In 1994, Ted Leonsis was the head of the new media marketing firm he created, Redgate Communications, spun out six years earlier from a CD-ROM based computer shopping business. Redgate dealed in digital media—sometimes called new media—new territory in the marketing world. And he was pretty good at it. That year, he went out to lunch with one his investment bankers, Dan Case. Case mentioned that his brother Steve was working at a small internet company looking to bring internet services to the mainstream. They had only just finished rebranding to a new name, with a new purpose, America Online.
Leonsis agreed to meet with him. Within the year, AOL acquired Redgate and brought Leonsis and his team aboard, expanding into a market that was steadily growing year over year: the average American consumer.
AOL began in 1985 as Quantum Computer Services. Their primary product was their Q-Link, which allowed Commodore 64 computers to connect to an online network, a mix of games, email and an online Bulletin Board. In 1991, Steve Case was put in charge of the company as CEO and he set his sights much higher. He began expanding the network to Apple computers and PCs, unifying it under its new name, America Online.
Case believed that it was time to bring networked computing to the masses. He marketed AOL for everyday computer users. He staked the company on the idea that people simply needed a way to connect with one another without needing to understanding the technical underpinnings of what they were using. AOL’s interface was dynamic and friendly, but its most drawing feature was its chat, an essential part of the service from the very beginning, which brought thousands of new users to the network. Eventually this expanded to various chat rooms (many focused on adult content) and instant messaging.
But crucially, AOL wasn’t the Internet. Like its competitors CompuServe and Prodigy, it was a closed loop that relied on individual computers to network with one another. From a technological standpoint, it was closer to a bulletin board system than emerging common Internet protocols.
In the early 90’s, AOL embarked on one of the most aggressive and expensive direct mailing campaigns in the history of advertising. A brainchild of Chief Marketing Officer Jan Brandt, the campaign centered on sending floppy disks, and later CD-ROMs to every household they could—some several times over. Each disk provided a few hours of free service. People would take advantage of those disks for years, racking up more and more free hours by adding more disks to their collection.
But Brandt’s theory was once people started using AOL, they would be hooked. And she was right. By the mid-90’s, AOL was pushing well past its competition, and America Online was a household name.
That’s the AOL that Leonsis stepped into in 1994. And he had even grander ambitions, and wisely focused on its strength as a content provider, rather than a mere facilitator of network connectivity. He brokered deals with major publishers and positioned AOL as a friendly and safe space online, a place to go to find the things familiar to you in the real world—the news, entertainment, sports, and some good old-fashioned chat in the chat rooms.
The way Leonsis saw it, AOL wasn’t competing with Prodigy and CompuServe, both already fading into digital memory. They were competing with Disney. They were competing with the television. He wanted AOL to build franchises, to own the experience of digital networks for their consumers. He leveraged his connections to create partnerships with major publishers and media companies to grow AOL into an interactive entertainment portal that AOL had full control over. He was even eyeing original content produced and exclusive to the AOL brand.
But the Internet had other ideas. Not beholden to any one company or owner, the Internet spread out horizontally, distributed among competing protocols and experiences—Gopher, WAIS, Usenet and a still very early World Wide Web. It was also gaining popularity in the press and in media, and even mainstream consumers were interested in cyberspace. AOL only confused the issue. AOL users could go online, but they couldn’t access the Internet.
Leonsis saw the Internet coming in his periphery, and recognized it as a threat to his closed system. But it couldn’t be ignored. In 1994, after many requests from subscribers, AOL expanded support to certain Internet protocols, including Gopher and WAIS. In a press release shortly following the support, they promised “full access to the content of the Internet.” That same year, Steve Case told the press:
“It’s not a choice between AOL and the Internet… AOL is the Internet and a whole lot more.”
All of a sudden, AOL began to position themselves differently, as a part of the Internet rather than as something separate from it. Consumers of the mid-90’s weren’t always well-versed on the differences in networking protocols. You were either online, or you weren’t. And America Online got you online. AOL was all too happy to lean into that, and capitalize on a growing interest in surfing the net. They wanted to be thought of as the same thing.
And indeed, AOL did begin to be a portal into the larger world of the Internet even behind its tightly controlled walls. But there was one notable absence from their support list: the web. AOL didn’t have a browser until it acquired a small browser company called BookLink in 1995. Then, in 1996, AOL added Microsoft’s Internet Explorer.
As AOL expanded Internet access for its subscribers, its identity became slowly subsumed by a much wider, interactive, community-driven Web and internet. Users began to access the service more and more not just for chat rooms and access to exclusive content, but as a link to the wider web. By 1997, about half of users accessing the Internet were doing it through AOL. AOL had got its wish. It had become more or less synonymous with the Internet. But its dream of multi-generational franchises died with it.
In 1998, just a few years after they first opened access to the web, AOL was so in the web game that they purchased Netscape in a market-shattering $4.2 billion deal. And though many will look back fondly on salacious chat rooms and AOL instant messaging, the collapsing of AOL into the wider web was more or less complete.