The AOL List: Ghost Ship

David Cassel (
Thu, 8 May 1997 22:51:27 -0700 (PDT)

		 	 G h o s t   S h i p


Steve Case's Community Updates have been removed from AOL's web site. 

Presumably this was to eliminate damning quotes from December of 1996. 
"When we made the decision to switch to unlimited pricing, we knew demand
would skyrocket..."  Case blithely announced.  But "we made the decision
to launch the unlimited pricing as soon as we could, which meant rolling
it out this month." 

That's not the only AOL area that appears abandoned.  "Congratulations on
going to $19.95 per month..." begins the first letter in "Steve Case's
Mail Bag"--which apparently hasn't been updated since December.  It's next
to Steve Case's Community Update--which hasn't been updated since April 7.
Maybe the service switched to auto-pilot.  "Dear aolsucks," one form
letter read. "Thanks again for your loyalty and continued support."  The
message, signed "Technical Service Representative," was sent in response
to an e-mail filled with gibberish.  "AOL SUCKS AOL SUCKS IMPROVE YOUR

"We really appreciate members support and input..." the response
continued.  "If you have any further questions or comments, please feel
free to write us again." 

And a similar response awaited readers of AOL's "AOL Insider" column. 
Though its author uses the screen name "TalkToMeg," an error message
appears in a pop-up window any time one of her readers sends her e-mail. 
The message states: "This AOL member is not accepting e-mail from you." 
(  And it's been appearing since
early April.  ("Nothing personal. I promise," the columnist writes.)  

But the glitches continued.  Though AOL's "Welcome Screen" urged users to
visit their new "Barnes and Noble" area April 20, it was inaccessible to
anyone connecting to AOL through a TCP/IP connection--and, according to
the Atlanta Journal-Constitution's Art Kramer, it was also unavailable to
Mac users--and had been since March! (
And Thursday afternoon, attempts to access any member web page received
the error message "This server is temporarily unavailable for maintenance.
Please try again later." 

But that doesn't stop AOL's public posturing.  Monday they announced that
between January and March, they'd earned profits of $2 million dollars.
Less-noticed was the fact that it was left-over from over $381 million in
revenue.  Financial experts hadn't expected any profit--but HotWired's
"Flux" column stumbled onto an AOL secret plan.  In April, "the company
recently invited some 60 of its online merchants to a special meeting on
the West Coast, and told them that in order to retain the 'privilege' of
being an AOL vendor, they would each need to fork over US $150,000
immediately." ( )

The resulting $8 million dollars would more than cover the $2 million
profit AOL reported Monday.  In addition, though AOL set aside over $10
million during the first three months of 1996 to cover their income
taxes, no such layout was made in 1997...  And more skepticism lurks on
Usenet.  "Had AOL paid its bill at the Baltimore disk factory," one poster
noted in, "its profit would have been 
$2 million - $2 million = $0 million."

AOL acknowledged that their profit came "primarily through lower marketing
expenses." One year ago the company was spending over $200 for every
member that they added.  AOL promised they'd reduce the number of busy
phone lines by cutting back on marketing--but Monday their figures showed
more than $90 million was spent between January and March--$33 million
MORE than they spent in the same three-month-period one year ago!  And AOL
still showed a net gain of just 236,000 subscribers--the lowest increase
in almost three years. Even this generated skepticism--the last line of
the Washington Post's coverage noted "The company did not release numbers
on turnover, which many analysts consider a key indicator of its financial

Spotty data also appears on AOL's web site, in its "For Investors" area. 
Accessing the "Documents and Filings" section, investors find they're out
of luck--the most-recent document is a 10Q form "For the quarterly period
ended March 31, 1996."  (  Calling
AOL's "Investor Relations" phone number is no more helpful.  The FAX-back
offers only six-month-old financial information.  And even AOL's "Full
Disclosure" had only partial information--stopping with information for
the last quarter of 1996...

In fact, AOL's public statements are being met with increasing suspicion. 
This month saw a skepticism milestone:  Mad magazine parodied Steve Case's
monthly letter.  "Do you crybabies have any idea how long it takes just to
unpack 300,000 modems?"  Sleaze Case explains to subscribers.  "Almost
half of our staff is currently in a courtroom, and the other half is doing
the TV circuit to say how much we care." ( 

"It's official.  The computer wins," reads another cartoon in the Atlanta
Journal-Constitution.  It shows an announcer under a sign reading
Computer vs. Kasparov--but the event covered wasn't a chess match.  "No
matter how hard Kasparov tried, he couldn't get on AOL..." 

But AOL continues with high-powered public relations.  In a crafty move,
immediately after an FCC announcement Wednesday, AOL issued a
one-paragraph press release to be quoted in the next day's papers.  "The
continued vitality of the Internet service industry is dependent on a
public policy objective that guarantees affordable access to all of the
benefits of the Internet to all Americans," the Steve Case statement read. 
( But just days
earlier, AOL conceded that their users spend just 20% of their time on the
internet.  "He *doesn't* speak for anyone but AOL, a company with a poor
reputation for service that casts a shadow over the business as a whole,"
one ISP worker commented.  "Customers who finally abandon AOL for ISPs
generally come with the baggage of having been mistreated..." 

But he holds out hope for the subscribers once they hook up with a true
internet provider.  "Generally, they're very grateful for good
service--once they get it."


Users often complain AOL's Terms of Service are enforced arbitrarily--but
AOL boasts that they achieve fairness with a three-strikes-and-your-out

One AOL List reader disagrees.  "The second violation of mine was when I
posted on a message board--complaining about how I was unfairly issued the
first one." 

        David Cassel
        More Information -


  Please forward with subscription information and headers.   To subscribe
  to this list, type your correct e-mail address in the form at the bottom
  of the page at -- or send e-mail to MAJORDOMO@CLOUD9.NET
  containing the phrase SUBSCRIBE AOL-LIST in the the message body.  

  To unsubscribe from the list, send a message to MAJORDOMO@CLOUD9.NET
  containing the phrase UNSUBSCRIBE AOL-LIST.