AOL seemed to have another advantage over the rest of the Internet: It employed hosts and conversation facilitators in its chat rooms and message boards to keep the communities active and engaging. In exchange for their work, the volunteer moderators were compensated with free AOL subscriptions. This arrangement was more favorable when monthly bills for AOL service could be upwards of $100, but after AOL changed its price to an unlimited flat rate of $19.95 a month in 1996, the moderators protested. Some of the 13,000 volunteer “community leaders” founded a webzine called Observers to organize, vent on service changes, and discuss culture relevant to AOL, including a review of You’ve Got Mail. (“Anyone going to the film for its portrayal of life online will be disappointed,” said the critic.) In 1999, former moderators sued the company for back pay, a case that AOL ultimately settled in 2009.
Observers was posted to the World Wide Web. The fact that I can read it now, unchanged from its original presentation three decades ago, is because this content was captured by the Internet Archive’s Wayback Machine. In contrast, virtually none of AOL’s proprietary content from the ’90s is accessible today. That’s the consequence of a closed model. As the Web grew—from 23,500 websites in 1995 to over 2 million by 1998—the inadequacy of AOL’s offerings became clear.
America Online’s merger with Time Warner in January of 2000 came at the height of the dot-com bubble, and even this juggernaut of a media empire wasn’t immune to the epidemic of collapsing Internet start-ups several months later. In a series of investigations in 2002, Washington Post reporter Alec Klein revealed how embedded AOL was in the dot-com crash. Many AOL advertisers with long-term contracts were start-ups that went bust: An online furniture business, an online sporting goods retailer, and other newly defunct dot-coms owed the company millions. AOL Time Warner covered up these losses to protect its stock price. In 2005, the Securities and Exchange Commission charged the corporation with fraud for inflating its online advertising revenue in a complex set of schemes that Klein’s reporting uncovered.
The collapse of online advertising was not the only factor in AOL’s decline. The merger with Time Warner is now taught in business schools as a case study in failed acquisition. The two companies formally split in 2009; AOL was later acquired by Verizon and is now a subsidiary of Yahoo. As it changed hands, the online service spiraled into obsolescence. By 2004, 39 percent of Internet users in America had broadband at home, according to the Pew Research Center. AOL had failed to branch into high-speed Internet, and to this day it delivers only dial-up service (to a reported “thousands” of customers). The chat rooms and forums inside AOL’s enclosure withered after the volunteer moderators exited. AOL’s media partners also moved on. Playbill closed its AOL channel in 1997, citing the difficulty of maintaining separate forums on multiple online services, a common sentiment among channel hosts. Theater lovers on AOL couldn’t hang out at the Playbill message boards on Prodigy, and vice versa. The publication consolidated its audience by building a website with chat rooms and forums accessible to any Internet user with a browser. AOL channels, which for novice Internet users had been helpful guides and interesting gathering places, became a frustrating barrier to the Web, like a trailer running too long when you really want the movie to begin.