The AOL List: Paper Tigers

David Cassel (
Mon, 2 Dec 1996 20:04:02 -0800 (PST)

			 P a p e r   T i g e r s


"AOL is starting to crack already," one member told me.  Like the reporter
for Newsbytes, he'd received the "System unavailable" message today--well
before AOL's peak usage period.  An AOL spokesperson told Newsbytes the
service had already experienced several slowdowns, acknowledging that AOL
"understands that there may be some delays". 

"Our operations team has been working night and day to gear up for the
demand," Steve Case wrote in his latest letter to subscribers.  Though
hoping to eliminate "bumps in the road," Case conceded "there is a good
chance that you will experience problems from time to time."  In an
attempt to address this, Case tells members "you can keep up with the
latest on AOL's traffic patterns through a new area we've created called
AOL Insider." 

Unfortunately, the first edition of AOL Insider was held up because its
author couldn't sign-on to the system.  Their column also announced, "we
too were stuck watching the lovely but unwelcome hourglass on our screens
while attempting to retrieve email."  Among their suggestions was "Avoid
email for the time being."  (Even "Steve Case's Mail Bag" is empty,
promising responses to users' letter will appear "soon".)

AOL has had capacity problems in the past.  In 1993 and 1994 subscribers
often couldn't access the system; in 1995 AOL experienced e-mail delays of
up to 96 hours, and there was a three-hour outage in early 1996.  Several
less-spectacular outages occurred throughout the year, including a
45-minute shutdown in September--and the same week AOL's GNN lost mail
delivery for 3 days.  

A recent press release boasts that AOL "has reduced regular maintenance under 1% of running time"--but this spins the fact that AOL
periodically shuts its system down late at night.  One technology
correspondent I spoke with noted AOL is the only major service that shuts
their entire system for maintenance.  CompuServe, Prodigy, and Netcom (for
instance) have "distributed" networks, which can be serviced in parts
(while traffic is re-routed).  AOL's lack of a back-up system became
apparent during their 19-hour outage in August.  (Ironically, technicians
could've fixed it early that morning had they been looking in the right

But outages aren't AOL's only problem.  Monday's Washington Post reported
that "if you sign up and don't read the fine print, you may be in for a
surprise when your next credit card statement arrives."  Though users
could request a start date of December 1 for new pricing, the default was
the day of the month in which accounts were first created--anywhere from
the 1st to the 31st.  ("As attuned to its customers as AOL can be, the
company often seems to go out of its way to alienate them," writes the
Post's Victoria Shannon in the same edition.)

One AOL content provider told me that though Sunday was the first day of
unlimited access, his area had already seen a dramatic increase in hours
the week before.  The signs are everywhere--clicking on the "People
Connection" icon Sunday took us to Lobby 249.  (And at least one command
received the message "Please try again later".)

Despite a capacity crunch, AOL continues their marketing blitz.  Sunday's
editions of the San Francisco Chronicle-Examiner and the Sacramento Bee
came wrapped in a white, yellow, blue, and red bags trumpeting AOL's 3.0
software.  One college student received a disk with a recently-purchased
bicycle helmet--and one of the paper's subscribers told me she'd even
dreamed about the floppy disks.  ("Different kinds, different colors,
different offers, hours, deals...")

In fact, watching TV Friday, I counted six AOL ads in just over an hour. 
They're AOL's push for potential subscribers who will purchase computers
this Christmas.  But it may not materialize--the L.A. Times reports the
growth rate for PC sales has fallen as much as 66% (adding that "the
industry may be near a saturation rate.") "Online Services Know Time Is
Up" reads the headline on a Knight-Ridder column.  A recent Bloomberg
article called AOL "the faltering online service."  And flat-rate pricing
can only hurt their cash-flow. ("[T]he standard $19.95 monthly fee can be
reduced to as little as $14.95 when you sign up for a two-year
subscription," Steve Case notes helpfully.)

HotWired's Flux went as far as to say AOL may be ripe for acquisition--
this time naming Disney as the potential white knight.  Citing AOL
insiders, they added that AOL's new President would score points for his
previous employment at Six Flags amusement parks. 

Again...  Time will tell.


The plastic bags shipped with Sunday's newspapers included brochures
stating AOL was the 1995 Winner of the "Parents' Choice Seal of Approval". 

The outside of the bag said "WARNING:  TO AVOID DANGER OF SUFFOCATION,

        David Cassel
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