AOL's Name Blame Game

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What's in a name? What's it worth? If you've ever wondered these things, you'd have been interested in a collection of auctions that closed yesterday on eBay (Nasdaq: EBAY). In an effort to promote America Online's new $9.95 a month Netscape-branded online service, Time Warner (NYSE: TWX) put up 200 first-name email addresses on the block.

Including a free year of online service -- a $119.40 value -- you'd figure folks would have bid high for the free year of ISP and the rights to lock into the simplest email addresses. But it wasn't to be. If I'd wanted to be known as Rick@Netscape.com, I only needed to top the winning bid of $86. My wife Maria could have gotten in for as little as $26 while Susan, Pamela, and Margaret were walking away with the $20 steal of a lifetime. Yes, they will all be getting a whole year of Web connectivity for less than two bucks a month.

As a matter of fact, just 19 of the 200 names that Time Warner put on the block -- or less than 10% -- went for more than the $119 value of the account itself. Only one could be classified as a brutal bidding war, with John@Netscape.com coming in at $1,025.

The proceeds went to charity. The net result went to reality. You can't blame eBay for this. You can sell just about anything on eBay -- and that's one of the many reasons why it has been such a successful Motley Fool Stock Advisor pick. In case you were scoring sibling rivalries at home, David@Netscape beat out Tom@Netscape ($88.50 to $181.38).

I guess you can blame this on the glut of bargain-priced Internet access providers. Companies such as United Online (Nasdaq: UNTD) and, to a lesser extent, Earthlink (Nasdaq: ELNK) have done a great job of filling out the bare-bones market while users on pricier broadband deals or folks comfortable paying a premium for AOL's training wheels may not be anxious to ditch their connections for the basic Netscape dial-up service.

I would look at this as a wake-up call for Time Warner's AOL service. Playing the low-priced access game isn't the solution. Taking the high road and beefing up its flagship brand to stem off the defections -- 2 million net users over the past year -- is the path best taken.

What would you do to get AOL back on a growth track? Is Netscape.com incremental or detrimental to Time Warner? All this and more -- in the Time Warner discussion board. Only on Fool.com.