1
00:00:00,080 --> 00:00:02,560
Speaker 1: Hey there, and welcome to Tech Stuff. I'm your host,

2
00:00:02,759 --> 00:00:06,520
Speaker 1: Jonathan Strickland. I'm an executive producer and I Heeart Radio

3
00:00:06,600 --> 00:00:12,520
Speaker 1: and I love all things tech. And there was a

4
00:00:12,560 --> 00:00:15,040
Speaker 1: company that was so closely tied to the idea of

5
00:00:15,040 --> 00:00:18,200
Speaker 1: connecting to the Internet that for some people it was

6
00:00:18,239 --> 00:00:22,320
Speaker 1: synonymous with the Internet. It show. I'm talking about America

7
00:00:22,360 --> 00:00:26,000
Speaker 1: Online or A O L, which is still around, but

8
00:00:26,160 --> 00:00:28,400
Speaker 1: we're talking about the early days, and A O L

9
00:00:28,480 --> 00:00:31,960
Speaker 1: grew into a giant force of a company. It was

10
00:00:32,000 --> 00:00:35,040
Speaker 1: part of a merger that many people have described in

11
00:00:35,080 --> 00:00:37,680
Speaker 1: the wake of that merger as being the worst deal

12
00:00:37,800 --> 00:00:40,559
Speaker 1: in the history of tech mergers. So we're gonna look

13
00:00:40,560 --> 00:00:43,720
Speaker 1: at the history of this company and where things are today.

14
00:00:44,000 --> 00:00:47,080
Speaker 1: So in this episode will look specifically at how that

15
00:00:47,120 --> 00:00:50,279
Speaker 1: company came to be and how it grew in the

16
00:00:50,320 --> 00:00:56,480
Speaker 1: early years. Our story concerns several co founders. Frequently, if

17
00:00:56,480 --> 00:00:58,680
Speaker 1: you look at stories about A O L, they'll talk

18
00:00:58,720 --> 00:01:01,560
Speaker 1: about one of these co found unders over all the others.

19
00:01:01,560 --> 00:01:05,200
Speaker 1: But they are very important, each and every one of them.

20
00:01:05,440 --> 00:01:10,000
Speaker 1: So first we have William F. Von Meister, who founded

21
00:01:10,040 --> 00:01:12,440
Speaker 1: a startup that would give birth to A O L.

22
00:01:12,560 --> 00:01:14,480
Speaker 1: He would not be part of a o L itself,

23
00:01:14,920 --> 00:01:18,000
Speaker 1: but a o L would grow out of a company

24
00:01:18,040 --> 00:01:23,800
Speaker 1: that Maister had built, and the co founders would include

25
00:01:23,920 --> 00:01:28,280
Speaker 1: three men who worked for this startup. UH. The startup

26
00:01:28,319 --> 00:01:32,440
Speaker 1: was called Control Video Corporation. Those three men were Steve case,

27
00:01:32,959 --> 00:01:38,160
Speaker 1: Mark Seraf and Jim Kimsey. William F. Von Meister was

28
00:01:38,240 --> 00:01:42,280
Speaker 1: born in New York City. He his father had worked

29
00:01:42,280 --> 00:01:46,520
Speaker 1: for the Zeppelin Company, infamous for being the company that

30
00:01:46,520 --> 00:01:51,400
Speaker 1: would build the Hindenburg airship, the one that burst into

31
00:01:51,440 --> 00:01:55,200
Speaker 1: flame and gave birth to the OH the Humanity Line.

32
00:01:55,920 --> 00:02:00,200
Speaker 1: Von Meister was born on February twenty, nineteen two. He

33
00:02:00,280 --> 00:02:04,160
Speaker 1: attended private schools and he went to Georgetown University, but

34
00:02:04,280 --> 00:02:08,360
Speaker 1: he never graduated. Despite that, he was able to enroll

35
00:02:08,480 --> 00:02:12,639
Speaker 1: in the master's degree program for business over at American University,

36
00:02:12,720 --> 00:02:16,480
Speaker 1: and upon graduating, he founded many startups, and one of

37
00:02:16,480 --> 00:02:20,200
Speaker 1: those was a tech company called Control Video Corporation, which

38
00:02:20,240 --> 00:02:22,160
Speaker 1: I'll get to in just a moment, but first let's

39
00:02:22,160 --> 00:02:26,200
Speaker 1: talk about some of these other founders. James Verlin Kimsey

40
00:02:26,440 --> 00:02:30,360
Speaker 1: was born on September nineteen thirty nine. That would make

41
00:02:30,440 --> 00:02:33,320
Speaker 1: him the oldest of the co founders who would create

42
00:02:33,400 --> 00:02:36,800
Speaker 1: a o l He also attended, but did not graduate

43
00:02:36,840 --> 00:02:40,760
Speaker 1: from Georgetown University, so he and Meister had that in common.

44
00:02:41,200 --> 00:02:45,440
Speaker 1: He completed his education at West Point Academy. However, he

45
00:02:45,480 --> 00:02:49,080
Speaker 1: became an airborne ranger, in fact a decorated one. He

46
00:02:49,160 --> 00:02:52,960
Speaker 1: served three combat tours, two of which were in Vietnam,

47
00:02:53,040 --> 00:02:57,320
Speaker 1: and after the war he began purchasing or opening bars

48
00:02:57,320 --> 00:02:59,920
Speaker 1: and restaurants in the Washington, d c. Area. Became a

49
00:03:00,120 --> 00:03:03,800
Speaker 1: very successful businessman, and he was brought over to Control

50
00:03:03,919 --> 00:03:09,000
Speaker 1: Video Corporation to serve as a manufacturing consultant during some

51
00:03:09,080 --> 00:03:14,120
Speaker 1: troubled times. Control Video Corporation did not have a long history,

52
00:03:14,280 --> 00:03:17,560
Speaker 1: but it's certainly had a colorful one. Mark Saraf who

53
00:03:18,040 --> 00:03:19,880
Speaker 1: was one of the other co founders. He was born

54
00:03:19,919 --> 00:03:24,040
Speaker 1: on May five, ninety eight in Austin, Texas. He attended

55
00:03:24,040 --> 00:03:27,360
Speaker 1: the University of Texas. At Austin, he earned degrees in

56
00:03:27,400 --> 00:03:30,960
Speaker 1: computer science and mathematics, and then he would go on

57
00:03:31,080 --> 00:03:34,000
Speaker 1: to enroll in graduate studies at m I T and

58
00:03:34,000 --> 00:03:37,360
Speaker 1: he earned a master's degree in electrical engineering and computer science.

59
00:03:37,480 --> 00:03:40,920
Speaker 1: In nineteen seventy four, he took a job at Telenet

60
00:03:41,000 --> 00:03:44,720
Speaker 1: Communications Corporation, which in nineteen seventy five would become the

61
00:03:44,760 --> 00:03:48,760
Speaker 1: first packet switched network available to the general public. You

62
00:03:48,800 --> 00:03:50,920
Speaker 1: can think of it as one of the early backbones

63
00:03:50,960 --> 00:03:54,720
Speaker 1: of the Internet. So he was in early, early on

64
00:03:54,720 --> 00:03:57,680
Speaker 1: on the days of the Internet, before most people even

65
00:03:57,760 --> 00:04:01,680
Speaker 1: knew what such a thing was, decades before they knew

66
00:04:01,720 --> 00:04:04,120
Speaker 1: about it, in fact, and this was in the era

67
00:04:04,360 --> 00:04:08,000
Speaker 1: when the protocols for data transmission across the Internet we're

68
00:04:08,000 --> 00:04:11,000
Speaker 1: still being hammered out. Sarah would work for several tech

69
00:04:11,040 --> 00:04:14,040
Speaker 1: companies over the next few years, eventually moving over to

70
00:04:14,160 --> 00:04:19,799
Speaker 1: Control Video Corporation. Steve Case was born in Honolulu, Hawaii,

71
00:04:19,880 --> 00:04:23,479
Speaker 1: in nineteen fifty eight. Steve and his brother Dan were

72
00:04:23,720 --> 00:04:28,080
Speaker 1: entrepreneurial lee minded even at a young age. There's stories

73
00:04:28,120 --> 00:04:31,359
Speaker 1: about him and his brother operating a little juice stand

74
00:04:31,520 --> 00:04:35,280
Speaker 1: in Hawaii or selling greeting cards or seeds door to

75
00:04:35,400 --> 00:04:39,000
Speaker 1: door as children. Steve would attend Williams College in the

76
00:04:39,120 --> 00:04:41,760
Speaker 1: late seventies and early eighties. He would graduate in nineteen

77
00:04:41,800 --> 00:04:45,520
Speaker 1: eighty one with a degree in political science. After graduation,

78
00:04:45,680 --> 00:04:48,679
Speaker 1: Steve worked in the marketing department of Procter and Gamble,

79
00:04:48,960 --> 00:04:52,919
Speaker 1: and he later went and worked for Pepsi Coo, specifically

80
00:04:52,960 --> 00:04:56,520
Speaker 1: working as a head of marketing over at Pizza Hut,

81
00:04:56,720 --> 00:04:59,400
Speaker 1: or at least an executive of marketing over at Pizza Hut.

82
00:04:59,680 --> 00:05:02,800
Speaker 1: But I've to that his brother Dan introduced him to

83
00:05:02,839 --> 00:05:07,960
Speaker 1: the founders of Control Video Corporation. Over at C E. S.

84
00:05:07,960 --> 00:05:11,520
Speaker 1: Steve landed a gig with Control Video Corporation, which was

85
00:05:12,000 --> 00:05:16,080
Speaker 1: doing something really interesting, a really interesting business model that

86
00:05:16,080 --> 00:05:20,240
Speaker 1: would actually set the stage for America Online many years later. Now,

87
00:05:20,760 --> 00:05:23,039
Speaker 1: another element I need to mention before I get into

88
00:05:23,080 --> 00:05:26,080
Speaker 1: what Control Video Corporation was doing was a book that

89
00:05:26,200 --> 00:05:28,800
Speaker 1: Steve Case had read when he was a college student.

90
00:05:28,880 --> 00:05:31,800
Speaker 1: He thinks it was sometime around nineteen seventy nine. Is

91
00:05:31,800 --> 00:05:34,520
Speaker 1: a book that was written by a guy named Alvin Toffler,

92
00:05:34,600 --> 00:05:39,120
Speaker 1: and it's called The Third Wave. In that book, Toffler

93
00:05:39,120 --> 00:05:41,880
Speaker 1: describes a world in which computers would form a new

94
00:05:41,920 --> 00:05:47,440
Speaker 1: communication platform, a new revolution, a technological revolution akin to

95
00:05:47,600 --> 00:05:51,799
Speaker 1: the Industrial revolution, and it would allow for new digitally

96
00:05:51,839 --> 00:05:56,279
Speaker 1: oriented communities. Essentially, he was talking about the sort of

97
00:05:56,320 --> 00:05:59,600
Speaker 1: thing we would see in various Internet communities like forums

98
00:05:59,600 --> 00:06:03,560
Speaker 1: and things. That Case did not have an engineering background

99
00:06:03,680 --> 00:06:07,080
Speaker 1: or a programming background, but he thought this idea was

100
00:06:07,200 --> 00:06:09,960
Speaker 1: really compelling and it would become an important part of

101
00:06:10,040 --> 00:06:14,760
Speaker 1: his vision once he joined this company. So we now

102
00:06:14,839 --> 00:06:18,240
Speaker 1: know our major players, which really comes down to Steve Case,

103
00:06:18,320 --> 00:06:21,840
Speaker 1: Jim Kimsey, and Mark. Seraf von Meister is important, but

104
00:06:22,000 --> 00:06:24,880
Speaker 1: he was not part of the trio that would go

105
00:06:24,920 --> 00:06:26,840
Speaker 1: on to found the company that becomes a O L.

106
00:06:27,839 --> 00:06:32,640
Speaker 1: So what the heck did this Control Video Corporation do? Well?

107
00:06:33,120 --> 00:06:36,080
Speaker 1: I didn't know very much about this when I started

108
00:06:36,080 --> 00:06:38,039
Speaker 1: my research for this, which is funny to me because

109
00:06:38,080 --> 00:06:41,920
Speaker 1: I've talked about Atari a lot, and their their business

110
00:06:42,480 --> 00:06:46,120
Speaker 1: was deeply tied to Atari. And yet somehow I had

111
00:06:46,160 --> 00:06:48,400
Speaker 1: never come across this, or if I had, I had

112
00:06:48,400 --> 00:06:52,960
Speaker 1: forgotten about it. Control Video Corporation had created a product

113
00:06:53,040 --> 00:06:57,000
Speaker 1: called game Line for the AD, and again I had

114
00:06:57,040 --> 00:07:01,760
Speaker 1: never heard of this thing. Game Line was a cartridge,

115
00:07:02,040 --> 00:07:06,560
Speaker 1: a very large, misshapen cartridge. It didn't look like the

116
00:07:06,680 --> 00:07:09,040
Speaker 1: video game cartridges you would typically get if you wanted

117
00:07:09,040 --> 00:07:12,480
Speaker 1: to play a game of Pac Man or Pitfall. But

118
00:07:12,560 --> 00:07:16,120
Speaker 1: you would plug this cartridge into a t and it

119
00:07:16,160 --> 00:07:18,840
Speaker 1: would extend far out of it because it was so big,

120
00:07:19,400 --> 00:07:22,560
Speaker 1: and it had a port in it in which you

121
00:07:22,600 --> 00:07:26,520
Speaker 1: could plug a phone line, an old hard lined phone

122
00:07:26,560 --> 00:07:30,400
Speaker 1: connection to so This cartridge was part modem and part

123
00:07:30,520 --> 00:07:34,360
Speaker 1: storage device. Uh so you would plug it through the

124
00:07:34,440 --> 00:07:38,160
Speaker 1: normal cartridge port. It also had a battery that you

125
00:07:38,240 --> 00:07:39,800
Speaker 1: had to plug in. They had to put a nine

126
00:07:39,840 --> 00:07:44,880
Speaker 1: volt battery into this game line cartridge itself and then

127
00:07:45,840 --> 00:07:47,920
Speaker 1: plug it into your phone line and at that point,

128
00:07:47,960 --> 00:07:52,640
Speaker 1: your ATAR twenty could dial into the game Line service.

129
00:07:53,640 --> 00:07:56,320
Speaker 1: Game Line customers would get an account. You would have

130
00:07:56,360 --> 00:07:59,040
Speaker 1: a little form that would come or a card that

131
00:07:59,040 --> 00:08:01,760
Speaker 1: would come with your game line cartridge that would include

132
00:08:01,840 --> 00:08:06,280
Speaker 1: your personal identification number for that cartridge. If you logged

133
00:08:06,320 --> 00:08:10,880
Speaker 1: into the service, you would get access to games that

134
00:08:10,920 --> 00:08:14,320
Speaker 1: were available on that service, and then you could actually

135
00:08:14,440 --> 00:08:18,520
Speaker 1: use the game line to download games to your cartridge

136
00:08:18,560 --> 00:08:21,480
Speaker 1: to play on your AT twenty SID. So this was

137
00:08:21,600 --> 00:08:24,920
Speaker 1: incredibly forward thinking. This was a service all the way

138
00:08:24,960 --> 00:08:30,720
Speaker 1: back in three where you could download games to a console. Now,

139
00:08:30,720 --> 00:08:33,520
Speaker 1: it took me a bit to get my mind wrapped

140
00:08:33,520 --> 00:08:37,280
Speaker 1: around this because I'm familiar with the Atari twenty s.

141
00:08:37,920 --> 00:08:42,120
Speaker 1: The cartridges for the atwy dred are ROMs. That means

142
00:08:42,160 --> 00:08:45,640
Speaker 1: they're read only memory. You can't change them, at least

143
00:08:45,679 --> 00:08:49,280
Speaker 1: not without physically changing the cartridge. The games themselves are

144
00:08:49,440 --> 00:08:54,480
Speaker 1: hard coded in circuitry on the cartridges themselves. So the

145
00:08:54,520 --> 00:08:58,080
Speaker 1: physical layout of the components on the cartridge are what

146
00:08:58,240 --> 00:09:02,360
Speaker 1: make the game. It's not digital information stored in a

147
00:09:02,480 --> 00:09:07,480
Speaker 1: volatile medium that you can erase and and right over. Instead,

148
00:09:07,600 --> 00:09:12,480
Speaker 1: it's stuff that's physically etched in this cartridge. But the

149
00:09:12,520 --> 00:09:14,720
Speaker 1: game line was a little different. It's still had a

150
00:09:14,720 --> 00:09:18,079
Speaker 1: cartridge part that would plug into the console, but the

151
00:09:18,120 --> 00:09:21,560
Speaker 1: information was stored on microchips. They could store these small

152
00:09:21,600 --> 00:09:25,560
Speaker 1: amounts of information, not really big files. UH technology just

153
00:09:25,679 --> 00:09:29,240
Speaker 1: wasn't there to hold a lot of information, But games

154
00:09:29,240 --> 00:09:32,200
Speaker 1: were super small back in the early nine so this

155
00:09:32,280 --> 00:09:34,080
Speaker 1: was not a problem. Also, you needed it to be

156
00:09:34,120 --> 00:09:37,280
Speaker 1: small anyway, because these are games that are going to

157
00:09:37,280 --> 00:09:41,680
Speaker 1: be transmitted over phone lines and the speed of a

158
00:09:41,760 --> 00:09:46,000
Speaker 1: modem back in three was pretty slow. So the cartridge

159
00:09:46,000 --> 00:09:48,359
Speaker 1: part of the game line would act as this interface

160
00:09:48,440 --> 00:09:53,000
Speaker 1: between the game line and the UH. But the contents

161
00:09:53,040 --> 00:09:56,400
Speaker 1: of the cartridge could be changed by wiping and overwriting

162
00:09:56,400 --> 00:10:01,319
Speaker 1: the memory on those microchips. Pretty darn cool. Now, you

163
00:10:01,360 --> 00:10:04,240
Speaker 1: would have a limited number of plays per title that

164
00:10:04,360 --> 00:10:08,280
Speaker 1: you would essentially rent from game line, so you would

165
00:10:08,280 --> 00:10:11,240
Speaker 1: have a membership fee, and there was a per download fee.

166
00:10:11,280 --> 00:10:13,640
Speaker 1: It was just a dollar per game. So in a

167
00:10:13,640 --> 00:10:15,199
Speaker 1: way you'd think, oh, well, that's not bad. I've just

168
00:10:15,280 --> 00:10:16,880
Speaker 1: been a dollar and I get I get a copy

169
00:10:16,920 --> 00:10:20,360
Speaker 1: of this game. But again, that copy wouldn't last forever.

170
00:10:20,400 --> 00:10:22,760
Speaker 1: It would actually expire, and then if you wanted to

171
00:10:22,800 --> 00:10:24,920
Speaker 1: play the game again, you would have to rent it again,

172
00:10:25,760 --> 00:10:27,520
Speaker 1: and you would have to do that over and over

173
00:10:27,679 --> 00:10:31,040
Speaker 1: until you lost interest in playing that particular game. I

174
00:10:31,080 --> 00:10:34,560
Speaker 1: guess the company had plans to create similar services that

175
00:10:34,600 --> 00:10:38,320
Speaker 1: would be operated over the phone, including banking services and

176
00:10:38,440 --> 00:10:41,680
Speaker 1: news feed services, so you would get cartridges for those

177
00:10:41,679 --> 00:10:45,160
Speaker 1: specific applications. You wouldn't use your game line to access

178
00:10:45,200 --> 00:10:48,480
Speaker 1: it necessarily. You would have a news line cartridge that

179
00:10:48,480 --> 00:10:50,599
Speaker 1: you would plug into your atari and then you'll be

180
00:10:50,640 --> 00:10:53,280
Speaker 1: able to read the news. So sort of a proto

181
00:10:53,480 --> 00:10:58,720
Speaker 1: internet service. Well, the idea was incredibly prescient. It was

182
00:10:58,800 --> 00:11:01,640
Speaker 1: all the sort of services that we would associate with

183
00:11:01,720 --> 00:11:05,640
Speaker 1: online service providers and later internet service and there were

184
00:11:05,679 --> 00:11:10,440
Speaker 1: only a couple of online service provider like businesses in

185
00:11:10,520 --> 00:11:14,040
Speaker 1: operation in the early eighties. Compu Serve, which we'll talk

186
00:11:14,080 --> 00:11:17,200
Speaker 1: about as well in these episodes was one of them,

187
00:11:17,240 --> 00:11:21,480
Speaker 1: but there weren't a lot, so this was pretty new stuff.

188
00:11:22,400 --> 00:11:25,920
Speaker 1: Game Line didn't take off in a huge way, probably

189
00:11:25,960 --> 00:11:28,240
Speaker 1: for quite a few reasons. One of the big ones

190
00:11:28,280 --> 00:11:30,920
Speaker 1: was that the service was not able to secure licensing

191
00:11:30,960 --> 00:11:34,880
Speaker 1: deals with the largest game publishers for the Atari twenty

192
00:11:34,880 --> 00:11:37,720
Speaker 1: six hundred, so they weren't able to land deals with

193
00:11:37,760 --> 00:11:41,720
Speaker 1: Atari or Activision, and that meant some of the biggest titles,

194
00:11:41,720 --> 00:11:45,280
Speaker 1: the most popular titles for those game consoles or for

195
00:11:45,320 --> 00:11:50,480
Speaker 1: the hundred specifically, just weren't available for game Line, so

196
00:11:51,000 --> 00:11:53,839
Speaker 1: that made it difficult. There were more than seventy games

197
00:11:54,160 --> 00:11:58,920
Speaker 1: available on game Line, but these were mostly you know,

198
00:11:59,320 --> 00:12:01,920
Speaker 1: third or four tier games. Some of them were only

199
00:12:01,960 --> 00:12:05,440
Speaker 1: available on game Line, but again, they weren't the big names.

200
00:12:05,440 --> 00:12:08,719
Speaker 1: It wasn't the Pitfalls or the River Raids. Then the

201
00:12:08,840 --> 00:12:11,400
Speaker 1: video game crash of nineteen eight three happened. This was

202
00:12:11,480 --> 00:12:13,880
Speaker 1: the other reason game Line wasn't able to take off,

203
00:12:14,240 --> 00:12:18,240
Speaker 1: because the entire industry crumbled. It imploded. It pretty much

204
00:12:18,240 --> 00:12:22,360
Speaker 1: wiped out the Atar as a console. You didn't have

205
00:12:22,400 --> 00:12:25,800
Speaker 1: anyone who could sell the darned things. Not to mention

206
00:12:26,160 --> 00:12:29,920
Speaker 1: other competing video game consoles and companies, they all started

207
00:12:29,960 --> 00:12:32,280
Speaker 1: to suffer. Anyone who was making a home video game

208
00:12:32,320 --> 00:12:37,960
Speaker 1: console ine was in serious trouble. Or whose business depended

209
00:12:38,040 --> 00:12:41,440
Speaker 1: upon making games for those consoles, they were in trouble too,

210
00:12:42,000 --> 00:12:45,959
Speaker 1: So in nine four and eight five, the Control Video

211
00:12:46,000 --> 00:12:51,559
Speaker 1: Corporation sort of fizzled. It disbanded, but then it coalesced

212
00:12:51,640 --> 00:12:55,240
Speaker 1: into a new company. Now at this point, von Meister

213
00:12:55,559 --> 00:12:59,760
Speaker 1: quietly bowed out. Once the Control Video Corporation was really

214
00:12:59,760 --> 00:13:03,280
Speaker 1: starting to fall apart because of the video game industry

215
00:13:03,440 --> 00:13:09,000
Speaker 1: going to pieces, he extracted himself. But the new business

216
00:13:09,040 --> 00:13:12,719
Speaker 1: that formed out of the ashes of Control Video Corporation

217
00:13:13,160 --> 00:13:18,199
Speaker 1: was called Quantum Computer Services. Only ten of the employees

218
00:13:18,559 --> 00:13:21,560
Speaker 1: from Control Video Corporation would still have a job with

219
00:13:21,640 --> 00:13:25,840
Speaker 1: this new company, So the CEO of Quantum Computer Services

220
00:13:25,960 --> 00:13:29,600
Speaker 1: was Jim Kimsey. Mark Saraph would serve as the chief

221
00:13:29,600 --> 00:13:32,960
Speaker 1: technology officer, and Steve kay still had a job too

222
00:13:33,000 --> 00:13:37,199
Speaker 1: as the head of marketing. But Kimsey also recognized case

223
00:13:37,280 --> 00:13:39,600
Speaker 1: while he wasn't a tech guy, he wasn't the guy

224
00:13:39,720 --> 00:13:44,280
Speaker 1: to engineer a system or program something. He really had

225
00:13:44,320 --> 00:13:47,160
Speaker 1: a good handle on the business side and the marketing

226
00:13:47,160 --> 00:13:50,120
Speaker 1: side of things, and so Kimsey thought, this is a

227
00:13:50,120 --> 00:13:53,320
Speaker 1: guy I need to groom to become the head of

228
00:13:53,360 --> 00:13:57,400
Speaker 1: the company once I'm ready to hand over control, and

229
00:13:57,520 --> 00:14:00,120
Speaker 1: that would be the case. I've got a lot were

230
00:14:00,160 --> 00:14:02,599
Speaker 1: to say about the early days of a o L,

231
00:14:02,679 --> 00:14:05,360
Speaker 1: but first let's take a quick break to thank our sponsor.

232
00:14:13,120 --> 00:14:16,760
Speaker 1: This new company, Quantum Computer Services, took a lot of

233
00:14:16,840 --> 00:14:21,000
Speaker 1: inspiration from the strategy they used with the Atari twenty hundred,

234
00:14:21,120 --> 00:14:23,320
Speaker 1: but obviously they weren't going to be able to cater

235
00:14:23,400 --> 00:14:27,480
Speaker 1: to that audience that had imploded. So instead they started

236
00:14:27,520 --> 00:14:31,480
Speaker 1: to look at the burgeoning personal computer industry and they

237
00:14:31,520 --> 00:14:35,960
Speaker 1: targeted the Commodore sixty four community. Personal computers were succeeding

238
00:14:36,080 --> 00:14:40,680
Speaker 1: where video game consoles had failed. On May one, Quantum

239
00:14:40,680 --> 00:14:45,440
Speaker 1: Computer Services launched q link are sometimes called Quantum Link,

240
00:14:45,840 --> 00:14:49,000
Speaker 1: which was essentially an online bulletin board service. And I've

241
00:14:49,040 --> 00:14:52,440
Speaker 1: talked about bulletin board services or bbs is in the past,

242
00:14:52,480 --> 00:14:56,240
Speaker 1: but here's a super quick refresher. With the BBS, you

243
00:14:56,360 --> 00:14:59,640
Speaker 1: have somebody who is acting as host. They have a

244
00:14:59,640 --> 00:15:03,040
Speaker 1: computer eader, and they install software on that computer to

245
00:15:03,120 --> 00:15:07,200
Speaker 1: let it be a host for other machines. This computer

246
00:15:07,520 --> 00:15:11,240
Speaker 1: holds all the files that visitors to the BBS will

247
00:15:11,280 --> 00:15:14,080
Speaker 1: be able to interact with, whether they're just reading things,

248
00:15:14,200 --> 00:15:17,280
Speaker 1: or they can download stuff or upload stuff. This computer

249
00:15:17,480 --> 00:15:20,960
Speaker 1: is the home for all of that. Users can direct

250
00:15:21,040 --> 00:15:25,400
Speaker 1: their own personal computers to visit this BBS. They run

251
00:15:26,120 --> 00:15:29,560
Speaker 1: user interface software, a special program that allows them to

252
00:15:29,600 --> 00:15:33,200
Speaker 1: do this, and that also involves dialing a phone number

253
00:15:33,240 --> 00:15:36,480
Speaker 1: connected to the BBS using a dial up modem. So

254
00:15:36,520 --> 00:15:40,040
Speaker 1: the BBS is essentially answering a phone call from another computer,

255
00:15:40,520 --> 00:15:43,080
Speaker 1: and then those two computers have a conversation, just like

256
00:15:43,120 --> 00:15:47,200
Speaker 1: two humans would acceptance data instead of voice or sound.

257
00:15:47,960 --> 00:15:50,600
Speaker 1: This is on a very small scale, similar to what

258
00:15:50,720 --> 00:15:55,200
Speaker 1: happens on the Internet, but this represents a direct connection

259
00:15:55,480 --> 00:15:59,640
Speaker 1: between one computer and another, a client computer and the

260
00:15:59,720 --> 00:16:03,040
Speaker 1: sir for a computer, there's no network there, so the

261
00:16:03,040 --> 00:16:05,840
Speaker 1: connections only passing through the circuits of the phone system

262
00:16:05,920 --> 00:16:09,160
Speaker 1: and otherwise it's a direct connect from computer A to

263
00:16:09,200 --> 00:16:12,280
Speaker 1: computer b so q Link was a service in which

264
00:16:12,320 --> 00:16:16,480
Speaker 1: Commodore sixty four users could subscribe and access various features,

265
00:16:16,640 --> 00:16:20,720
Speaker 1: which included stuff like an electronic mail system that other

266
00:16:21,040 --> 00:16:26,240
Speaker 1: users could participate in, chat features, some file sharing capabilities,

267
00:16:26,320 --> 00:16:31,880
Speaker 1: and some networked games. You were restricted to other Commodore

268
00:16:31,960 --> 00:16:34,520
Speaker 1: sixty four owners who were also using the service. You

269
00:16:34,560 --> 00:16:37,640
Speaker 1: could not use q link to connect with people who

270
00:16:37,680 --> 00:16:41,440
Speaker 1: are using competing services. There was no inner connectivity. It

271
00:16:41,520 --> 00:16:44,680
Speaker 1: cost about ten dollars a month to subscribe to this service,

272
00:16:44,760 --> 00:16:47,280
Speaker 1: and if you wanted to use most of the features,

273
00:16:47,760 --> 00:16:50,520
Speaker 1: there was an additional charge of several cents per minute,

274
00:16:50,600 --> 00:16:53,520
Speaker 1: like six to eight cents per minute after the first

275
00:16:53,560 --> 00:16:56,680
Speaker 1: hour of use each month. So if you subscribed, you

276
00:16:56,720 --> 00:17:01,520
Speaker 1: would typically get sixty minutes of uh plus service is

277
00:17:01,560 --> 00:17:04,840
Speaker 1: what they called it, wrapped up in that and beyond

278
00:17:04,960 --> 00:17:07,320
Speaker 1: sixty minutes he would have to start paying per minute

279
00:17:07,440 --> 00:17:10,679
Speaker 1: of use. Steve Case would work super hard in his

280
00:17:10,760 --> 00:17:13,919
Speaker 1: division to promote que link and get more Commodore sixty

281
00:17:13,920 --> 00:17:17,440
Speaker 1: four users on board. Eventually the company would have about

282
00:17:17,440 --> 00:17:23,159
Speaker 1: a hundred thousand subscribers using Commonore sixty four accounts. Now,

283
00:17:23,960 --> 00:17:26,000
Speaker 1: for the next few bits of information, the next few

284
00:17:26,080 --> 00:17:28,919
Speaker 1: dates I'm going to talk about, there's somewhat muddled. I

285
00:17:28,960 --> 00:17:32,720
Speaker 1: went through a lot of different sources while researching these episodes,

286
00:17:33,440 --> 00:17:35,199
Speaker 1: and the problem is that there are a lot of

287
00:17:35,200 --> 00:17:39,440
Speaker 1: sources that have slightly different dates for when things happened.

288
00:17:39,840 --> 00:17:45,560
Speaker 1: So rather than say definitively that X happened on Y date,

289
00:17:45,640 --> 00:17:47,880
Speaker 1: I'm going to do my best but keep in mind

290
00:17:48,280 --> 00:17:50,360
Speaker 1: some of these could be off by a year one

291
00:17:50,400 --> 00:17:53,160
Speaker 1: way or another, because no one seems to agree on

292
00:17:53,200 --> 00:17:59,560
Speaker 1: when everything actually happened. So circa n Quantum Services, Quantum

293
00:17:59,560 --> 00:18:05,639
Speaker 1: Computers Services expanded by creating similar products called PC link

294
00:18:05,840 --> 00:18:08,840
Speaker 1: and apple Link. They had essentially the same sort of

295
00:18:08,840 --> 00:18:12,119
Speaker 1: features as q link did for a Commodore sixty fours,

296
00:18:12,119 --> 00:18:16,520
Speaker 1: but these were for Apple and IBM compatible computers. They

297
00:18:16,560 --> 00:18:20,880
Speaker 1: also created a service for Tandy computer owners to take

298
00:18:20,880 --> 00:18:23,240
Speaker 1: advantage of the same sort of stuff that q link

299
00:18:23,440 --> 00:18:27,439
Speaker 1: customers had been using. However, these were not interoperable. You

300
00:18:27,480 --> 00:18:31,199
Speaker 1: couldn't use the computer on Apple Link and communicate with

301
00:18:31,240 --> 00:18:36,119
Speaker 1: someone on pc link, so these were all independent services.

302
00:18:36,440 --> 00:18:39,000
Speaker 1: You could communicate with anyone else who was on that service,

303
00:18:39,560 --> 00:18:43,159
Speaker 1: just not with on one of the other services. So

304
00:18:43,240 --> 00:18:46,800
Speaker 1: this again was not the Internet, but rather centralized servers

305
00:18:46,800 --> 00:18:51,600
Speaker 1: that customers were dialing into in order to access these features.

306
00:18:51,640 --> 00:18:56,560
Speaker 1: Sometime around the company launched its first instant messaging service,

307
00:18:57,080 --> 00:19:00,960
Speaker 1: a precursor to what would become a O L Instant

308
00:19:01,000 --> 00:19:04,720
Speaker 1: Messenger or AIM. I'll talk about AIM more later on

309
00:19:04,800 --> 00:19:08,840
Speaker 1: in this series of episodes. One other super important moment

310
00:19:09,119 --> 00:19:12,520
Speaker 1: happened around nine nine. According to the official A O.

311
00:19:12,680 --> 00:19:17,280
Speaker 1: L History, that's when the You've got mail alert debuted.

312
00:19:17,600 --> 00:19:19,560
Speaker 1: So if you've ever heard that phrase, it comes from

313
00:19:19,600 --> 00:19:23,199
Speaker 1: A O L. And specifically it comes from nine. The

314
00:19:23,200 --> 00:19:26,560
Speaker 1: phrase would become iconic in the early days of the Internet.

315
00:19:26,840 --> 00:19:29,680
Speaker 1: It became a bit of a cultural meme. Folks would

316
00:19:29,680 --> 00:19:32,480
Speaker 1: mimic the notification or they would use it as a

317
00:19:32,520 --> 00:19:37,000
Speaker 1: punchline to a joke. Later on, when people had smartphones

318
00:19:37,040 --> 00:19:40,960
Speaker 1: that can actually play sound bites, that would become some

319
00:19:41,000 --> 00:19:44,840
Speaker 1: people's message alert system, you've got mail. The man whose

320
00:19:44,920 --> 00:19:48,439
Speaker 1: voice says You've got mail for A O L is

321
00:19:48,840 --> 00:19:53,160
Speaker 1: Lwood Edwards. Now Edwards. His wife, who was a customer

322
00:19:53,240 --> 00:19:58,480
Speaker 1: service representative for Quantum Computer Services, had overheard Steve Case

323
00:19:58,560 --> 00:20:01,720
Speaker 1: say he really will that they could have a voice

324
00:20:01,760 --> 00:20:05,280
Speaker 1: component to the online service interfaces, that the company had

325
00:20:05,359 --> 00:20:10,600
Speaker 1: something to differentiate their service from other products. So she

326
00:20:10,760 --> 00:20:13,960
Speaker 1: came home and she told her husband, Elwood about this.

327
00:20:14,520 --> 00:20:19,040
Speaker 1: And Elwood was a voiceover performer as well as a broadcaster.

328
00:20:19,240 --> 00:20:24,679
Speaker 1: He had a history in this kind of thing. So he,

329
00:20:25,240 --> 00:20:28,040
Speaker 1: according to the story, went into his living room and

330
00:20:28,080 --> 00:20:30,800
Speaker 1: he got a cassette player, which was a thing back

331
00:20:30,840 --> 00:20:34,240
Speaker 1: in those days. And a cassette tape and he recorded

332
00:20:34,280 --> 00:20:37,600
Speaker 1: himself saying several phrases including welcome and you've got mail,

333
00:20:37,640 --> 00:20:39,880
Speaker 1: and lots of others, and then they sent it off

334
00:20:39,920 --> 00:20:43,360
Speaker 1: to Steve Case and he got the gig. He's obviously

335
00:20:43,400 --> 00:20:45,680
Speaker 1: done lots of other work. Like I said, he's had

336
00:20:45,680 --> 00:20:49,679
Speaker 1: a long history in broadcasting. But Steve Case liked it.

337
00:20:49,920 --> 00:20:52,320
Speaker 1: He said, this is the tone and the technique we want,

338
00:20:52,560 --> 00:20:55,399
Speaker 1: and they went with it. So the phrase would become

339
00:20:55,480 --> 00:20:59,520
Speaker 1: intrinsically linked with A O L Services In those days.

340
00:20:59,760 --> 00:21:02,040
Speaker 1: It was famous enough to become the title of a

341
00:21:02,119 --> 00:21:06,720
Speaker 1: romantic comedy film in n starring Tom Hanks and Meg Ryan.

342
00:21:07,280 --> 00:21:09,600
Speaker 1: A O L got a lot of mileage out of

343
00:21:09,600 --> 00:21:13,320
Speaker 1: those phrases. As for Elwood, in two thousand and sixteen,

344
00:21:13,400 --> 00:21:16,520
Speaker 1: he popped up in online culture after a woman named

345
00:21:16,560 --> 00:21:21,280
Speaker 1: Brandy Barker uploaded a video of Elwood cheerfully reprising his

346
00:21:21,400 --> 00:21:25,119
Speaker 1: famous line he was driving her around because Elwood had

347
00:21:25,119 --> 00:21:28,560
Speaker 1: sort of retired from broadcasting but was working part time

348
00:21:28,640 --> 00:21:32,159
Speaker 1: as an uber driver in Ohio. It's actually a sweet

349
00:21:32,200 --> 00:21:34,879
Speaker 1: little video if you look it up, and that's pretty

350
00:21:34,920 --> 00:21:40,960
Speaker 1: much everywhere online. By the leadership of Quantum Computer Services,

351
00:21:40,960 --> 00:21:44,400
Speaker 1: felt that the company needed a rebranding to better reflect

352
00:21:44,840 --> 00:21:48,440
Speaker 1: what it did what its products were. So Steve Case

353
00:21:48,480 --> 00:21:52,960
Speaker 1: held a contest internally to rename the company, and employees

354
00:21:52,960 --> 00:21:55,800
Speaker 1: got to vote on the various nominees, and the name

355
00:21:55,880 --> 00:21:59,320
Speaker 1: that went out over all the others was America Online,

356
00:21:59,800 --> 00:22:03,560
Speaker 1: and so Quantum Services Quantum Computer Services ditched its name

357
00:22:03,640 --> 00:22:07,439
Speaker 1: for a o L. That happened in nineteen Now a

358
00:22:07,560 --> 00:22:10,920
Speaker 1: o L was not the first online service provider, as

359
00:22:10,960 --> 00:22:13,639
Speaker 1: I said, the first of those came out more or

360
00:22:13,720 --> 00:22:17,040
Speaker 1: less in nineteen seventy nine. These dates are also kind

361
00:22:17,040 --> 00:22:20,560
Speaker 1: of fuzzy because it really depends upon when you would

362
00:22:20,560 --> 00:22:24,160
Speaker 1: consider the beginning of the service. There was some limited

363
00:22:24,280 --> 00:22:27,679
Speaker 1: services in nineteen seventy eight when you could call into

364
00:22:27,720 --> 00:22:31,480
Speaker 1: computers after a certain time because the computers during the

365
00:22:31,520 --> 00:22:33,399
Speaker 1: day would be used for one purpose, but in the

366
00:22:33,480 --> 00:22:36,679
Speaker 1: evening they could, when they would otherwise be idle, they

367
00:22:36,680 --> 00:22:38,800
Speaker 1: could be put to use for this kind of stuff.

368
00:22:39,119 --> 00:22:42,159
Speaker 1: Seventy nine was really when things were starting to take effect,

369
00:22:42,240 --> 00:22:45,520
Speaker 1: and one of those early services was compu Serve. One

370
00:22:45,560 --> 00:22:47,280
Speaker 1: of these days, I'm gonna have to do a full

371
00:22:47,320 --> 00:22:52,640
Speaker 1: episode just about compu Serve. Another one was called the source. Now,

372
00:22:52,640 --> 00:22:55,960
Speaker 1: those services may have been what convinced William von Meister

373
00:22:56,160 --> 00:22:58,879
Speaker 1: to launch Control Video Corporation in the first place in

374
00:22:58,960 --> 00:23:01,600
Speaker 1: ninety three. Might have thought, I want to do the

375
00:23:01,640 --> 00:23:04,240
Speaker 1: same thing that they're doing with computers, but I'm going

376
00:23:04,280 --> 00:23:07,119
Speaker 1: to do it for home video game consoles because that

377
00:23:07,160 --> 00:23:10,640
Speaker 1: market is red hot. So copy serving the source. We're

378
00:23:10,680 --> 00:23:14,520
Speaker 1: pretty simple dial up services. Users could connect using a

379
00:23:14,560 --> 00:23:17,720
Speaker 1: dial up modem to a computer. Sometimes they might even

380
00:23:17,800 --> 00:23:21,159
Speaker 1: have to lift a telephone off of its cradle and

381
00:23:21,200 --> 00:23:24,679
Speaker 1: put it into a special other cradle that's connected to

382
00:23:24,720 --> 00:23:28,600
Speaker 1: the computer they're using. People who have used old modems

383
00:23:28,600 --> 00:23:31,919
Speaker 1: know what I'm talking about. The interfaces were text based.

384
00:23:32,000 --> 00:23:35,960
Speaker 1: They were not graphic user interfaces, both because computers weren't

385
00:23:36,000 --> 00:23:40,159
Speaker 1: really capable of displaying complex images, and also because it

386
00:23:40,240 --> 00:23:43,640
Speaker 1: cut down on how much data needed to go across

387
00:23:43,720 --> 00:23:46,560
Speaker 1: those phone lines and those modems. Because, like I said,

388
00:23:46,600 --> 00:23:50,960
Speaker 1: early modems had really limited data transfer capacities. You didn't

389
00:23:50,960 --> 00:23:53,240
Speaker 1: want to try and send a big file it would

390
00:23:53,240 --> 00:23:56,880
Speaker 1: take forever. Since the early days, the basic services were

391
00:23:56,880 --> 00:23:58,959
Speaker 1: pretty much what you would find if you had been

392
00:23:58,960 --> 00:24:01,560
Speaker 1: a que link user. Typically you'd have some sort of

393
00:24:01,600 --> 00:24:06,720
Speaker 1: electronic mail service bulletin boards or forums for discussion, news feeds,

394
00:24:06,720 --> 00:24:09,600
Speaker 1: that kind of thing. You were limited to communicating again

395
00:24:09,640 --> 00:24:11,960
Speaker 1: with the people who used the same service you did.

396
00:24:12,200 --> 00:24:15,159
Speaker 1: With some minor exceptions, there were some third parties that

397
00:24:15,240 --> 00:24:18,680
Speaker 1: offered up some cross service communication tools that would work

398
00:24:19,359 --> 00:24:23,040
Speaker 1: on services that had similar architectures. But for the most part,

399
00:24:23,160 --> 00:24:25,800
Speaker 1: you were limited to just your own community. You couldn't

400
00:24:25,880 --> 00:24:28,800
Speaker 1: chat with people who used other ones. The online service

401
00:24:28,800 --> 00:24:33,040
Speaker 1: providers might operate a network themselves, but that was an

402
00:24:33,040 --> 00:24:36,680
Speaker 1: internal network that you would connect to. They weren't interconnected

403
00:24:36,760 --> 00:24:39,680
Speaker 1: to other networks like the Internet is, so at least

404
00:24:39,720 --> 00:24:42,960
Speaker 1: at first, this wasn't about connecting to the Internet. It

405
00:24:43,000 --> 00:24:47,240
Speaker 1: was about connecting to a specific online service providers network.

406
00:24:47,840 --> 00:24:51,520
Speaker 1: So online service providers, you could argue, fit somewhere between

407
00:24:51,640 --> 00:24:57,119
Speaker 1: bulletin board services and the Internet. In scale, in a

408
00:24:57,280 --> 00:25:00,480
Speaker 1: o L held its initial public offering, That is, the

409
00:25:00,480 --> 00:25:03,880
Speaker 1: company made the change from being a privately owned company

410
00:25:03,920 --> 00:25:07,360
Speaker 1: to a publicly traded company. The first day of trading

411
00:25:07,359 --> 00:25:12,720
Speaker 1: on the Nasdaq Exchange was on March nineteenth two. The

412
00:25:12,760 --> 00:25:15,280
Speaker 1: opening price for a share of stock in a o

413
00:25:15,440 --> 00:25:18,840
Speaker 1: L was eleven dollars fifty cents. By the end of

414
00:25:18,880 --> 00:25:21,720
Speaker 1: that day, the stock price had closed at fourteen dollars

415
00:25:21,800 --> 00:25:24,720
Speaker 1: seventy five cents. That's an increase of twenty eight point

416
00:25:24,800 --> 00:25:28,040
Speaker 1: three percent, which isn't bad, and the number of shares

417
00:25:28,080 --> 00:25:30,040
Speaker 1: sold meant that A o L was able to raise

418
00:25:30,080 --> 00:25:34,080
Speaker 1: more than sixty million dollars in that process. A O

419
00:25:34,320 --> 00:25:38,320
Speaker 1: L and other online service providers like Prodigy since that

420
00:25:38,440 --> 00:25:41,720
Speaker 1: a more mainstream awareness of the Internet was right around

421
00:25:41,760 --> 00:25:44,200
Speaker 1: the corner, so they were preparing for this. They were

422
00:25:44,359 --> 00:25:47,280
Speaker 1: getting ready for what they envisioned as being an explosion

423
00:25:47,440 --> 00:25:50,320
Speaker 1: of interest in their services, and as it turns out,

424
00:25:50,680 --> 00:25:53,000
Speaker 1: A o L ended up being a little too modest

425
00:25:53,240 --> 00:25:57,160
Speaker 1: as far as expectations go. They would not scale up

426
00:25:57,200 --> 00:26:00,800
Speaker 1: to the size that they needed to, but they wouldn't

427
00:26:00,840 --> 00:26:05,159
Speaker 1: know that till later in according to time and they

428
00:26:05,160 --> 00:26:08,639
Speaker 1: should know more on that. In our next episode, A

429
00:26:08,800 --> 00:26:12,440
Speaker 1: o L introduced a new service in its suite. Users

430
00:26:12,440 --> 00:26:16,159
Speaker 1: could click on an option to access something pretty phenomenal,

431
00:26:16,720 --> 00:26:19,240
Speaker 1: and that would be the Internet. It would go from

432
00:26:19,280 --> 00:26:23,280
Speaker 1: being an online service provider that operated only its own

433
00:26:23,320 --> 00:26:26,720
Speaker 1: services to one that was a gateway to the information

434
00:26:26,880 --> 00:26:29,440
Speaker 1: super Highway. I have more to say about that, but

435
00:26:29,520 --> 00:26:40,160
Speaker 1: let's take another quick break to thank our sponsor. Now,

436
00:26:40,359 --> 00:26:43,920
Speaker 1: the Internet as a thing that the general public could

437
00:26:43,960 --> 00:26:48,520
Speaker 1: readily access has been around for nearly thirty years, but

438
00:26:48,640 --> 00:26:51,240
Speaker 1: before that it was a network that only a relatively

439
00:26:51,320 --> 00:26:54,879
Speaker 1: small number of people knew about, let alone had access to.

440
00:26:55,440 --> 00:26:58,720
Speaker 1: If you were on the Internet before, let's say, you

441
00:26:58,720 --> 00:27:01,959
Speaker 1: were likely a college student didn't and most likely, if

442
00:27:01,960 --> 00:27:04,200
Speaker 1: you were a college student on the Internet, you were

443
00:27:04,240 --> 00:27:08,200
Speaker 1: probably enrolled in at least one computer science class. An

444
00:27:08,200 --> 00:27:11,560
Speaker 1: employee at a research facility might have access to the Internet.

445
00:27:11,600 --> 00:27:14,840
Speaker 1: People in the military had access to the Internet. They

446
00:27:15,080 --> 00:27:19,840
Speaker 1: also had access to millnet, the military specific network that

447
00:27:19,960 --> 00:27:23,479
Speaker 1: is built on the same architecture. So there were a

448
00:27:23,520 --> 00:27:25,880
Speaker 1: few ways that you might have access to the Internet,

449
00:27:26,200 --> 00:27:28,359
Speaker 1: but just a few. It was just it was not

450
00:27:28,840 --> 00:27:32,520
Speaker 1: readily accessible to the average person. Then you had these

451
00:27:32,560 --> 00:27:35,560
Speaker 1: online service providers go beyond their own internal networks to

452
00:27:35,640 --> 00:27:40,159
Speaker 1: connect to the network of networks. The reaction was not

453
00:27:40,680 --> 00:27:44,239
Speaker 1: overwhelmingly positive on for the people who were already on

454
00:27:44,280 --> 00:27:47,960
Speaker 1: the Internet. That is, veterans online were greeted by a

455
00:27:48,000 --> 00:27:51,080
Speaker 1: flood of new users who had no inkling of how

456
00:27:51,160 --> 00:27:54,080
Speaker 1: things would work on the Internet. They hadn't been part

457
00:27:54,240 --> 00:27:56,520
Speaker 1: of the culture that had been forming. They didn't know

458
00:27:56,600 --> 00:28:00,840
Speaker 1: the lingo. There were nubes, in other words, and the

459
00:28:00,920 --> 00:28:06,280
Speaker 1: veterans weren't necessarily kind to the nubs. They resented this

460
00:28:06,359 --> 00:28:09,040
Speaker 1: flood of the uninformed, who were way worse than the

461
00:28:09,119 --> 00:28:12,000
Speaker 1: annual introduction of college freshmen. Those were bad enough. These

462
00:28:12,000 --> 00:28:14,719
Speaker 1: people were even worse. There was a bit of an

463
00:28:14,760 --> 00:28:17,680
Speaker 1: online culture war. But then again, while I call this

464
00:28:17,760 --> 00:28:21,480
Speaker 1: a culture war, you have to remember at most this

465
00:28:21,560 --> 00:28:24,400
Speaker 1: effected maybe a million and a half two million people.

466
00:28:24,680 --> 00:28:27,920
Speaker 1: A o L didn't even have two thousand subscribers yet,

467
00:28:28,280 --> 00:28:31,159
Speaker 1: so most of the mainstream world had not dipped a

468
00:28:31,280 --> 00:28:34,199
Speaker 1: toe in the Internet and viewed the whole thing as

469
00:28:34,240 --> 00:28:37,639
Speaker 1: a big fuss with computer nerds, and I guess it

470
00:28:37,760 --> 00:28:41,880
Speaker 1: mostly was. But A o L was trying to expand

471
00:28:42,000 --> 00:28:45,760
Speaker 1: beyond that narrow niche of computer enthusiasts. They were trying

472
00:28:45,800 --> 00:28:49,200
Speaker 1: to encourage adoption of this, and to do it, the

473
00:28:49,240 --> 00:28:52,560
Speaker 1: company took on a new marketing strategy that became about

474
00:28:52,600 --> 00:28:55,800
Speaker 1: as famous as that You've Got mail line. A o

475
00:28:55,960 --> 00:28:59,400
Speaker 1: L began to produce c d s, compact discs that

476
00:28:59,440 --> 00:29:02,720
Speaker 1: could in all the A o L interface onto a computer,

477
00:29:03,520 --> 00:29:06,440
Speaker 1: and then they began to send those CDs out, They

478
00:29:06,480 --> 00:29:09,400
Speaker 1: put them in magazines and they would mail them directly

479
00:29:09,520 --> 00:29:12,920
Speaker 1: to home addresses, and it got a little out of hand.

480
00:29:13,440 --> 00:29:16,800
Speaker 1: Anyone who owned a computer, and some people who didn't

481
00:29:17,160 --> 00:29:21,240
Speaker 1: began to accumulate collections of A O L compact discs.

482
00:29:21,760 --> 00:29:25,000
Speaker 1: There were jokes about using them as Christmas decorations, or

483
00:29:25,120 --> 00:29:30,400
Speaker 1: coasters or Frisbees. They were everywhere. The strategy was pervasive,

484
00:29:30,880 --> 00:29:36,480
Speaker 1: it was annoying, and it was effective. In Jim Kimsey

485
00:29:36,520 --> 00:29:40,440
Speaker 1: retired as CEO, he stayed on board as the Chairman

486
00:29:40,480 --> 00:29:42,240
Speaker 1: of the board for A O L for a couple

487
00:29:42,320 --> 00:29:46,000
Speaker 1: more years. Steve Case became the new CEO. He had

488
00:29:46,040 --> 00:29:49,800
Speaker 1: proven his worth numerous times by positioning the company's services

489
00:29:49,800 --> 00:29:52,719
Speaker 1: in a way that appealed to the end user. One

490
00:29:52,720 --> 00:29:55,200
Speaker 1: of the big differentiators in the A o L service

491
00:29:55,280 --> 00:29:58,960
Speaker 1: compared to competitors like Prodigy and compu Serve, is that

492
00:29:59,080 --> 00:30:01,960
Speaker 1: A o L's folk was on the ability to create

493
00:30:02,040 --> 00:30:06,040
Speaker 1: communities online. That tied back to that book I talked

494
00:30:06,080 --> 00:30:08,480
Speaker 1: about earlier, the one that inspired Case. When he was

495
00:30:08,520 --> 00:30:11,320
Speaker 1: in his twenties. He had worked to make sure that

496
00:30:11,440 --> 00:30:14,440
Speaker 1: A o L services included features that made it easy

497
00:30:14,520 --> 00:30:19,040
Speaker 1: for users to connect with one another beyond superficial messages.

498
00:30:19,680 --> 00:30:24,560
Speaker 1: By comparison prodigies, services were mostly centered around shopping for

499
00:30:24,720 --> 00:30:28,360
Speaker 1: one thing. The service was largely funded by seers, and

500
00:30:28,480 --> 00:30:31,080
Speaker 1: copy Serve was viewed as more of a tool for

501
00:30:31,200 --> 00:30:34,440
Speaker 1: real tech heads, people who were deeply tied to the

502
00:30:34,440 --> 00:30:38,600
Speaker 1: world of information. It was considered the more geeky of

503
00:30:38,640 --> 00:30:41,640
Speaker 1: the various online service providers. A o L was marketed

504
00:30:41,680 --> 00:30:46,200
Speaker 1: as more user friendly, the service that the average person

505
00:30:46,440 --> 00:30:50,760
Speaker 1: could get hold of and understand in. A o L

506
00:30:50,880 --> 00:30:53,920
Speaker 1: established its own homepage on the Internet. It was an

507
00:30:53,920 --> 00:30:57,280
Speaker 1: online service provider, but the home page did not exist

508
00:30:57,360 --> 00:31:01,280
Speaker 1: till a o L dot com. So, as Steve Case

509
00:31:01,320 --> 00:31:04,120
Speaker 1: at the Helm, another big change was around the corner

510
00:31:04,240 --> 00:31:08,840
Speaker 1: that in retrospect seemed to presage a o l's meteoric rise,

511
00:31:09,280 --> 00:31:12,800
Speaker 1: and this was a change in how the company build customers.

512
00:31:12,960 --> 00:31:17,720
Speaker 1: It was all in pricing up to nineteen six, The

513
00:31:17,800 --> 00:31:21,479
Speaker 1: general approach was to charge users according to the amount

514
00:31:21,480 --> 00:31:24,600
Speaker 1: of time they spent on the service. The longer you

515
00:31:24,640 --> 00:31:27,600
Speaker 1: were on the service, the more you paid, so you're

516
00:31:27,600 --> 00:31:31,280
Speaker 1: paying by the minute. In nineteen ninety six, a o

517
00:31:31,440 --> 00:31:34,240
Speaker 1: L changed its pricing model to a flat fee of

518
00:31:34,360 --> 00:31:38,440
Speaker 1: nineteen dollars n cents for a month of service, so

519
00:31:38,520 --> 00:31:40,840
Speaker 1: it's twenty bucks a month, and you could go online

520
00:31:40,880 --> 00:31:43,600
Speaker 1: as much as you liked, for as long as you liked,

521
00:31:44,080 --> 00:31:47,480
Speaker 1: as many times as you liked within that month. That

522
00:31:47,720 --> 00:31:51,160
Speaker 1: definitely had an impact. At the end of nineteen, a

523
00:31:51,240 --> 00:31:55,440
Speaker 1: o L had grown to one million subscribers after introducing

524
00:31:55,440 --> 00:31:58,320
Speaker 1: this new pricing model. By the end of ninety six,

525
00:31:58,800 --> 00:32:03,160
Speaker 1: they were at five million users, an enormous jump. Such

526
00:32:03,160 --> 00:32:05,680
Speaker 1: a big jump in fact, that A o L's servers

527
00:32:05,720 --> 00:32:10,160
Speaker 1: had trouble with this increase in traffic. On August seven,

528
00:32:11,040 --> 00:32:14,760
Speaker 1: which was a Wednesday, in case you're curious, the service

529
00:32:14,800 --> 00:32:18,880
Speaker 1: crashed and it remained offline for about nineteen hours. It

530
00:32:18,960 --> 00:32:22,760
Speaker 1: was big enough to make the news. CBS News correspondent

531
00:32:22,960 --> 00:32:26,560
Speaker 1: Peter Van Sante called it quote the silence of the

532
00:32:26,680 --> 00:32:32,800
Speaker 1: techno nerds end quote harsh words Van sent now. According

533
00:32:32,840 --> 00:32:36,000
Speaker 1: to A O L, the cause of the problem officially

534
00:32:36,760 --> 00:32:40,280
Speaker 1: was that they were doing regular maintenance on A o

535
00:32:40,440 --> 00:32:43,280
Speaker 1: L servers and something went wrong and it took a

536
00:32:43,280 --> 00:32:47,840
Speaker 1: while to fix. But CBS News cited an unnamed analyst

537
00:32:47,960 --> 00:32:51,800
Speaker 1: with Jupiter Communications who alleged the real reason was that

538
00:32:51,880 --> 00:32:55,239
Speaker 1: A O L had failed to scale up operations and

539
00:32:55,360 --> 00:32:58,200
Speaker 1: keep pace with the increase in the number of users,

540
00:32:58,280 --> 00:33:01,480
Speaker 1: and so it was user overload that caused the problem.

541
00:33:01,520 --> 00:33:03,959
Speaker 1: If that's the case, it's a great problem to have,

542
00:33:04,200 --> 00:33:06,840
Speaker 1: because it's better to have to scramble to meet demand

543
00:33:07,240 --> 00:33:09,600
Speaker 1: than to have to hustle to get enough customers. Too.

544
00:33:09,640 --> 00:33:14,000
Speaker 1: Straight by, you want the problem of having more demand

545
00:33:14,040 --> 00:33:18,720
Speaker 1: than you have supply. Kimsey had stepped down in in

546
00:33:19,800 --> 00:33:23,120
Speaker 1: Mark Seraf, the other co founder, would resign his position

547
00:33:23,120 --> 00:33:25,840
Speaker 1: of senior vice president with the company and leave to

548
00:33:25,880 --> 00:33:28,400
Speaker 1: go do other stuff, which meant that out of the

549
00:33:28,480 --> 00:33:32,680
Speaker 1: three co founders, only Steve Case remained, although to be fair,

550
00:33:32,840 --> 00:33:35,640
Speaker 1: Kimsey was on the board of directors for a little bit.

551
00:33:36,160 --> 00:33:40,520
Speaker 1: In Bolstered by a growing customer base and a solid

552
00:33:40,560 --> 00:33:43,480
Speaker 1: performance in the stock market, A o L began to

553
00:33:43,560 --> 00:33:45,719
Speaker 1: stretch out a bit and made a move on one

554
00:33:45,800 --> 00:33:48,840
Speaker 1: of its major competitors, a company that had been around

555
00:33:48,880 --> 00:33:51,640
Speaker 1: much longer than a O L had It moved to

556
00:33:51,760 --> 00:33:56,360
Speaker 1: acquire compu Serve. The two companies had been competing fiercely

557
00:33:56,480 --> 00:34:00,800
Speaker 1: over customers for years. Sometimes one would offer special deals

558
00:34:00,960 --> 00:34:03,640
Speaker 1: to lure people away from the other service, then the

559
00:34:03,640 --> 00:34:06,000
Speaker 1: other service would do the same, and it went back

560
00:34:06,000 --> 00:34:09,400
Speaker 1: and forth year over year over year between the two companies.

561
00:34:09,640 --> 00:34:14,400
Speaker 1: AOL had the larger number of customers by far by

562
00:34:15,560 --> 00:34:18,759
Speaker 1: which is when this acquisition would become final. A o

563
00:34:18,880 --> 00:34:22,320
Speaker 1: L had around eleven million subscribers and compu Serve was

564
00:34:22,360 --> 00:34:25,520
Speaker 1: closer to two and a half million. The acquisition was

565
00:34:25,560 --> 00:34:29,520
Speaker 1: a little bit on the long and winding side. In

566
00:34:29,520 --> 00:34:34,319
Speaker 1: other words, it got complicated. So let's explain, because it's

567
00:34:34,360 --> 00:34:39,360
Speaker 1: one of those fascinating corporate maneuvers that as a person

568
00:34:39,400 --> 00:34:43,600
Speaker 1: who loves tech and has a history in liberal arts education,

569
00:34:44,520 --> 00:34:49,120
Speaker 1: this was new to me. So before the acquisition, copy

570
00:34:49,239 --> 00:34:53,000
Speaker 1: Serve was part of H and R Block, the tax

571
00:34:53,080 --> 00:34:57,040
Speaker 1: preparation company. H and R Block purchased compu Serve back

572
00:34:57,080 --> 00:35:01,160
Speaker 1: in nineteen eighty for like twenty million dollar ers. By

573
00:35:01,239 --> 00:35:04,680
Speaker 1: n seven, H and R Block was going through some

574
00:35:04,800 --> 00:35:09,160
Speaker 1: major changes at the executive level. They were having real issues,

575
00:35:09,400 --> 00:35:12,720
Speaker 1: which is a fascinating story in itself, and I can't

576
00:35:12,760 --> 00:35:14,880
Speaker 1: really tell it on tech stuff because it doesn't really

577
00:35:15,000 --> 00:35:17,319
Speaker 1: tie into tech, but maybe I'll tell it on the

578
00:35:17,360 --> 00:35:20,400
Speaker 1: brink one day because I think it's a fascinating story. Anyway,

579
00:35:21,520 --> 00:35:25,760
Speaker 1: they were going through some stuff. It got complicated Facebook style,

580
00:35:26,320 --> 00:35:28,920
Speaker 1: and so the board of directors for H and R

581
00:35:28,960 --> 00:35:31,440
Speaker 1: Block decided one of the things the company needed to

582
00:35:31,480 --> 00:35:35,279
Speaker 1: do in order to streamline stuff was divest itself of

583
00:35:35,360 --> 00:35:40,880
Speaker 1: Copy Serve. A L expressed interest right away, saying, we

584
00:35:40,960 --> 00:35:43,120
Speaker 1: would very much like to take that off your hands,

585
00:35:43,520 --> 00:35:45,880
Speaker 1: and we will make an offer, and they offered to

586
00:35:45,960 --> 00:35:49,240
Speaker 1: purchase the company with shares of a O L stock,

587
00:35:50,040 --> 00:35:53,440
Speaker 1: But the board rejected this offer. They didn't feel that

588
00:35:53,480 --> 00:35:56,719
Speaker 1: a O L stock was valuable enough for this to

589
00:35:56,760 --> 00:36:00,279
Speaker 1: make sense. They would prefer to either have stocks were

590
00:36:00,320 --> 00:36:06,440
Speaker 1: more um stable, more established, I guess is a good

591
00:36:06,440 --> 00:36:09,279
Speaker 1: way of putting it than a O L. Or they

592
00:36:09,280 --> 00:36:11,960
Speaker 1: wanted to do it in cash. A couldn't do it

593
00:36:12,000 --> 00:36:15,080
Speaker 1: in cash. But then a third company came into the picture.

594
00:36:15,520 --> 00:36:18,800
Speaker 1: This third company was World Calm, which is another company

595
00:36:18,960 --> 00:36:20,960
Speaker 1: I'm going to have to cover at some future point.

596
00:36:21,520 --> 00:36:24,319
Speaker 1: World Calm had an offer for both H and R

597
00:36:24,360 --> 00:36:28,560
Speaker 1: Block and A O L. World Colm offered to buy

598
00:36:28,640 --> 00:36:31,960
Speaker 1: Copy Serve from H and R. In exchange, World Calm

599
00:36:32,120 --> 00:36:35,279
Speaker 1: would give up some of its stock. That stock was

600
00:36:35,320 --> 00:36:38,440
Speaker 1: seen as being more stable and more valuable than a

601
00:36:38,520 --> 00:36:40,920
Speaker 1: O L stock, and H and R thought, well, we

602
00:36:40,960 --> 00:36:43,200
Speaker 1: can turn that around and sell it right away and

603
00:36:43,560 --> 00:36:45,960
Speaker 1: get the money we want. So the H and R

604
00:36:46,000 --> 00:36:49,680
Speaker 1: Block board agreed to that term, and Company Serve was

605
00:36:49,800 --> 00:36:54,360
Speaker 1: sold to World Calm for one point to billion dollars

606
00:36:54,440 --> 00:36:57,479
Speaker 1: worth of World Calm shares, which H and R Block

607
00:36:57,560 --> 00:37:01,800
Speaker 1: then sold the very next day. After this exchange between

608
00:37:01,800 --> 00:37:05,440
Speaker 1: world Common H and R world Coms sold part of

609
00:37:05,520 --> 00:37:09,120
Speaker 1: compu Serve to a o L. Specifically, it's sold the

610
00:37:09,160 --> 00:37:14,040
Speaker 1: information services part of compu Serve, and it retained compu

611
00:37:14,160 --> 00:37:18,000
Speaker 1: serves network services business because that's the business that World

612
00:37:18,040 --> 00:37:22,440
Speaker 1: com is in, is in network technologies. In addition, a

613
00:37:22,560 --> 00:37:27,160
Speaker 1: o L sold to World Calm its own Advanced Network

614
00:37:27,320 --> 00:37:31,200
Speaker 1: Services division. So World Colm gets the network parts of

615
00:37:31,280 --> 00:37:34,880
Speaker 1: compu Serve and a O L. A o L gets

616
00:37:34,920 --> 00:37:39,799
Speaker 1: compu Serves information systems divisions. World Colm gets a lot

617
00:37:39,840 --> 00:37:42,319
Speaker 1: more of the market share for its business, a O

618
00:37:42,480 --> 00:37:45,960
Speaker 1: L gets more dominant position for its business, and H

619
00:37:46,040 --> 00:37:50,120
Speaker 1: and R Block can count a whole lot of money,

620
00:37:50,880 --> 00:37:54,120
Speaker 1: which is what I understand they're quite good at doing.

621
00:37:55,120 --> 00:37:57,920
Speaker 1: So pretty interesting. Plus, I mean, if you look at

622
00:37:58,000 --> 00:38:01,760
Speaker 1: H and R Block, they made a heck of a deal.

623
00:38:02,080 --> 00:38:04,840
Speaker 1: They had paid twenty million dollars for compu Serve in

624
00:38:04,960 --> 00:38:09,680
Speaker 1: nineteen Then two decades later they sell it for one

625
00:38:09,719 --> 00:38:13,320
Speaker 1: point to billion dollars and compu Serve had been making

626
00:38:13,360 --> 00:38:18,680
Speaker 1: profits in those years in between. So incredible deal for

627
00:38:18,840 --> 00:38:21,920
Speaker 1: H and R. Block A o L. Had secured its place,

628
00:38:22,600 --> 00:38:25,799
Speaker 1: or so it seemed. It had eclipsed a former competitor,

629
00:38:26,080 --> 00:38:29,600
Speaker 1: and it had even brought that company to heal. Sure,

630
00:38:29,880 --> 00:38:33,520
Speaker 1: there were some compu Serve customers who weren't crazy about

631
00:38:33,600 --> 00:38:36,480
Speaker 1: the whole thing, but the future was bright. The rapid

632
00:38:36,600 --> 00:38:41,279
Speaker 1: rise of the company was guaranteed to continue, wasn't it.

633
00:38:42,480 --> 00:38:44,879
Speaker 1: We'll find out in our next episode. If you guys

634
00:38:44,920 --> 00:38:48,279
Speaker 1: have any suggestions for future episodes of tech Stuff, whether

635
00:38:48,360 --> 00:38:52,000
Speaker 1: it's a company, a technology person in tech, maybe there's

636
00:38:52,080 --> 00:38:54,520
Speaker 1: just a moment in tech history you would really like

637
00:38:54,600 --> 00:38:57,040
Speaker 1: me to focus on. Let me know. Send me an email.

638
00:38:57,080 --> 00:39:01,560
Speaker 1: The address is tech Stuff at how stuff works dot com,

639
00:39:01,640 --> 00:39:04,200
Speaker 1: or head on over to our website that's tech Stuff

640
00:39:04,239 --> 00:39:07,239
Speaker 1: Podcast dot com. There you're gonna find other ways to

641
00:39:07,280 --> 00:39:10,640
Speaker 1: contact us, like through social media. Also, don't forget to

642
00:39:10,719 --> 00:39:13,440
Speaker 1: pop on over to our merchandise store that's over at

643
00:39:13,520 --> 00:39:17,120
Speaker 1: t public dot com. Slash tech Stuff every purchase you

644
00:39:17,160 --> 00:39:19,080
Speaker 1: make there goes to help the show, and we greatly

645
00:39:19,120 --> 00:39:22,600
Speaker 1: appreciate it. And I'll talk to you again really soon

646
00:39:28,080 --> 00:39:30,520
Speaker 1: for more on this and thousands of other topics. Is

647
00:39:30,520 --> 00:39:41,560
Speaker 1: that how stuff works dot com