Jaws dropped with mouths wide opened when in January 2000 we all learned that the tiny little internet company Steve Case started bought the largest media company in the country. It was as if Steve Case was saying “the new economy rules” and “the internet will be the driving force for media in the future.” It was like Segway acquiring General Motors. it happened. But no one could figure out how. A year later when the deal was finalized, the new economy had already started to show signs of weakness.
The how was simple. A bloated stock market (read bubble) and an over valued company with a bunch of foo-foo currency, a big ego and a spending spree that ultimately would rear it's ugly and wounded hung over head. As the adage goes, guilty by association, and as such AOL slapped it's ubiquitous three letter initials in front of the most revered media company in the country: AOL Time Warner.
Let's throw another adage to the crop: the honeymoon is over.
Today AOL Time Warner announced it's dropping AOL from its name. To add insult to injury, it will also revert it's NYSE symbol from AOL to it's old economy nemesis, TWX.
As I read this story I couldn't help thinking about the branding problem. From the beginning AOL has been saddled with a reputation that could be described as love them and hate them. For those of you who haven't shut the new economy out of their memory, one of the best dot com Superbowl Ads was for CompuServe (or was it Prodigy) that for nearly thirty seconds showed a blank screen with a highly compressed and repetitive telephone busy signal. As the spot wound down it's thirty seconds, it revealed the CompuServe logo and alluded to the ever present and annoying busy signal AOL users would deal with when trying to dial up.
Ahhh. The days of dial up. Perhaps a good book title. Or a horror movie that should never be produced.
AOL acquired CompuServe. And a bunch of other companies. Using that foo-foo currency propagated by get rich quick schemers betting their pensions, salaries and savings on the too good to be true dot com rush.
AOL never recovered from its image as a mediocre service provider. But they were big. And they were ubiquitous. Kinda reminds me of where Quark sits today. But that's another story. But egos are hard to crush. Especially when they are your own. So AOL pasted its name in front of Time Warner as it hoped to create a new chapter in media history sitting proudly next to Life Magazine, RKO, KDKA of Pittsburgh and CNN.
But in a move that redundantly punctuates the end of “the new economy”, one wonders what will happen to AOL. It's suffering massive subscriber attrition, poor marketing, loss of focus and a brand that a helluva a lot of value, but no customer loyalty. It failed to do anything with Netscape, it's efforts to market and convert its customer base to sign up for its own broadband have failed miserably and recently its efforts to follow (rather than start) trends in terms of offering blogging and enhanced social networking features and services to its antiquated online service are pithy at best.
For me, I'm happy to see the AOL brand get swept under the carpet. I'm sure shareholders are, too. It just goes to show you no matter how strong your brand might be, if you fail to deliver on its promise you're going to lose equity and customers fast.
On another venerable brand note, I'm wondering how BMW will do with Rolls-Royce. Remember, BMW paid hundreds of millions of dollars simply for the Rolls-Royce automobile nameplate. They're introducing the first BMW built Rolls this week. At $320,000 it better live up to the Rolls-Royce name.
Past articles in the Digital Tavern related to this post:
What's In A Name? Should You Change Yours? | AOL. The King of Junk Mail. And How To Help Fight Back