a series of interesting notes on AOL and connectivity

[Dave Farber <dave () farber net>]

> -----Original Message-----
> From: Bob Frankston [mailto:Bobf-xix () bobf frankston com]
> Sent: Monday, March 17, 2003 10:14 PM
> To: Faulhaber, Gerald
> Cc: David Reed; 'Dave Farber'
> Subject: AOL and connectivity
>
> I¹m cc¹ing the David¹s as participants in the issue and don¹t intend this as
> an IP submission (unless you think it should be). These days we have other
> distractions on IP.
>
>
>
> I noticed your comments in the NY Times AOL story.
>
>
>
> It¹s a good opportunity to highlight the issue of connectivity since it¹s both
> the reason AOL is late to the game and why it has a fundamental problem. AOL¹s
> business is providing a service and when the Web happened it sort of embraced
> it but held back. You see that in email messages which treat AOL users a
> separate community since they don¹t support standard protocols and need
> special handling.
>
>
>
> Fast AOL has been tried; I even have a book about AOLTV. Interactive TV is the
> perfect match for AOL¹s skills, especially when combined with Time-Warner. And
> ITV has failed. The high speed broadband Interactive TV efforts of the last
> decade failed against the dial up Internet.
>
>
>
> With so-called broadband (a problematic term but let¹s not get too far off the
> topic) the value comes from being able to fully participate in the Internet
> and not just do faster AOL. While fast AOL is nice the real value is going to
> come from doing new applications that presume connectivity, even if it isn¹t
> that fast. VoIP is a simple example, http://www.eartherviewer.com
> <http://www.eartherviewer.com/>  is another interesting example.
>
>
>
> AOL can still provide services to users via the high speed connection but its
> role as a gatekeeper becomes problematic. Apparently (I don¹t have the
> reference offhand) those who go to broadband leave AOL since the AOL browser
> window is a peephole on something much larger and those who appreciate that
> are the ones who also appreciate broadband.
>
>
>
> The real battle AOL faces is finding its role. I was surprised and impressed
> how well it was able to deal with the Internet ­ MSN didn¹t fare as well in
> the early days and had to reshape itself in AOL¹s model.
>
>
>
> Of course, since I advocate separating transport from services I have a bias
> here but it also brings AOL¹s dilemma into sharp relief. What is its role if
> people go directly to the Internet and the Internet is a fundamental part of
> every day life? It can still provide services but people will no longer
> confuse AOL and the Internet.
>
>
>
> Connectivity is the stuff of which AOL is built. What happens when users get
> their hands on it?
>
>
>
> Of course, the wireless world is going to go through the same revolution ones
> everyone can have a voice.
>
>
>
>
>
> Bob Frankston
>
> rmf19 () bobf frankston com


------ End of Forwarded Message
-----Original Message-----
From: Faulhaber, Gerald [mailto:faulhabe () wharton upenn edu]
Sent: Monday, March 17, 2003 23:58
To: Bob Frankston
Cc: David Reed; Dave Farber
Subject: RE: AOL and connectivity

 

A thoughtful comment on AOL.  I have a different perspective.  The core of
AOL is not connectivity in the hardware sense: it's community.  Diehard AOL
members cherish it, and swear by it. Yes, I know lots of folks leave AOL as
they become more knowledgeable, but lots don't, including many computer
professionals I know.  That's because AOL (at least in the past) fostered
community, fostered peer-to-peer communications, and that's what people
really like.

 

I also thought AOLTV would be a huge win for AOL; as you say, it plays to
their strengths.  I am now convinced that Steve Case lost his way with the
merger, focusing on becoming a media company and losing the community focus.
Perhaps this is why AOLTV never made it; the firm lost its focus in the
merger.

 

It seems to me that we always must keep our attention on what it is that
people like to do.  This is different than what you and I like to do, or
what we think other people ought to like to do (a common problem besetting
us techno-twits).  It is different than new features and new products (which
are merely the means for people to do what they like).  Many people like the
"walled garden" that AOL provides, and they want to stay in it.  Maybe we
don't think they should; but they do.  What broadband could do for AOL is to
improve the walled garden, make it an even better community to live in for
those that like it.  This is not about pushing content down the pipe; it is
about increasing the bandwidth of the connection among members of the
community to allow them to do more of what they have proven they really want
to do...interact with each other in a mediated forum.

 
>

------ Forwarded Message
From: "Bob Frankston" <Bobf-xix () bobf frankston com>
Date: Tue, 18 Mar 2003 22:32:25 -0500
To: "'Faulhaber, Gerald'" <faulhabe () wharton upenn edu>
Cc: "'David Reed'" <dpreed () reed com>, "'Dave Farber'" <farber () cis upenn edu>
Subject: RE: AOL and connectivity

I apologize, this was longer than I planned but I find the topic very
interesting ­ it¹s not as much about AOL as it is about new marketplaces
built on enabling technologies rather than canned solutions.

 

Before I respond I should mention that I was in the middle of the ITV, MSN
and other efforts. I didn¹t make myself popular by correctly predicting
their demise but what interested me was the reasons for success or failure.
That¹s why I mentioned the Web vs ITV ­ it was placing my bets very early.

 

Community is indeed important and plays a central role. The problem is that
the AOL community is a small subset of the Internet as a whole and their
biggest community, the IM world, is not contained within AOL. They had to
invite everyone in and now I can also get AOL IM via ATT and other third
parties. The problem for AOL is that the traditional way of monetizing such
communities is to take them captive. Witness the lack of success in melding
the IM and SMS communities. AOL paid for ICQ but it¹s not integrated.
Integration would happen quickly were not the providers trying to seek
advantage.

 

Some people do want the walled garden ­ witness the MSN ads for how they
will protect you from all sorts of threats including those bad people who
tell you Santa Claus doesn¹t exist. But these are low value customers in
that they aren¹t really participating but are more passive users. Microsoft
Bob was different but played to some of the desire for handholding. It
tested very well in religious households and no where else.

 

I remember Bob Metcalfe telling the classic marketing story that people buy
the hole not the drill. Maybe they do so once but they quickly learn how to
use the drill. The Internet is much more that way, the hand holding doesn¹t
help very much and causes a lot of problems. Again, to use Microsoft as an
example, WebTV was hailed as the way ³the rest of them² would get online. I
actually tried it with my parents. In their case it was hopeless but nothing
else would¹ve worked. But it gave me some experience with WebTV and it was
much harder to use than a PC ­ it just didn¹t comply with the web metaphors
and it made the TV hard to use also.

 

The classic assumption is that technology is complicated and big things are
infinitely complicated. I remember speaking to Chris Peters when he was
running Office at Microsoft ­ he was surprised how simple the protocols
were. (I first met Chris when he was writing the mouse drivers for Word on
DOS). That¹s the secret ­ the Internet is incredibly simple and trivial. IP
is just ³put an address on the packet and drop it on the wire and maybe it
will get there². You can do email using a terminal program and nothing more.

 

The web works because so many people and ninnies can not only use it but
create their own and they can¹t do much damage because we have a strong
immune system (not strong enough but if we survive the latest attacks it
will be stronger). AOL can add value as an assist but it takes away value by
acting as a gatekeeper. The problem is that they don¹t have a good model for
adding value as an assist. ATT lost six billion (looks better as
$6,000,000,000) on Excite because they thought there was value in being a
gatekeeper. They were thwarted when users simply changed their home page.


Google is the counter example. Yahoo may be closer to being the AOL
successor. Comcast is in bed with them (in place of Excite?). But that¹s
dysfunctional since the transport and the service provider/hand-holder
should be different since they bring different skills to the table.

 

Steve Case wasn¹t unaware of this ­ the purpose of the Time-Warner deal was
to lock in their value but I think that TW saw AOL as their key to the
future. Those who sold their stock early were the lucky and/or wise ones. In
particular, those who decided to do their duty in public service for
Bloomberg were very lucky.

 

We¹re in a transition from all-in-one to mix-and-match. The PC is a very
generic component (especially if we include low end processors and simple
systems) and the Internet provides a universal wire that connects
everything. Programming capabilities from scripting to deep geek, databases
and other pieces allow one to rapidly create and iterate. It is a process
that feeds upon itself.

 

One great example is the blogging phenomenon. Observer Google taking the
plunge even if they aren¹t sure of exactly what it is. We also have the IP
list as very important publication. Newsweek, Time, et al deliver generic
stale news, the IP list is a refreshing alternative. I don¹t mean to pander,
it¹s just a great example of an effective alternative press. I should also
look at Google news but I don¹t change that rapidly myself.

 

Very simple, AOL brings remarkably little to the table and is a handicap
once people learn a little. That means they rely on churn and as your
neighbor becomes a native Internet user, you are able to fearlessly move on.

 

I¹ve already written too much but what most fascinates me is why a chaotic
system like the Internet works ­ I¹ve given some talks on the topic but need
to write it up since it also gives a perspective on why a chaotic wireless
world will work very well without rules.

 

The relevant point is that one doesn¹t need handholding for the Internet.
Yeah, newbies will get burnt by popups that say ³eat me² and some will die
of indigestion. But those who survive are the ones to watch. Students learn
the ecology quickly and it is simply normal.

 

Think of telecom as AOL ­ they are trying to give us a monolithic
communications solution when we can do far more using the basic
connectivity. Next will be consumer electronics as soon as I find the people
who want to work with me to build the right building blocks Š

 


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