AOL News - Fallout

David Cassel (
Thu, 31 Oct 1996 21:14:10 -0800 (PST)

AOL is demanding their content providers shrink-wrap free-trial floppy
disks into their print publications, our anonymous tipster says.  "No
disks, no contract."  Content providers are already wondering how new
pricing will affect their revenue.

And the remote staff are livid.  Guides and forum managers face the
prospect of paying for their accounts, with AOL now offering only a small
discount.  Some of them had 150-hour stockpiles of free time on AOL--which
become next-to-worthless in December--and most of them are upset.  "They
have been meeting in the masses in private areas such as The Community
Building and the ARC," one staffer told me.  And when AOL staged a
presentation to discuss their concerns, "many of them stormed out of the
Auditorium furious at AOL and the Community Leader contact." There was
angry talk of walk-outs--but "they were truly mad at themselves. I think
some of them are finally realizing that AOL is a for-profit company."

The final days of GNN stung, too.  "My last week I transferred from GNN to
AOL," another staffer wrote.  "We were told that they needed to cut GNN
support staff in half and were calling for volunteers to return to AOL.

"I looked at the situation--half the support techs, and if more then 3
callers are waiting then the queue was closed and the next callers
received a busy signal."  The handwriting on the wall was "blazing in
flashing neon".  One final irony:  "The GNN support people who thought
that working with GNN was a step up from AOL will have to return to AOL or
leave," our source noted.  "This should make the pompous ones quite

The press fall-out continued.  AOL's moves "effectively eliminated every
profit the company ever made," says Thursday's Wall Street Journal, and
"ushered in a risky pricing strategy and could cut its earnings for
quarters to come."  The 7.3% stock rise?  "Some observers said the rise
was prompted in part by short-sellers buying shares to cover their bets."
Steve Case's cable-TV analogy?  "Cable operators historically had no
competitors in their local service areas".  And while most homes had TV's,
75% don't have modem-equipped PC's.  "[N]ight and day," an analyst at
Chicago Corp. agreed.

AOL's stock closed down today--maybe because the Journal barked that if
you factor in AOL's $385 million charge, the company had "never made a
dime of profit".  But the accounting move could shore up support on Wall
Street.  One business reporter told me he expects AOL to bring in millions
of dollars next year--through another stock offering. 

Posts in are still picking over the story of the Maryland
woman who visited a small North Carolina town (pop. 14,000) to visit
Robert Glass.  Police found her out by "the Old Glass Home Place", in a
shallow grave near his mobile home.  The Baltimore Sun reported Glass had
an AOL account--investigators believe they met in a chat room--and Glass's
hearing is set for November 18. 


An ad promoting price plans on AOL's exit screen said "No need to watch
the clock!" Beneath that, it said "Your account will reflect 18 minutes of
use for this session.  This does not include time spent in free areas." 

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