiatives.

Keywords : Internet Service Provider, relaunch, subscribers, turnaround strategy, redefining a brand, broadband, aggressive pricing, Marketing Strategies Case Study, revenue generation, online advertising market, brand advertising, pop-up advertisements