Beep-beep, AOL. Time Warner (NYSE:TWX) units America Online and Road Runner have joined forces to co-promote their services after a long and shaky coexistence. It's about time these two linked up, considering the increasing threats to AOL's dial-up business and the fact that they're both shacked up under the same parent company banner.
Through the deal, both entities will provide pitches to the other's services. For example, Road Runner will push its high-speed customers to AOL for Broadband (a collection of rich media content offerings that AOL offers on a BYOA, or "bring-your-own-access," basis). Meanwhile, of course, AOL dial-up users will be given the pitch to go high-speed via Road Runner.
It's that BYOA element to AOL for Broadband that has left me dubious for a while. It underlines a truism about AOL: In many ways, it's almost always been more of an entertainment and content provider than an ISP. On that level, AOL has big-time rivals when it comes to doling out content for Internet users, namely Yahoo! (NASDAQ:YHOO) and Microsoft (NASDAQ:MSFT), and, increasingly, Google.
Here's something to chew on, in terms of just how long the scene's been changing: When Google first landed on the scene, it was popular despite the fact that it was pure search; its differentiating factor was exactly its Spartan interface. Even then, there were already plenty of Internet users who were ready to drive themselves.
Though AOL is still the top ISP, its subscriber drop-off has been reason for alarm. That's led it to several interesting and uncharacteristic initiatives recently. Such ideas include opening its content to non-subscribers; allowing users to access email through email clients other than its own home-grown interface, such as Outlook or Eudora; and thinking up ways to monetize its one product, AIM Instant Messenger, that has hooked both technophiles and newbies alike. The BYOA idea is an attempt to keep some revenue from broadband defectors by tempting them to pay a fee to keep content and their email addresses.
Peaceful cooperation with Road Runner is yet another step to keep AOL from getting run over by formidable foes. These aren't just the content, service, and access heavyweights like Yahoo! and Microsoft, but also DSL and cable Internet service providers like Verizon (NYSE:VZ) and Comcast (NASDAQ:CMCSA). In my opinion, AOL has a long and very difficult road ahead. However, having Road Runner on its side now is one more step to a better run for the money.
There's a lot of chat about AOL that goes on around here -- join the conversation about the future and the issues on the Time Warner discussion board right here on Fool.com.
Alyce Lomax does not own shares of any companies mentioned. She always felt sorry for Wile E. Coyote, even though he was, after all, trying to have the Road Runner for lunch.
