generic-man makes some valid points, but they are mostly irrelevant. AOL is
not the internet. It is a large dial-up provider (
ISP). Yes, they can greatly influence prices on the dial-up side of the internet, but is that business viable in the long run?
I'd say, no. I was a charter subscriber to AOL -- switching over from GEnie (god knows how many years ago). I still have a letter from Steve Case begging me to return after I cancelled my account and returned to GEnie. In it I was promised a lifetime guarantee that my rate would never exceed $2.95/hour. What a deal I passed up.
So, GEnie and Prodigy and hundreds of other ISP's have bitten the dust. We can officially proclaim AOL the winner. Well, before Henry Ford started mass-producing automobiles there was a number one horse-drawn carriage maker somewhere in the world. And some of us remember a time when you could buy turntables to play vinyl records. Hell, some of us still own turntables and vinyl records.
My point is, AOHell is probably on the verge of being that carriage maker. Broadband internet access will jump up one of these days and bite them. And as older, less computer oriented users are replaced with younger more savvy users their subscribe base will eventually decline. These two factors will be difficult for AOL to cope with.
AOL then has to compete by charging for content. I just don't see anyone making money doing that except for some sex sites. Anyone that has followed Lucent Technologies the last year can tell you how steep the slope can be; riding on top of the world one year and junk bond status less than twelve months later.
Raising prices just brings that day closer. Each price increase makes cable and DSL more attractive.
AOL has won the dial-up ISP battle, but the internet is not dial-up ISP's. The internet is not AOL. AOL is a carriage maker; they've won the battle, but I don't see how they can win the war.
I have been a subscriber to Roadrunner for nearly two years. My $40 a month does not help AOL one bit. Nor in any sense am I an AOL subscriber. GEnie was once a part of GE, GEnie no longer exists, but GE does. In the longterm, AOL as a part, or significant part, of TimeWarner is not a given.