Case Study on AOL and the future of the ISP INdustry

Essay by lordguhaUniversity, Master'sA-, April 2004

download word file, 10 pages 4.2


The Internet and globalisation have redefined the way business gets done by erasing traditional boundaries of time, distance and geography to create new virtual communities of customers and suppliers, with new demands for products and services. The internet has transformed businesses and industries of the 21st century just like what electricity had done for the industrial revolution in the 20th century (Schwartz, 2000, pp68). E-Business is about business harnessing the power of the internet to create sustainable new business models to drive new opportunities (Gurley, 2000, pp82). Thus, e-business not only changes the way business gets done, but also constantly changes its own models to keep up with changing needs of the consumer.

Time Warner, formerly AOL Time Warner, formerly just AOL, began in 1985, founded by Quantum Computer Services to offer online services. From humble beginnings of only 500,000 members in 1993, it grew to over 9 million in 1997.

AOL currently has over 34 million members worldwide and is widely acknowledged as the best consumer online service. AOL's history and success is based on its intention to connect more than just computers, AOL connects people, and the AOL community has become one of the largest 'cities' in the world (Swisher & Dickey, 2003, pp 12-18).

A Brief History of E-Business

E-business was preceded by the growth of the Internet in two phases: the Communication Phase and the Information Phase (Norris & West, 2001, pp 32-38). The Communication Phase (1993 to 1997) can be defined by the rapid adoption of e-mail. From AOL's "carpet bomb" approach -- CD in the mail, CD at Target, CD with your detergent -- to Hotmail's "viral marketing," this marked a period where e-mail and Internet awareness spread infectiously, revolutionizing how people and business communicated.

As online communication grew, so did the...