* This case study was prepared based on the material contained in "AOL Time Warner- by Arthur A. Gamble, which was published in Strategic Management:Concepts and Cases/ Arthur A. Thompson, Jr., A.J. Strickland, III. - 12th ed. .
INTRODUCTION.
America Online is the world's most popular online service. Why do more than 12 .
million people subscribe to AOL? The many reasons include availability, simplicity, and .
content. It provides subscribers a variety of interactive features - electronic mail, Internet .
access, entertainment, news, sports, weather, financial information, electronic shopping, .
and more. It greatly increased competition for market share, because almost everything .
AOL has to offer can be found in some form on the Internet. The increased demand .
yields opportunities for dramatic growth, but it also causes many difficult, technical, .
financial, and managerial challenges.
The pace of change in fiscal year 1997 had AOL scrambling. AOL's primary .
market is the home computer user, and that market is still growing. Their new .
fundamental purpose and passion has been to create a new medium that is easy to use and .
as accessible as the telephone and television - and just as central to the lives of millions .
of people around the globe. They strive to remain the leader in that medium, improving .
customers' lives by offering value, "ease-of-use-. With this will cause the merger with .
Time Warner. What the new decade is looking for.
CURRENT STRATEGY.
Everyday millions of people go online.
Merge: With this will entitle new-economy.
Additional new software to keep ahead of the competition.
Focus toward the new generation of children.
The AOL Foundation.
High-speed growth with TV and telephones.
AOL anywhere anytime.
Forming new partnerships with electronics.
Internationally.
INTERNAL ANALYSIS.
Since the use of the Internet and online services is growing at dramatic rates and .
the interactive medium was growing in very unpredictable ways, AOL managers believed .
