Archive - Imperfect Now

The AOL Box

A little less than 10 years ago, America Online helped inaugurate the internet age when it went from an hourly pay plan to a flat monthly rate. AOL’s stock skyrocketed and millions of Americans came online. It was amazing.

AOL benefited also by helping first time internet users get comfortable with the world wide web. Many users would have been lost without the “AOL Keyword” and some probably didn’t even know there were sites not affiliated with a keyword. In either case, the two strongest attributes AOL had for it went away. Wide availability for dial up users and an easy interface first time users could quickly learn have since been mitigated by broadband access and much more knowledgeable computer users.

We’ll admit it, we’re a stock holder. And we’ve seen our AOL stock plummet as people abandon the dial up giant. How many CD’s can they really mail to one house before they realize people are done with dial-up?

The merge with Time Warner was also supposed to make available media content to distribute over the internet. The only problem is, AOL users on dialup couldn’t download fast enough. AOL for Broadband was seen by the guys at corporate as a solution, but it’s more a Band-Aid. Customers were expected to find broadband internet from one vender and than pay AOL on top of that for the familiar interface and software. The big problem for AOL was many more people feel confident in using the internet alone and don’t need AOL as a crutch.

We have a solution: AOL Box. Wal-Mart a few years ago started selling a computer for very little money loaded with Linux software. The idea behind it was that people buying the computer weren’t looking for something fancy to play Doom 3, but were really just looking for email, word processing, and maybe the occasional websurfing.

Computer hardware has come down in price so significantly that putting together a halfway decent computer is cheap enough anyone could do it. One of the biggest costs though is still Microsoft’s software from Windows to MS-Word.

Meanwhile, there are still a good number of people in America who don’t really want or need a full computer with all the bells and whistles. Many people are intimidated by computer technology, and many can’t afford it.

The AOL Box would act as portal onto the internet for homes that don’t really need a computer but want access to the internet. It would be a fully self contained access point to the internet and email, simple to use and problem free. AOL would include the cost of the box in the price of high speed internet, much like Ma Bell once provided phones to customers. Because users don’t need to a buy a computer, the initial cost for the consumer would be much lower.

The AOL box would have software designed specifically for the tasks based in Linux. This means that virus infections common to Windows and Internet Explorer would not affect the computer. The users would also not be able to cause problems by deleting critical files as they would on a PC. In essence, the box would be hassle free for the user and for the provider.

Since the box would use proprietary software and limit what the user could do with the hardware, AOL could then rent movies from the Time Warner database over the high speed internet connection without fear that the user would be able to pirate the movie via a P2P—after all, the AOL Box wouldn’t even let them download P2P software.

Likewise, AOL could cut deals with MP3 merchants to sell only their brand MP3’s to AOL box users. Or Digital camera makers could do the same, ensuring only a specific kind of digital camera and photo printer would operate with the AOL Box.

Essentially, the AOL Box would put the AOL brand in millions of households, allow AOL to control hardware and software addons, and provide a dedicated market for AOL subscription services.

Such a product could really only be pulled off by existing media giants. Microsoft might be able to do the same in a few years, but it would not benefit them because they make money by selling Windows for computers. Google or Yahoo! could both provide similar services, but while the technological expertise would be available to create such a product at these firms, they would neither have the experience selling broadband subscriptions nor would they have the media library to draw from to provide original content.

Indeed, AOL Time Warner is really the only company to be in a position to produce such a product. But the same mammoth size that would allow them to proceed with such a product also prevents them from innovatively attacking problems. We don’t ever expect to see the AOL Box, not because we don’t believe middle America wouldn’t eat it up, but because we don’t AOL has the vision or capacity to produce it.