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.
