AOL Stops Spreading the News

Why does AOL pull at my heartstrings in two opposing directions? Doesn't it realize the tender of the tether or the trouble with the tangle? After improving its value proposition by rolling out free spam filters, anti-virus software, and other interface enhancements to its service last year, it has kicked off the new year by taking things away. After abandoning the moderation of some of its proprietary message boards, the Time Warner (NYSE: TWX  ) subsidiary will now be shutting down its newsgroup reader.

This is ridiculous. Unlike the clunky Microsoft (Nasdaq: MSFT  ) Outlook newsgroup readers or the other Web-based readers, the AOL newsgroup service was a quick and efficient way to track relevant discussion threads on Usenet.

"We apologize for this inconvenience," reads the pop-up warning that AOL has been sending its subscribers when they try to access the service's reader. Yet I usually associate that kind of apology with road improvements, or with amusement parks in the process of upgrading their attractions. In this case, AOL isn't widening the road. It's tearing up the pavement.

AOL is even recommending third-party readers to its users -- it singles out Mozilla and Google (Nasdaq: GOOG  ) as alternatives. Google acquired the popular Deja.com Usenet Discussion Service four years ago -- just as it beat everyone to the weblog craze by scooping up Blogger.com back in 2003. And now AOL finds itself feeding the enemy while shoving more of its sheltered user base toward the bare-bones Internet. Am I the only one thrown by the logic here? AOL is ripping off the training wheels, only to eventually be scratching its head, wondering why its kiddies have pedaled away.

This isn't exactly the kind of behavior one would expect from a company looking to retain its core while attracting new accounts, especially after it suffered the loss of roughly 2 million net subscribers over the past year. Shooing users over to enjoy a generic surfing experience is as good as handing them the road map to cheaper access plans offered by rivals like Earthlink (Nasdaq: ELNK  ) and United Online (Nasdaq: UNTD  ) .

Back in November, I had suggested various upgrades for AOL to consider in my "Saving America Online" column. Apparently, the company seems to be heading in a more "inconvenient" direction.

Some questions to ponder that were recently posed:

Longtime Fool contributor Rick Munarriz really has been an AOL subscriber for the past dozen years, but he doesn't own any of the stocks mentioned in this story.The Fool has a disclosure policy. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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