AOL Goes Far East

Essay by adri_barcaUniversity, Bachelor's April 2005

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Quantum computer service was founded the 24th of May 1985, in United States and was originally providing an online service, the "Q-Link" for one of the first computer: "The Commodore". In October 1989, AOL service launched for Macintosh and Apple II and in 1991 Quantum Computer services adopted a new name: America Online, Inc. Since then they managed to acquire other smaller online business such as ISQ or CompuServe. After four years of service in 1993, AOL was up to 500,000 members providing access to the internet, and offered access to its own online information and services which were aimed at the average American consumer.

In 1999, year of the case, AOL service (one of their product) surpassed 20 million members other 9 countries and that was just at the beginning of the phenomenon of Internet. On their home market in 1999, AOL had 21,5% of the market share, but at the same time, on their new Japanese market where 33%of the population had a computer, they only had 3% of the market share.

In 1997, year of the establishment of AOL in Japan, this country was the second most powerful economy in the world, with a GDP per capita of $28600. One reason of this poor market share might have been that American Online add entered this market a bit too late, at a time when Niftyserve, BigGlobe, DTI and other Japanese companies had already been in place for few years. An other fact is that in 1997 Japan was in a period of recession and consummation had slow down, compared to the year 1996.

These facts and events are not the only cause of this poor 3% of the market share and bad decisions could be seen as an other cause. Was it a good choice to...