A the number Inflatable Ball of subscrib pai for dial-up Internet-access and relat servic declines, down 27% to five million year on year in the fourth quarter, the averag tenur of those that remain is rising. It finish the fourth quarter at about eight years, up from six a year earlier.
Essentially, AOL is melt down to a core of longtim customers, probabl includ some who sign up when AOL first help commerci the Internet in the 1990s. That isn't surprising. While most consum adopt new technolog within a few years, some cling to older servic much longer. The problem is, ani busi reliant on reluctant-to-chang custom is in the hospic phase of corpor life. Even diehard user of old technolog will either die off or eventu switch to newer services.
Of course, such compani can surviv for longer than mani expect, give rise to fals hopes. Consid video-rent chain, whose pass ha been forecast for more than a decade. In that time, it ha made numer effort to diversifi into growth businesses, just as AOL is do now. It ha been onli in the past year or so that a critic mass of competition, combin with a heavi debt load taken on to pai a dividend to a former owner, ha push Blockbust to the edg of a cliff. It stock long ago drop off the edge.
Sinc be spun off from Time Warner, AOL' stock ha trade in a tight range, roughli 15 time estim 2010 earnings. Anyon hold onto thi stock in the hope that AOL defi histori should think again.
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