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AOL, LLC. (formerly America Online, Inc.) is an American global Internet services and media company operated by Time Warner.
AOL is based in Dulles, Virginia. With regional branches around the world, the former American "goliath among Internet service providers" once had more than 30 million subscribers on several continents. In January 2000, AOL and Time Warner announced plans to merge. The terms of the deal negotiated called for AOL shareholders to own 55% of the new, combined company. The deal closed on January 11, 2001 after receiving regulatory approval from the FTC, the FCC and the European Union.
AOL Time Warner, as the company was then called, was led by executives from both AOL and Time Warner. Gerald Levin, who had served as CEO of Time Warner, was CEO of the new company. Steve Case served as Chairman, J. Michael Kelly (from AOL) was the Chief Financial Officer, Robert W. Pittman (from AOL) and Dick Parsons (from Time Warner) served as Co-Chief Operating Officers. The total value of AOL stock subsequently plummeted from about $226 billion to about $20 billion.
AOL is a company in transition, made evident by discussions of buy-outs and joint ventures during a period of dramatic decline in AOL's subscriber base. News reports in fall 2005 identified companies such as Yahoo!, Microsoft, and Google as candidates for turning AOL into a joint venture; those plans were apparently abandoned when it was revealed on December 20, 2005 that Google would purchase a 5% share of AOL for $1 billion.
In March 31,1997, the short lived eWorld was purchase by AOL forcing the 115,000 user to suscribe to AOL. The ISP side of AOL UK was bought by The Carphone Warehouse in October 2006 to take advantage of their 100,000 LLU's, which makes The Carphone Warehouse the biggest LLU provider in the UK, enabling them to offer broadband at no charge to 90% of their Talk3 customers.
AOL began as a short-lived venture called Quantum Computer Services (or QCS), founded by William von Meister. Its sole product was an online service called Gameline for the Atari 2600 video game console after von Meister's idea of buying music on demand was rejected by Warner Brothers. (Klein, 2003) Subscribers bought a modem from the company for $49.95 and paid a one-time $15 setup fee. Gameline permitted subscribers to temporarily download games and keep track of high scores, at a cost of approximately $1 per hour.
In 1983, the company nearly went bankrupt, and an investor in Control Video, Frank Caufield, had a friend of his, Jim Kimsey, brought in as a manufacturing consultant. That same year, Steve Case joined the company as a full-time marketing employee upon the joint recommendations of von Meister and Kimsey. Kimsey went on to become the Chief Executive Officer (CEO) of the newly renamed Quantum Computer Services in 1985, after von Meister was quietly dropped from the company.
Case himself rose quickly through the ranks; Kimsey promoted him to vice-president of marketing not long after becoming CEO, and later promoted him further to executive vice-president in 1987. Kimsey soon began to groom Case to ascend to the rank of CEO, which he did when Kimsey retired in 1991.
Kimsey changed the company's strategy, and in 1985 launched a sort of mega-BBS for Commodore 64 and 128 computers, originally called Quantum Link ("Q-Link" for short). The Quantum Link software was licensed from PlayNet, Inc. In May 1988, Quantum and Apple launched AppleLink Personal Edition for Apple II and Macintosh computers. After the two companies parted ways in October 1989, Quantum changed the service's name to America Online.In August 1988, Quantum launched PC Link, a service for IBM-compatible PCs developed in a joint venture with the Tandy Corporation.
From the beginning, AOL included online games in its mix of products; many classic and casual games were included in the original PlayNet software system. In the early years of AOL the company introduced many additional innovative online interactive titles and games, including:
Graphical chat environments Habitat (1986-1988) and Club Caribe (1988) from LucasArts,
The first online interactive fiction series QuantumLink Serial by Tracy Reed (1988),
Quantum Space, the first fully automated Play by email game (1989-1991),
The original Dungeons & Dragons title Neverwinter Nights from Stormfront Studios (1991-1997), the first Massively Multiplayer Online Role Playing Game (MMORPG) to depict the adventure with graphics instead of text (1991) and
The first chat room-based text role-playing game Black Bayou (1996-2004), a horror role-playing game from Hecklers Online and ANTAGONIST, Inc.
In February 1991 AOL for DOS was launched using a GeoWorks interface followed a year later by AOL for Windows. In October 1991, Quantum changed its name to America Online. These changes coincided with growth in pay-based BBS services, like Prodigy, CompuServe, and GEnie. AOL discontinued Q-Link and PC Link in the fall of 1994.
Case positioned AOL as the online service for people unfamiliar with computers, in particular contrast to CompuServe, which had long served the technical community. The PlayNet system that AOL licensed was the first online service to require use of proprietary software, rather than a standard terminal program; as a result it was able to offer a graphical user interface (GUI) instead of command lines, and was well ahead of the competition in emphasizing communication among members as a feature.
In particular was the Chat Room concept from PlayNet, as opposed to the previous paradigm of CB-style channels. Chat Rooms allowed a large group of people with similar interests to convene and hold conversations in real time, including:
Private rooms — created by any user. Hold up to 27 people.
Conference rooms — created with permission of AOL. Hold up to 48 people and often moderated.
Auditoriums — created with permission of AOL. Consisted of a stage and an unlimited number of rows. What happened on the stage was viewable by everybody in the auditorium but what happened within individual rows, of up to 27 people, was viewable only by the people within those rows.
There were also text games played in the chat rooms, known as AOL chatroom games.
In March 1994, AOL added access to USENET to the features it offered.
AOL quickly surpassed GEnie, and by the mid-1990s, it passed Prodigy (which for several years allowed AOL advertising) and CompuServe.
Originally, AOL charged its users an hourly fee, but in 1996 this changed and a flat rate of $19.99 a month was charged. Within three years, AOL's userbase grew to 10 million people. During this time, AOL connections would be flooded with users trying to get on, and many canceled their accounts due to constant busy signals. Also, games which used to be paid for with the hourly fee migrated in droves to the Internet.
AOL was quickly running out of room in 1996 for its network at the Vienna, VA campus and moved to Dulles, VA a short distance away. The move to the Dulles took place in 1997 and provided room for future growth.
AOL was relatively late in providing access to the open Internet. Originally, only some Internet features were accessible through a proprietary interface but eventually it became possible to run other Internet software while logged in through AOL. They were the first online service to seamlessly integrate a web browser into content.
AOL introduced the concept of Buddy Lists, leveraging their one-on-one instant messaging technology.