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60% of AOL's Profits Come From Misinformed Customers

samzenpus posted more than 3 years ago | from the check-your-math-again dept.

America Online 301

satuon writes "Ken Auletta's big New Yorker piece on AOL (subscription only) this week revealed an interesting detail about the company's inner workings. According to Auletta, 80% of AOL's profits come from subscribers, and 75% of those subscribers are paying for something they don't actually need. According to Auletta: "The company still gets eighty percent of its profits from subscribers, many of whom are older people who have cable or DSL service but don't realize that they need not pay an additional twenty-five dollars a month to get online and check their e-mail. 'The dirty little secret,' a former AOL executive says, 'is that seventy-five percent of the people who subscribe to AOL's dial-up service don't need it.'"

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301 comments

My grandmother is one of them... (4, Interesting)

rwa2 (4391) | more than 3 years ago | (#34972924)

Who are the other two? And particularly the person who actually NEEDS AOL?

We've tried, and she actually understands. But she's hooked on the "experience". Maybe she just likes some disembodied voice telling her that her internet is up or down.

Well, maybe it will go away once she starts using a smartphone and starts uploading all her stuff into the cloud. That doesn't seem like a very compelling argument we have to make to her, though.

Re:My grandmother is one of them... (2)

Pharmboy (216950) | more than 3 years ago | (#34973014)

Father in law was the same way, we started him with AOL many years ago, got him to get cable a few years later, spent a couple years with both because we couldn't convince him. Finally he got it and quit aol, but only after spending hundreds in unneeded service. Some (many) older people are just hardheaded as they claimed their kids to be 50 years earlier. They just won't change out of fear of loss.

Re:My grandmother is one of them... (0)

Anonymous Coward | more than 3 years ago | (#34973136)

HAHA my father in law was the same way...it took years of my time trying to convince him

Re:My grandmother is one of them... (5, Insightful)

vlm (69642) | more than 3 years ago | (#34973034)

And particularly the person who actually NEEDS AOL?

I was also bit mystified by the 25% actually needing it.

It seems to be insurance.

Can you absolutely 100% guarantee that your hotel or conference center will have a phone line to dial up and check your email etc when business traveling? Yeah, pretty much. Thats right up there with "having sheets" or "has HVAC" or "has electricity".

Can you absolutely 100% guarantee that your hotel or conference center will have WORKING wifi? Well, err, ... um... Yeah maybe 90% but can you financially afford to take that chance for only $50/month to AOL?

Re:My grandmother is one of them... (5, Interesting)

T-Bone-T (1048702) | more than 3 years ago | (#34973202)

Some people live in the boonies and can only get dial-up. Wireless ISPs are moving in to many places now, though. I have relatives that live in the middle of nowhere and have internet options now that are at least as fast as I do in the big city.

Re:My grandmother is one of them... (1)

jcwayne (995747) | more than 3 years ago | (#34973510)

Your laptop has a... er... what did they call those things... oh, yeah... a "modem?"

Re:My grandmother is one of them... (1)

cynyr (703126) | more than 3 years ago | (#34973680)

Mine doesn't... I thought all of those got phased out years ago....

Re:My grandmother is one of them... (1)

DavidTC (10147) | more than 3 years ago | (#34973648)

My DSL account actually comes with a dialup account.

Of course, it'd be long distance from anywhere I needed to use it.

Re:My grandmother is one of them... (2)

lavagolemking (1352431) | more than 3 years ago | (#34974170)

Actually, someone I know is still paying a monthly bill for AOL for a different reason. They are afraid of the people on the retention line [consumerist.com], and don't want to plan out a couple of hours to fight over it. Call it unethical or illegal, but it works - I still to this date (4 years later) cannot get them to cancel because they don't want to waste the time and energy. I would expect that a lot of other successful companies play this game too.

Re:My grandmother is one of them... (0)

Anonymous Coward | more than 3 years ago | (#34974210)

Of course they fired that 'CSR' and have since claimed to have changed their retention scripts- that story is about 5 years old now.

Same thing with earthlink (5, Informative)

goombah99 (560566) | more than 3 years ago | (#34973276)

I found my mother was being billed $50/month by earthlink even though she had service through another ISP. The phone number earthlink claimed they were providing service to was not only in another area code but did not even exist in that area code. When I complained to earthlink that they had stolen thousands of dollars from her over the years they just said "Earrthlink is not a usage based service". Of course not, especially when they supply service to telephone numbers that don't exist.

It get's worse. actually. I had canceled her service. but it turns out they called her back aftrwards and asked if she was unsatisfied and would she like to continue the service. They then told her that given her usage patterns they reccomended she buy extra space! Extra space on an account that she could not even use if she wanted to.

Never got any money back. Thieves. Boycott Earthlink.

Re:Same thing with earthlink (1)

gmack (197796) | more than 3 years ago | (#34973462)

I know guy who bought a computer to keep himself busy now that he was in a retirement home. IT cam with "free internet for three months" and by that they meant they tossed in an AOL CD. What they didn't say was that they had already provided his credit card details to AOL so even though the software was never installed he got billed for it anyways. When I called to complain they told me "we don't look into people's accounts to see if they are using it" and then provided a partial refund only.

Re:Same thing with earthlink (4, Informative)

Bryansix (761547) | more than 3 years ago | (#34973902)

Call the Attorney General for sure. But also call the credit card company and tell them the charge has been fraudulent the whole time. At least they will credit back the last month but possibly more.

Re:Same thing with earthlink (4, Informative)

hedwards (940851) | more than 3 years ago | (#34973782)

What you do in cases like that is report it to the Attorney General's office. While they can charge you whether or not you're using it, they can't generally charge you for something that you can't possibly use and definitely not without proving that it was signed up for by the party paying the bill.

Re:My grandmother is one of them... (0)

Anonymous Coward | more than 3 years ago | (#34973466)

My mom is also in the AOL boat despite using DSL. She likes the interface (YIKES!) and is used to it. I guess she likes the little man that says "You've Got Mail!" as well...
She however was savvy enough to call them and now she is paying IIRC about $8.95/mo just by making a phone call and complaining. She also has a backup method of connecting if the DSL goes out, which DOES happen occasionally. Around my house I have no other ISP option since I don't even own a land line. So maybe she *is* the smarter one.... nah!

Re:My grandmother is one of them... (5, Informative)

gmack (197796) | more than 3 years ago | (#34973506)

Don't forget that the people who you call to disconnect your service get payed a commission on every customer they get to stay and those people will say anything to get you to reconsider even if it's completely untrue. You might also want to keep in mind that their disconnection process was actually the subject of a lawsuit that involved the Attorney Generals of 48 states. [ecommercetimes.com]

Re:My grandmother is one of them... (0)

Anonymous Coward | more than 3 years ago | (#34973894)

My sister had AOL for a while and when she cancelled it she continued to be billed for it for nearly a year. Every month she would check her credit card bill and call to enquire why she was still being billed and got some lame excuse, including that there was no record of her request the first couple of months. She finally mentioned it to me and told her to dispute the charges with her credit card company and to send a registered letter to them demanding to know why after 10 months she was still being billed for something she had asked to have cancelled. The dispute of the charges finally got AOL's attention and she actually got a full refund through Visa.

Re:My grandmother is one of them... (1)

mulvane (692631) | more than 3 years ago | (#34973972)

I had a problem with services such as AOL doing this bull.. It became easier to look at my monthly billing statement, find the things I WANTED to pay, and then cancel my debit card and get a new one. Really..It avoided a lot of hassle.

Re:My grandmother is one of them... (4, Informative)

Mousit (646085) | more than 3 years ago | (#34973934)

The worst part of all is she doesn't even have to lose her "experience" to get off dial-up.

AOL has a FREE level of service under their "AOL for Broadband" setup, and you can convert existing dial-up accounts to it. I did this for my grandmother. She was on AOL Dial-up for years and years (she actually used it though, because in her area broadband was unavailable until late 2008). Finally DSL became available and she was happy to jump onto it (finally she could watch those videos the younger grandkids send). So I helped her convert her AOL Dial-up to a free AOL for Broadband account. She kept her e-mail address (and all the remotely stored e-mails), kept her links and shortcuts.

In fact, she kept everything, because you can still use the AOL Client to connect to a AfB account. It just doesn't dial anymore, it merely connects to the account over your existing broadband.

In effect, her "experience" literally did not change. She still loads up the AOL Client, and accesses everything through it. She lost nothing (the free AfB accounts do lose some services compared to paid, but nothing she used or was even aware of). The only difference is now she has 15x the speed of dial-up, and she pays $15/mo for it instead of $25.

Plus I got her a wireless router so she can use her laptop away from the phone line, which to her was probably the most glorious thing of the whole change. :)

Re:My grandmother is one of them... (1)

Anonymous Coward | more than 3 years ago | (#34974008)

We've tried, and she actually understands. But she's hooked on the "experience". Maybe she just likes some disembodied voice telling her that her internet is up or down.

As long as she doesn't dial-in or call tech support, your grandmother can use the full-blown AOL client for FREE atop an existing Cable/DSL connection. $10/mo buys antivirus service and backup dialup. For more info, go to KW: change plan

If 75% of subscribers don't need it... (0)

Anonymous Coward | more than 3 years ago | (#34972958)

How sorry I feel for the 25% of subscribers that do need AOL!

Inertia (4, Insightful)

Craig Maloney (1104) | more than 3 years ago | (#34972988)

So, essentially the bottom line of AOL is bolstered by "inertia"? Is there a compelling reason why someone hasn't told the investors and / or the people getting bilked?

Re:Inertia (-1, Flamebait)

vlm (69642) | more than 3 years ago | (#34973042)

So, essentially the bottom line of AOL is bolstered by "inertia"? Is there a compelling reason why someone hasn't told the investors and / or the people getting bilked?

Yeah, right after we get rid of Microsoft, whom has the same business model.

Re:Inertia (4, Informative)

Anonymous Coward | more than 3 years ago | (#34973354)

> Yeah, right after we get rid of Microsoft, whom has the same business model.

"Whom" is not a fancy way of saying "who." It has a grammatical part to play.

Re:Inertia (1)

cynyr (703126) | more than 3 years ago | (#34973712)

Care to show me a vendor selection tool for refrigeration components that works on something other than windows? until then either I can sell gear and use windows, or I can use a different OS and not sell anything.

Also, auocad(the standard in HVAC) is windows only as of right now, as is revit(the likely next standard)

Re:Inertia (4, Insightful)

Foobar of Borg (690622) | more than 3 years ago | (#34973254)

So, essentially the bottom line of AOL is bolstered by "inertia"?

Works for the RIAA. Actually, truth be told, this is how a lot of out-dated behemoths stay in business.

Re:Inertia (5, Insightful)

tunapez (1161697) | more than 3 years ago | (#34973432)

I've told them until I am blue in the face!

The AOLers cannot grasp the concept that they can retain their email addresses without paying for the unnecessary services. We've even downloaded their emails and contacts, opened IE and FF without AOL but they still don't believe. MSNers are no different. They are all the 60yo+ crowd who got online with the dial-up services and believe they still need these portals to get online with their Comcast/Cox/Qwest hi-speed. It doesn't help that the AOL operators outright lie to them about the necessity of the service.

Re:Inertia (1)

MoonBuggy (611105) | more than 3 years ago | (#34973548)

In which case I have no qualms about letting them waste their money. It's one thing to misunderstand or plain forget about a monthly outgoing (sure, in an ideal world one would keep a closer eye on things, but I can understand it), but if people are going to wilfully ignore the advice of those trying to help them then they can shovel the cash into a furnace for all I care.

Re:Inertia (0)

Anonymous Coward | more than 3 years ago | (#34973818)

This is why I stopped trying to convert people to FOSS years ago. If you haven't figured it out by now, FOSS doesn't need you.

Re:Inertia (1)

Hogwash McFly (678207) | more than 3 years ago | (#34973500)

No doubt inertia plays a part, but many companies bottom lines are bolstered by misinformation and ignorance, that's obvious any time you turn on the television and watch an ad break. Sixty percent for AOL is probably low compared to others out there. Is it really possible that they can keep inventing new and improved toothbrushes, razors and air fresheners every year? Of course it isn't, but that doesn't stop some of the largest conglomerates making billions by selling lies and scaring people into believing that their homes stink and that the mascara they bought last year is now worthless junk that makes them look like shit.

Par for the course, and I can't see it changing any time soon.

Re:Inertia (0)

hedwards (940851) | more than 3 years ago | (#34973812)

To be fair, they have yet to invent a razor that actually gives me a decent shave. And until they hit that point there's a legitimate reason to keep coming up with better designs.

Re:Inertia (1)

hedwards (940851) | more than 3 years ago | (#34973798)

The term you're looking for is fraud. I remember trying out their music service and being billed for things that I didn't want or need. And each time I'd call them they'd magically find other options. I ended up having to curse out the customer retention specialist before they'd accept that I wanted to be disconnected. Stupid prick made all sorts of distortions to try to scare me into staying.

Not a surprise (0)

ThatKidYouDid (617033) | more than 3 years ago | (#34972992)

As an in home tech I think 99% of people that I saw paying for aol didn't actually use dial up. Most of the time it wasn't worth trying to explain why they were essentially throwing away $25 a month, until I told them that my services would pay for themselves after only 4 months.

So's Facebook (-1, Troll)

dougvdotcom (1770636) | more than 3 years ago | (#34972998)

And what about the 500 million-plus people who misuse Facebook for everything? Maybe it's free beer, but don't we all have "friends" on Facebook who are driving around on it drunk? As others have, and will, say, I know a lot of elderly people who couldn't be on the Internet if it wasn't for AOL's point-and-shoot simplicity. At least AOL largely confines their n00bishness to within AOL. Facebook is far worse, because we're all subjected to it.

Please don't respond to this troll (0, Offtopic)

drinkypoo (153816) | more than 3 years ago | (#34973098)

Please, slashdotters, don't respond to this obvious troll. Thank you for your support.

Oh look, trolls with friends. (2, Funny)

drinkypoo (153816) | more than 3 years ago | (#34973152)

I have karma to burn, kids. Moderate away. I will eat your modpoints for breakfast and come back for lunch.

Re:So's Facebook (-1, Offtopic)

GNUALMAFUERTE (697061) | more than 3 years ago | (#34973796)

True, I just can't get my head around the concept of this social bullshit.

People talk about 'blogs' as if they were something new, come on! it's a personal webpage with a CMS on it, that's all. Remember when the word blog appeared in the scene? /.ers hated it. We complained, and we made fun of people using it. Then we accepted it, and now most /.ers say blog without a blink.

facebutt? we used to make fun of myspace and all that crap ... now most of /. uses facebutt. We also laughed at twitter when it first came up online, but now we report based on the stupid crap people post on it.

Personally, I have fixed this situation, with a few gmail filters, a brain-filter to ignore people talking about it, and this:

almafuerte@almafuerte-laptop:~$ cat /etc/hosts
192.168.0.101 almafuerte-laptop
127.0.0.1 localhost.localdomain localhost ::1 almafuerte-laptop localhost6.localdomain6 localhost6
127.0.1.1 almafuerte-laptop
127.0.0.1 hotmail.com
127.0.0.1 facebook.com
127.0.0.1 google-analytics.com
127.0.0.1 twitter.com
127.0.0.1 live.com
127.0.0.1 google-analytics.com ::1 localhost ip6-localhost ip6-loopback
fe00::0 ip6-localnet
ff00::0 ip6-mcastprefix
ff02::1 ip6-allnodes
ff02::2 ip6-allrouters
ff02::3 ip6-allhosts
almafuerte@almafuerte-laptop:~$

Debunked (4, Informative)

maeka (518272) | more than 3 years ago | (#34973002)

Re:Debunked (1)

Anonymous Coward | more than 3 years ago | (#34973156)

Debunked? The link you provided seems inline withe article to me.

I assume you were thrown off by the advertising revenue being around 50%. There's just one key fact you are missing; AOL shows ads to it's subscribers! Horrible I know, but so is this news, which, unless someone finds new evidence to the contrary, appears to be true.

Re:Debunked (1)

morgan_greywolf (835522) | more than 3 years ago | (#34973864)

AOL shows ads on its Netscape properties as well, along with other sites it owns such as Mapquest.

It's also important to understand that revenues and profits are not the same thing. Revenues are income from operations. Profits are what's left over from your income after you substract liabilities, which include expenses, short and long debt and a few other things.

Re:Debunked (1)

Zen-Mind (699854) | more than 3 years ago | (#34973246)

I must admit it's hard to dismiss this SEC document that states that only ~43% of revenue comes from subscription. But even using those numbers it would mean that at least 30% of their revenue comes from misinformed customers :P

Re:Debunked (4, Interesting)

timeOday (582209) | more than 3 years ago | (#34973286)

That shows 43% of their revenues coming from subscriptions. The article says 80% of profits come from those revenues. Does the 10-Q you linked contradict that? I would guess the accounting rules for deciding which profits come from which revenues are complicated, since it seems like a nebulous question.

Re:Debunked (1)

Anonymous Coward | more than 3 years ago | (#34973908)

From AOL's SEC filing:
"Our subscription revenues have relatively low direct costs, and accordingly, our subscription access service represents the source of the vast majority of our operating income."

My mother did this for years! (0)

Anonymous Coward | more than 3 years ago | (#34973030)

We had a cable modem in the house, but my mother insisted on using dialup to AOL. She used to because it was easy, and she could chat with all her friends back home. As Skype, facebook, and other tools became more mature she dropped AOL. I think this was only about a year ago.

AOL Stocks dropping in 3... 2... 1... (1)

SchizoDuckie (1051438) | more than 3 years ago | (#34973044)

Oh wait, hold that thought for another 17 hours, there's no stocks trading on sundays..

Todo: Get your granny's AOL login (5, Informative)

SchizoDuckie (1051438) | more than 3 years ago | (#34973110)

Time for ./'ers to step in and save their grandparents some money:

How to Cancel an AOL Dial-Up Service By Stacey Price, eHow Contributor
Canceling your AOL account is a simple task that can be done over the phone or online. With the integration of AOL's free web-based email service, you can cancel your dial-up service and still enjoy some of their features by converting to a free AOL account if you have an Internet connection.
Instructions
Things You'll Need:
  • Account information
  • Answer to your security question
  • Phone number
  1. Go to http://bill.aol.com/ [aol.com]
  2. Sign on with the primary screen name that you created when you registered your AOL account. Type the answer to your account security question and click "Continue."
  3. Click "Cancel my billing" in the right panel under the "I want to" heading.
  4. Click "How do I cancel my paid member account or convert it to a free member account" in the right panel, under "Frequently Asked Questions."
  5. Follow the on-screen instructions to send the cancellation request. It can be done through an electronic cancellation request online, by fax or mail.

Tips & Warnings

Re:Todo: Get your granny's AOL login (2)

hedwards (940851) | more than 3 years ago | (#34973850)

You forgot the step where you have to curse the CRS out in order for them to acknowledge that you told them to quit. I remember spending a full half an hour on the phone with one of them people before I had the bright idea to just curse him out for being a liar and a general son of a bitch. I'd told him several times that I wasn't interested in continuing to subscribe.

Re:AOL Stocks dropping in 3... 2... 1... (1)

maxume (22995) | more than 3 years ago | (#34973172)

Nah, investors know that AOL breaks down their revenues in their annual report, so they know that the article is wrong.

Only 60? (0)

Anonymous Coward | more than 3 years ago | (#34973054)

I had always assumed that 100% of their userbase were misinformed customers. Whats the excuse of that other 40% then?

Re:Only 60? (1)

maxwell demon (590494) | more than 3 years ago | (#34974056)

It doesn't say 60% of the customers are misinformed, it says 60% of AOL's profits come from misinformed customers. I guess that means 40% of their profits come from advertising companies for showing their ads to those misinformed customers.

Or maybe it's just the stress of quitting. (2, Informative)

Anonymous Coward | more than 3 years ago | (#34973094)

My aunt and uncle were AOL subscribers for years because they couldn't get broadband from the cable company or DSL from the phone company. Part of the problem might have been they had an unusual postal address, a road extension, not just a site on the road, which may have confused their databases, but eventually the power company came in, and I managed to get access to a supervisor who knew the area and would authorize an installer to come out.

Yay.

But they had to quit AOL first. It took several minutes of persuasion from the person at their customer service, and more than a little crying.

I swear, they must be specially trained to be so emotionally manipulative.

Oh well, at least they have 30 Mbps now. What do they need it for? Next to nothing, but EPB doesn't offer anything slower. How inconsiderate of them, isn't it??

   

People are creatures of habit (3, Interesting)

Ritz_Just_Ritz (883997) | more than 3 years ago | (#34973112)

It took me YEARS to wean most of my AOL using friends/relatives off of AOL. Once something winds up getting "automatically charged" on their credit card every month, a lot of folks are just too lazy to change. None of them were using any of AOL's "value added services" and it was just an email application for them. Most of them already had high speed internet from their cable company or a telco DSL line already. They're all using gmail now.

Re:People are creatures of habit (1)

Viperpete (1261530) | more than 3 years ago | (#34973440)

I do home and small business IT. I also happen to be lucky enough to live in an area with multiple cable and DSL providers. With almost every customer I have had over the last 5 years, I've had the discussion on why the ISPs "give" away free email address' and that is to lock them in, as we all know it is as much of a pain in the ass to change your email address as to change your phone number. I have tried to migrate every one of them to one of the free non-ISP emails. Most seem to understand my point that they should not allow an essentially free product to influence their value for dollar comparison shopping, but many still persist in retaining their comcast/aol emails because they find the changeover to be daunting and never end up considering the other providers because of it.

Re:People are creatures of habit (1)

DavidTC (10147) | more than 3 years ago | (#34973744)

I have had over the last 5 years, I've had the discussion on why the ISPs "give" away free email address' and that is to lock them in, as we all know it is as much of a pain in the ass to change your email address as to change your phone number.

I've managed successfully to keep my family from using their ISP addresses by simply not telling people their address when I set up email.

I'm like 'Oh, I don't know what your ISP account is, but why don't you just use gmail or hotmail?'

The joke is, if people are really determined to pay for their email, they can buy a domain name for about $3 a month at somewhere like godaddy and other registrars, and then you also have a domain name, which is what I recommend to people who are even slightly internet savey. The idea of someone paying $9 a month just for email is insane.

Re:People are creatures of habit (1)

Viperpete (1261530) | more than 3 years ago | (#34974068)

The joke is, if people are really determined to pay for their email, they can buy a domain name for about $3 a month at somewhere like godaddy and other registrars, and then you also have a domain name, which is what I recommend to people who are even slightly internet savey. The idea of someone paying $9 a month just for email is insane.

Totally, unfortunately most of my customers tend to be user savy and already some sort of web presence/experience. I get a lot of recent or close to retirees, who are used to whatever they used computers for in business or work and usually want to start paying bills and make purchases online. While, I do ensure their OS' is updated, firewalled, AVed and so forth, I tend, for many, to spend a lot of time talking about good password practices, looking for HTTPS for logins, checking amazon/ebay customer ratings and having dummy email accounts for iffy sites that require registration.

The funny thing is when I started CRTs were king and pretty much all PC's were on a desktop, I spent a lot of time talking about ergonomics. I'd look at their setup and to me I just saw pain. CRT's set on 60Hz, mice with no pads or those paper thin pads (no wrist pad), mice that you have to almost fully extend your arm to use, keyboard right in front of a high sharp edge, screens angled upward and spring back chairs so soft you might as well be sitting on a stool,.

The worst part back then was PC's were so much slower, so it took 4-6 whole hours to download and install everything they needed, nowadays it only takes like 1 1/2 - 2 and I spend the rest of the time talking and tweaking.

Re:People are creatures of habit (1)

Dogtanian (588974) | more than 3 years ago | (#34973982)

It took me YEARS to wean most of my AOL using friends/relatives off of AOL. Once something winds up getting "automatically charged" on their credit card every month, a lot of folks are just too lazy to change.

If, as you're implying, your friends were simply "too lazy" to bother spending five minutes on something that would save them loads in the long term, why were you spending "YEARS" getting them to change?

Don't get me wrong, AOL is, and always has been, a dickish company, and I don't like to see them get people's money. But if people know the score and are so damn lazy they won't change despite repeated attempts by you... they probably deserve to be ripped off- they sure as hell don't deserve your help, so why waste your time?

No way! (2, Informative)

Anonymous Coward | more than 3 years ago | (#34973134)

The only secret about this is that 75% is shockingly low. Is AOL known for anything other than elder fraud?

AOL? (0)

Anonymous Coward | more than 3 years ago | (#34973142)

Wait.... people still use AOL? I thought that died off years ago with the onset of DSL and Cable available in the majority of areas across the country.

Where are the lawyers? (3, Interesting)

pz (113803) | more than 3 years ago | (#34973214)

Sounds like a class action lawsuit to me.

No, I'm being serious. This is an abusive business practice. In financial circles, similar actions to intentionally mislead clients, especially elderly ones, especially by omission of whether a particular service is needed or not, is a very big deal and results in loss of license to the sales agent and potentially punitive action by the SEC to the employing firm. The scales of money are different, but the sleazy flavor is the same.

Re:Where are the lawyers? (5, Insightful)

LibRT (1966204) | more than 3 years ago | (#34973338)

You must be kidding. If I sell you a screwdriver, am I under any sort of obligation to determine whether in fact you require a screwdriver, and if so, that the screwdriver you are considering purchasing is the appropriate one for your purposes??? And why "...especially elderly ones..."? Give your head a shake - adults can make their own decisions on how to spend their money, even when those decisions are not to your liking.

Re:Where are the lawyers? (1)

uglyduckling (103926) | more than 3 years ago | (#34973386)

A screwdriver is a general-purpose tool, it's easy to imagine that most people would have use for one - if not every day, then at least on occasion. Dial-up internet is a special service, and is sold for one purpose: to get online. The vast majority of people don't need it, and telling them that they do is definitely mis-selling. It's also a service, not goods, and there is a different obligation to determine that a service is being sold correctly, compared to goods.

Re:Where are the lawyers? (1)

Anonymous Coward | more than 3 years ago | (#34974052)

A screwdriver is a general-purpose tool, it's easy to imagine that most people would have use for one - if not every day, then at least on occasion. Dial-up internet is a special service, and is sold for one purpose: to get online. The vast majority of people don't need it, and telling them that they do is definitely mis-selling. It's also a service, not goods, and there is a different obligation to determine that a service is being sold correctly, compared to goods.

Define a general-purpose tool please, because going by your 'imagine that most people would have use for one - if not every day, then at least on occasion" the internet is a "general purpose tool" that can easily be imagined as being need by most people - if not every day, then at least on occasion...especially here in 2011 as oppossed to back in 1990. If you're ignorant of what you need in order to do something, you've no business doing it. Every computer nerd can probably pick out a conversation in which they've lamented to the fact that there needs to be a test everyone has to take before they buy/operate a computer.

If I go to Advance Auto Parts and buy a special purpose tool to help fix my truck...is it the stores responsibility to ensure I know what the fuck I'm doing? Is it there responsibilty to ensure I've bought the right tool for the job? No. Quit signing up to be a victim people. Start taking responsibility for your actions. If you don't one day your going to wake up and wonder why everyone takes advantage of you...that is if you're even aware enough to realize it. One of the problems caused by not taking responsiblity for your actions is the loss in awareness regarding those actions.

If you're wife/husband/significant other/you go to the store to buy a tshirt and end up buying a pool cleaning service when you have no pool to clean...is it the stores fault? No. It's the purchasing parties fault for being ignorant of THEIR OWN needs.

This is not news. This happens every day in almost every business model. If you're shocked...I suggest it's time for you to wake the fuck up. I'd also suggest paying more attention to the things you do because you're probably being taken by someone in much the same way people are being "taken" by AOL

Re:Where are the lawyers? (1)

JohnAllison (838880) | more than 3 years ago | (#34973596)

I'm not sure which country you are from, but in the United States many legislatures have enacted laws to protect the elderly from those trying to take advantage of their age, trusting nature, and in some cases dementia.

There is even an entire area of law known as, wait for it, elder law.

So when the GP brings this issue up, it is indeed, a valid of question of law for the jurisdiction in which AOL operates, the United States.

Re:Where are the lawyers? (0)

Anonymous Coward | more than 3 years ago | (#34973582)

Having been through law school, I suspect that the lawyers are all busy taking, you know, cases they have an actual chance to win instead of getting their advice from Slashdotters.

Your post is a fucking perfect example of a little knowledge being a very dangerous thing.

AOL is easy? (0)

Anonymous Coward | more than 3 years ago | (#34973342)

How is AOL any easier than opening up a web browser? Somebody should ask this to anybody who claims it's easier.

Re:AOL is easy? (1)

tverbeek (457094) | more than 3 years ago | (#34973456)

Doing the same thing that they've already been doing for 5-10 years is easier than learning how to do something different.

"it's certainly not 80%" - apparently (1)

tota (139982) | more than 3 years ago | (#34973412)

Here's their sec filing if you want to look for it yourself:
http://www.sec.gov/Archives/edgar/data/1468516/000119312510245249/d10q.htm [sec.gov]

This was discussed on reddit very recently:
http://www.reddit.com/r/technology/comments/f71tv/that_post_about_how_80_of_aols_revenue_comes_from/ [reddit.com]

They were very critical there of an earlier story that was upvoted quickly but which was apparently well wide of the mark.
I suspect this sensationalist headline will be too - feel free to check.

ISP abuse is rampant - Free the internet (1)

daurtanyn (258081) | more than 3 years ago | (#34973424)

I don't understand. There is a whole spectrum of abuses on the Internet.

Comcast blocks port 25 and port 80 (inbound) so its impossible for me to run a mail service or a web service from a home computer. I'm forced to rely on service providers other than myself.

AOL is taking advantage of the uninformed. But other ISPs are preventing users from independence in other ways.

Sadly, fighting for an open Internet is getting harder and harder.

Re:ISP abuse is rampant - Free the internet (0)

DavidTC (10147) | more than 3 years ago | (#34973768)

Comcast blocks port 25 outgoing because the rest of the internet has asked them to, you whiner.

You can't run an outgoing mail server from dynamic residential addresses anyway, as everyone blocks those.

How hard is it to get a damn gmail account and use it relay mail? If you can't figure that out, you're not competent enough to run a mail server.

They are surviving on e-mail (0)

Anonymous Coward | more than 3 years ago | (#34973458)

I've got an older friend I've tried for years to get to drop her AOL account but she uses the e-mail address for business and is terrified of switching to a free service. I'd say the vast majority are just afraid of changing and loosing their e-mail address. I think if they made their e-mail free and not tied to the service and made people aware of this they'd go out of business overnight. There are still some that depend on the dial up but I'd say most it's the e-mail keeping them paying the one armed bandit.

Some people are just hooked (1)

TCFOO (876339) | more than 3 years ago | (#34973474)

I once saw an older woman come into a local super market a few years ago and ask a fellow employee where the AOL CDs were. before the greeter could send the woman on a pointless trek to the opposite side of the store, I told the woman that we didn't have any and that I haven't seen an AOL CD in years, and that she should contact her phone company for internet access. The customer then asked if I knew of any other stores that might have AOL CDs.

That's awesome (0)

Anonymous Coward | more than 3 years ago | (#34973522)

But then again, unneed services pad many a ledger, not just AOL's.

That said if the estimate is right it is a pretty huge chunk of their revenue.

About the "free" AOL plan - 1 thing to think about (0)

Anonymous Coward | more than 3 years ago | (#34973532)

One thing to remember for all the people going OFF aol- the cheapest subscription (4.99 IIRC) gets "free" McAfee virus protection with automatic updates etc.- I never have to worry about my mom's AV program. It might be worth it to me!

people still use AOL? (1)

mschaffer (97223) | more than 3 years ago | (#34973540)

I always assumed that the people that still used AOL simply didn't remember to cancel their service years ago or were deceased (somehow still paying the bill)

Re:people still use AOL? (1)

GNUALMAFUERTE (697061) | more than 3 years ago | (#34973866)

Now, how did Romero miss that in Land of the Dead?. In the scene where he shows the zombies trying to do stuff they did when they were alive, he should have shown some of them going to pay their AOL accounts and then trying to insert the CD into some wound in their bodies.

doesn't surprise me in the least (4, Interesting)

v1 (525388) | more than 3 years ago | (#34973560)

seventy-five percent of the people who subscribe to AOL's dial-up service don't need it.

Many dozens of times I've seen customers come in that are using AOL with their DSL. I don't see it so much with cable because the majority of people using AOL are using it because cable isn't available to them, they're too far from the city, but DSL is available and they've had it for years. Many of them signed up for their DSL (service by Qwest, formerly AT&T) through AOL and don't even realize it's not AOL providing it.

So I ask them why they are still using AOL, and it quickly becomes apparent that they believe that AOL is the internet. I'm able to reason with some of them, but even a percentage of those still want to keep AOL because they're comfortable with it. Me personally, having to change my email address would be the big problem. But last I checked, AOL reduces your charges down to something like $9.99/month if you just want to keep email and not have the rest of their service such as dial-up. But even when I explain this to them, many are just not interested in it. Many years ago when I quit my dialup, I switched to my isp's "email only" plan for that same amount and kept it for about 6 months, and it made the transition to cable a lot smoother for me.

I try to explain it to them, how using a local email app on your computer makes things like managing attachments so much easier, but a lot of these people just aren't interested in anything making their computer use unfamiliar again even if only for a brief time. They're in their secure zone and don't want to leave. Only just this year I finally got my next-door neighbor to drop AOL after showing her just how much easier it was to email photos from her new digital camera using a local email app.

And I'll just toss it right out there - they're all old people Every last one of them. So eventually AOL's user-base is going to literally die off.

Father's old friends--new email address (1)

Anonymous Coward | more than 3 years ago | (#34974194)

My dad knows he could move to Comcast email and quite consciously made the decision to stay with AOL as his friends could never all make the change to a new email address. Dad is 90. It is not all senility, but sometimes it is "inflexible" friends.

My mother (0)

Anonymous Coward | more than 3 years ago | (#34973610)

My mother used to pay for AOL and DSL from a different service. If that little email icon was not on the top left she wouldn't know how to check mail.

And they would never use the internet with the little blue "e". They would open up a browser within AOL's program.

Man bites dog (1)

jcwayne (995747) | more than 3 years ago | (#34973614)

Wait, a print magazine is covering the impending demise of an internet company which is failing to adapt to its business model becoming obsolete.

P.S. Yeah, I know AOL is/was not the internet but you can get there here from there (at 56Kbps).

What they don't know... (1)

woboyle (1044168) | more than 3 years ago | (#34973724)

The actions (or inactions really) of AOL remind me of a paraphrase of the old addage "what you don't know, won't hurt you". That paraphrase would be in this case "what they (AOL's customers) don't know, won't hurt us (AOL)". Sigh...

* Anonymous Coward sets mode: +b *!*@*.aol.com (0)

Anonymous Coward | more than 3 years ago | (#34973868)

Way back when, in the IRC channels I used to hang out, many of those had *!*@*.aol.com bans standard. Because AOL users "were stupid". Perhaps they were right...

Inevitable When You Shrink By 90% (4, Insightful)

careysub (976506) | more than 3 years ago | (#34973892)

AOL has claimed in the past that its subscriber base hit 30 million, this was probably somewhat exaggerated (rounding up a couple of million) but taking them at their word their subscriber base is now something like 3.3 million. Not quite 90% yet, but they have been losing at least half a million per quarter so we are only a couple of months out from that mark.

Any mass auto-billing subscription service that is going to have some fraction of subscribers who are inappropriately signed up through ignorance or error. On your way down to zero again it is inevitable that you will reach the point where these are essentially your only remaining customers. Approaching the 90% decline point, AOL clearly reached that stage some time back.

I await to see how AOL will arrange to screw their last few customers when the service is finally shut down.

This would be news... (0)

Anonymous Coward | more than 3 years ago | (#34973936)

...if it wasn't on Slashdot.org. Additionally, AOL should be happy this wasn't reported as 'XX% of AOL Customers Are Lied To And Preyed Upon'.

This is nothing new for the telecomm industry, a dishonest and shady business where the management treat the subordinates like animals in a circus of customer service. I've seen it time and time again, first-hand, with these kinds of situations. Poor training, a lack of inter-business organization and communication, little or no policies or plans that help solve customer problems, as well as over-bearing, contradictory, inaccurate and deliberately misrepresented information/statistics help the overgrown telecomm companies do what they do best: imposing themselves upon their customers to make money. They hire contractors and push HUGE incentives for getting new subscribers and when the contract is up and 50% of the new customers were lied to about their services, it's okay because they've already fired the contractor and the customer is bound by the contract they signed. Spend any amount of time with any of those companies and you'll see how other peoples ignorance becomes some executives bank-rolling bliss.

"Only when the last tree has been cut down; Only when the last river has been poisoned; Only when the last fish has been caught; Only then will you find that money cannot be eaten."

Small ISP. (2)

Daas (620469) | more than 3 years ago | (#34974196)

I used to worked at an ISP who had about 25 000 dialup subscribers. (And about 10 000 DSL) They were playing around with the idea of charging a couple more bucks for the service. I got asked to generate a connection usage report. Turns out 60% of the dialup customers had not connected to their service in the past 3 months. (That was 2 years ago, so 75% today would not surprise me at all)

When people are used to automatic billing either on their bank account or their credit card, they tend to forget that they're paying for some services they are not using.

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