Wednesday, November 18, 2009

AOL's Next Step

Watch carefully as TimeWarner will be spinning off AOL next month. Why? Because AOL has to make the transition from a dial-up company to a content company. And you need to be making a similar transition.

No one wants to be in the dumb-pipe business. Not VZ. Not ATT. Not even the cellular divisions want to be pipe only.

NetZero is riding out the dial-up train all the way with NetZero and Juno. So is EarthLink. In the case of NetZero, their parent company, United Online, diversified years ago. (social network); MyPoints (affiliate/reward programs); (hosting); and FTD (tele-florist). What are you doing to diversify your revenue?

Do you have a Hosting company? SAAS? Back-up? Managed services? Hosted Exchange? And you do not have to do it all yourself! Make strategic partnerships.

EarthLink is riding out it's declining dial-up/DSL/cable revenue. ELN knows that the DSL and cable broadband resale days are declining with their revenue. The play for ELN is its ownership of New Edge Networks, a facilities based CLEC. New Edge has two marketing plays: MPLS over DSL and PCI Compliance. Both messages have played well with small businesses, especially multi-location businesses like gas stations and retail stores. NEN does not sell voice; it uses VoIP Provider partners like Intelliverse. Smart. Stick to your knitting.

A similar company is MegaPath. It is a DSL play that has NOT carved out a marketing niche yet. It is also now offering its own Broadsoft based SIP Trunk. We'll watch how this goes. MegaPath, like New Edge, sells via agents as well as direct sales teams.

The only other dumb-pipe reseller I know is Mammoth Networks in the Qwest footprint. If you haven't heard of Mammoth or MegaPath, it's because their marketing team is quiet. But then, so is yours probably.

The point: dumb pipe resale is a declining business. You have to add Value. AOL has content and advertising. What do you have?

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