AOL Profits On Ignorance

Apparently, something like 60% of AOL’s profits are coming from customer ignorance. About 80% of their income is from subscription fees, and 75% of those subscribers have cable or other broadband connections – meaning, essentially, they’re paying AOL for nothing but an @aol.com email address and a backup dialup account, presuming their computer has a modem.

That’s an interesting business model. But I don’t think it’s all that unusual – I can’t tell you how many times I’ve heard of things like maintenance or support contracts being paid for years after the specified hardware or software was taken out of service. If you’re in charge of that sort of thing at your business, it might be smart to take an audit of everything that’s still being billed and make sure that it’s still relevant.

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