Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Web services specialist AOL (NYSE: AOL) has received a distressing one-star ranking.

With that in mind, let's take a closer look at AOL's business and see what CAPS investors are saying about the stock right now.

AOL facts

Headquarters (Founded)

New York City (1985)

Market Cap

$2.3 billion


Internet software and services

Trailing-12-Month Revenue

$3.1 billion


Chairman/CEO Tim Armstrong
CFO Arthur Minson

Trailing-12-Month Return on Equity


Trailing-12-Month Revenue Growth


Year-to-Date Return



Google (Nasdaq: GOOG)
Microsoft (Nasdaq: MSFT)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 60% of the 99 members who have rated AOL believe the stock will underperform the S&P 500 going forward. These bears include TMFJMo and Merlinssecret.

About a month ago, TMFJMo explained why AOL's best days are behind them:

The shift away from subscription and toward advertising is just going to be brutal for these folks. They have already cut thousands of positions and I suspect that more are to come. I just don't know how they are going to be able to compete effectively against the Google machine (among others) with has-been brands.

In addition to Google, AOL is forced to compete for advertisers and publishers with a wide-range of companies, including Yahoo!, Microsoft (through MSN), and even social-networking sites such as Facebook and MySpace. Our community's primary concern is that AOL simply isn't "fresh" and relevant enough to win consumers' time and attention. A quick glance at AOL's subscriber trends seems to confirm that.

CAPS member Merlinssecret explains:

AOL is a zombie company slowly marching to its demise. I don't see any strategy that can save this company. The brand is mortally wounded, they are losing upwards of 25% of their subscribers annually and their site traffic which determines ad rates is also declining. While they are focusing on internet display advertising, the marketplace is rapidly moving towards more targeted ads and mobile devises. The brand is also badly tainted and they lack the money to rehab it.

What do you think about AOL, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!  

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Microsoft is a Motley Fool Inside Value recommendation. Google is a Rule Breakers selection. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool's disclosure policy always gets a perfect score.