Although I heard a lot of different news regarding AOL during the past few weeks, I didn't have any chance to write about their new activities and what they are up to. It's a great opportunity to do so now.
First big shocking news was the instant messaging patent which will definitly have a great effect on their revenue if they use it. What that means is, they can start charging Yahoo! for its popular messenger and Microsoft for their MSN messenger if they want.
AOL has been through a lot of mergers and aquisitions during the past years but they are very happy with buying Mirabilis (Remember good old ICQ?) after they received the patent on the instant messaging technology. Mirabilis filed a patent request in 1997 on instant messaging and AOL bought Mirabilis one year later in 1998 for $287 million. The patent was pending for 5 years until a few months ago when it was approved by the U.S. government in September.
I would say one of the worst decisions made by AOL were the $112 billion(!) merger with Time Warner in 2000 and launching AOLTV, the first interactive TV service. After that, the world's leading Internet company became the world's largest media company as well under the name of AOL Time Warner.
It's not still obvious if AOL wants to charge the rivals (Microsoft and Yahoo!) for the instant messaging. Yahoo! Inc., which has grown to a market value of about $10.3 billion, has one of the most popular Internet instant messaging systems which is used by a large share of Internet users including myself every day. It's free, fast and benefits a lot of great features such as stock price monitoring, weather, calendar, mail and news all in one application. On the other hand, AOL has not been very happy with the recent mergers since the company's stock is worth less than a quarter of its value at the time of the merger with Time Warner.
They may also want to shut down the other rival, Microsoft, by starting to collect royalties from them for their MSN messenger. Microsoft has been planning to expand their instant messaging system by making huge contracts with cell phone carriers such as Verizon Wireless according to a Microsoft employee. America Online said it's testing a way for AOL Instant Messenger users to send messages to a cell phone even if the recipient isn't an AOL registered user. Most cell phones can exchange messages with each other but not through computer. Yahoo! has a great feature to send IM from its Yahoo! messenger to AT&T wireless customers' cell phone which I as a Yahoo! messenger and AT&T wirless customer use almost everyday. What that means is all three IM giants are doing some research on bridging the SMS and IM gap.
AOL has been into a huge number of troubles such as the area code change in the fall of 2001 around Rochester, NY area which made them pay $100,000 to the customers who received huge phone bills. However, they have never used their valuable patents such as SSL (Secure Socket Layers), the key internet technology, which is owned by Netscape Communications, a part of AOL. Netscape also has patented cookies (little files stored by the web browsers to identify and track web visitors) which gives the power to its owner, AOL, to start charging Microsoft and other web browser companies for using cookies technology in their web browsers!
And why doesn't AOL use its valuable patents? Simply to defend the rivals in case they start charging for patents. It's usually more economical for the companies to retain the patents and trade them if they are challenged on some other technologies. Anyways, Instant messaging patent is definitly a great treasure for AOL which may affect their not-too-good stock price in the near future.
