WEBVTT - The Birth of AOL

0:00:00.080 --> 0:00:02.560
<v Speaker 1>Hey there, and welcome to Tech Stuff. I'm your host,

0:00:02.759 --> 0:00:06.520
<v Speaker 1>Jonathan Strickland. I'm an executive producer and I Heeart Radio

0:00:06.600 --> 0:00:12.520
<v Speaker 1>and I love all things tech. And there was a

0:00:12.560 --> 0:00:15.040
<v Speaker 1>company that was so closely tied to the idea of

0:00:15.040 --> 0:00:18.200
<v Speaker 1>connecting to the Internet that for some people it was

0:00:18.239 --> 0:00:22.320
<v Speaker 1>synonymous with the Internet. It show. I'm talking about America

0:00:22.360 --> 0:00:26.000
<v Speaker 1>Online or A O L, which is still around, but

0:00:26.160 --> 0:00:28.400
<v Speaker 1>we're talking about the early days, and A O L

0:00:28.480 --> 0:00:31.960
<v Speaker 1>grew into a giant force of a company. It was

0:00:32.000 --> 0:00:35.040
<v Speaker 1>part of a merger that many people have described in

0:00:35.080 --> 0:00:37.680
<v Speaker 1>the wake of that merger as being the worst deal

0:00:37.800 --> 0:00:40.559
<v Speaker 1>in the history of tech mergers. So we're gonna look

0:00:40.560 --> 0:00:43.720
<v Speaker 1>at the history of this company and where things are today.

0:00:44.000 --> 0:00:47.080
<v Speaker 1>So in this episode will look specifically at how that

0:00:47.120 --> 0:00:50.279
<v Speaker 1>company came to be and how it grew in the

0:00:50.320 --> 0:00:56.480
<v Speaker 1>early years. Our story concerns several co founders. Frequently, if

0:00:56.480 --> 0:00:58.680
<v Speaker 1>you look at stories about A O L, they'll talk

0:00:58.720 --> 0:01:01.560
<v Speaker 1>about one of these co found unders over all the others.

0:01:01.560 --> 0:01:05.200
<v Speaker 1>But they are very important, each and every one of them.

0:01:05.440 --> 0:01:10.000
<v Speaker 1>So first we have William F. Von Meister, who founded

0:01:10.040 --> 0:01:12.440
<v Speaker 1>a startup that would give birth to A O L.

0:01:12.560 --> 0:01:14.480
<v Speaker 1>He would not be part of a o L itself,

0:01:14.920 --> 0:01:18.000
<v Speaker 1>but a o L would grow out of a company

0:01:18.040 --> 0:01:23.800
<v Speaker 1>that Maister had built, and the co founders would include

0:01:23.920 --> 0:01:28.280
<v Speaker 1>three men who worked for this startup. UH. The startup

0:01:28.319 --> 0:01:32.440
<v Speaker 1>was called Control Video Corporation. Those three men were Steve case,

0:01:32.959 --> 0:01:38.160
<v Speaker 1>Mark Seraf and Jim Kimsey. William F. Von Meister was

0:01:38.240 --> 0:01:42.280
<v Speaker 1>born in New York City. He his father had worked

0:01:42.280 --> 0:01:46.520
<v Speaker 1>for the Zeppelin Company, infamous for being the company that

0:01:46.520 --> 0:01:51.400
<v Speaker 1>would build the Hindenburg airship, the one that burst into

0:01:51.440 --> 0:01:55.200
<v Speaker 1>flame and gave birth to the OH the Humanity Line.

0:01:55.920 --> 0:02:00.200
<v Speaker 1>Von Meister was born on February twenty, nineteen two. He

0:02:00.280 --> 0:02:04.160
<v Speaker 1>attended private schools and he went to Georgetown University, but

0:02:04.280 --> 0:02:08.360
<v Speaker 1>he never graduated. Despite that, he was able to enroll

0:02:08.480 --> 0:02:12.639
<v Speaker 1>in the master's degree program for business over at American University,

0:02:12.720 --> 0:02:16.480
<v Speaker 1>and upon graduating, he founded many startups, and one of

0:02:16.480 --> 0:02:20.200
<v Speaker 1>those was a tech company called Control Video Corporation, which

0:02:20.240 --> 0:02:22.160
<v Speaker 1>I'll get to in just a moment, but first let's

0:02:22.160 --> 0:02:26.200
<v Speaker 1>talk about some of these other founders. James Verlin Kimsey

0:02:26.440 --> 0:02:30.360
<v Speaker 1>was born on September nineteen thirty nine. That would make

0:02:30.440 --> 0:02:33.320
<v Speaker 1>him the oldest of the co founders who would create

0:02:33.400 --> 0:02:36.800
<v Speaker 1>a o l He also attended, but did not graduate

0:02:36.840 --> 0:02:40.760
<v Speaker 1>from Georgetown University, so he and Meister had that in common.

0:02:41.200 --> 0:02:45.440
<v Speaker 1>He completed his education at West Point Academy. However, he

0:02:45.480 --> 0:02:49.080
<v Speaker 1>became an airborne ranger, in fact a decorated one. He

0:02:49.160 --> 0:02:52.960
<v Speaker 1>served three combat tours, two of which were in Vietnam,

0:02:53.040 --> 0:02:57.320
<v Speaker 1>and after the war he began purchasing or opening bars

0:02:57.320 --> 0:02:59.920
<v Speaker 1>and restaurants in the Washington, d c. Area. Became a

0:03:00.120 --> 0:03:03.800
<v Speaker 1>very successful businessman, and he was brought over to Control

0:03:03.919 --> 0:03:09.000
<v Speaker 1>Video Corporation to serve as a manufacturing consultant during some

0:03:09.080 --> 0:03:14.120
<v Speaker 1>troubled times. Control Video Corporation did not have a long history,

0:03:14.280 --> 0:03:17.560
<v Speaker 1>but it's certainly had a colorful one. Mark Saraf who

0:03:18.040 --> 0:03:19.880
<v Speaker 1>was one of the other co founders. He was born

0:03:19.919 --> 0:03:24.040
<v Speaker 1>on May five, ninety eight in Austin, Texas. He attended

0:03:24.040 --> 0:03:27.360
<v Speaker 1>the University of Texas. At Austin, he earned degrees in

0:03:27.400 --> 0:03:30.960
<v Speaker 1>computer science and mathematics, and then he would go on

0:03:31.080 --> 0:03:34.000
<v Speaker 1>to enroll in graduate studies at m I T and

0:03:34.000 --> 0:03:37.360
<v Speaker 1>he earned a master's degree in electrical engineering and computer science.

0:03:37.480 --> 0:03:40.920
<v Speaker 1>In nineteen seventy four, he took a job at Telenet

0:03:41.000 --> 0:03:44.720
<v Speaker 1>Communications Corporation, which in nineteen seventy five would become the

0:03:44.760 --> 0:03:48.760
<v Speaker 1>first packet switched network available to the general public. You

0:03:48.800 --> 0:03:50.920
<v Speaker 1>can think of it as one of the early backbones

0:03:50.960 --> 0:03:54.720
<v Speaker 1>of the Internet. So he was in early, early on

0:03:54.720 --> 0:03:57.680
<v Speaker 1>on the days of the Internet, before most people even

0:03:57.760 --> 0:04:01.680
<v Speaker 1>knew what such a thing was, decades before they knew

0:04:01.720 --> 0:04:04.120
<v Speaker 1>about it, in fact, and this was in the era

0:04:04.360 --> 0:04:08.000
<v Speaker 1>when the protocols for data transmission across the Internet we're

0:04:08.000 --> 0:04:11.000
<v Speaker 1>still being hammered out. Sarah would work for several tech

0:04:11.040 --> 0:04:14.040
<v Speaker 1>companies over the next few years, eventually moving over to

0:04:14.160 --> 0:04:19.799
<v Speaker 1>Control Video Corporation. Steve Case was born in Honolulu, Hawaii,

0:04:19.880 --> 0:04:23.479
<v Speaker 1>in nineteen fifty eight. Steve and his brother Dan were

0:04:23.720 --> 0:04:28.080
<v Speaker 1>entrepreneurial lee minded even at a young age. There's stories

0:04:28.120 --> 0:04:31.359
<v Speaker 1>about him and his brother operating a little juice stand

0:04:31.520 --> 0:04:35.280
<v Speaker 1>in Hawaii or selling greeting cards or seeds door to

0:04:35.400 --> 0:04:39.000
<v Speaker 1>door as children. Steve would attend Williams College in the

0:04:39.120 --> 0:04:41.760
<v Speaker 1>late seventies and early eighties. He would graduate in nineteen

0:04:41.800 --> 0:04:45.520
<v Speaker 1>eighty one with a degree in political science. After graduation,

0:04:45.680 --> 0:04:48.679
<v Speaker 1>Steve worked in the marketing department of Procter and Gamble,

0:04:48.960 --> 0:04:52.919
<v Speaker 1>and he later went and worked for Pepsi Coo, specifically

0:04:52.960 --> 0:04:56.520
<v Speaker 1>working as a head of marketing over at Pizza Hut,

0:04:56.720 --> 0:04:59.400
<v Speaker 1>or at least an executive of marketing over at Pizza Hut.

0:04:59.680 --> 0:05:02.800
<v Speaker 1>But I've to that his brother Dan introduced him to

0:05:02.839 --> 0:05:07.960
<v Speaker 1>the founders of Control Video Corporation. Over at C E. S.

0:05:07.960 --> 0:05:11.520
<v Speaker 1>Steve landed a gig with Control Video Corporation, which was

0:05:12.000 --> 0:05:16.080
<v Speaker 1>doing something really interesting, a really interesting business model that

0:05:16.080 --> 0:05:20.240
<v Speaker 1>would actually set the stage for America Online many years later. Now,

0:05:20.760 --> 0:05:23.039
<v Speaker 1>another element I need to mention before I get into

0:05:23.080 --> 0:05:26.080
<v Speaker 1>what Control Video Corporation was doing was a book that

0:05:26.200 --> 0:05:28.800
<v Speaker 1>Steve Case had read when he was a college student.

0:05:28.880 --> 0:05:31.800
<v Speaker 1>He thinks it was sometime around nineteen seventy nine. Is

0:05:31.800 --> 0:05:34.520
<v Speaker 1>a book that was written by a guy named Alvin Toffler,

0:05:34.600 --> 0:05:39.120
<v Speaker 1>and it's called The Third Wave. In that book, Toffler

0:05:39.120 --> 0:05:41.880
<v Speaker 1>describes a world in which computers would form a new

0:05:41.920 --> 0:05:47.440
<v Speaker 1>communication platform, a new revolution, a technological revolution akin to

0:05:47.600 --> 0:05:51.799
<v Speaker 1>the Industrial revolution, and it would allow for new digitally

0:05:51.839 --> 0:05:56.279
<v Speaker 1>oriented communities. Essentially, he was talking about the sort of

0:05:56.320 --> 0:05:59.600
<v Speaker 1>thing we would see in various Internet communities like forums

0:05:59.600 --> 0:06:03.560
<v Speaker 1>and things. That Case did not have an engineering background

0:06:03.680 --> 0:06:07.080
<v Speaker 1>or a programming background, but he thought this idea was

0:06:07.200 --> 0:06:09.960
<v Speaker 1>really compelling and it would become an important part of

0:06:10.040 --> 0:06:14.760
<v Speaker 1>his vision once he joined this company. So we now

0:06:14.839 --> 0:06:18.240
<v Speaker 1>know our major players, which really comes down to Steve Case,

0:06:18.320 --> 0:06:21.840
<v Speaker 1>Jim Kimsey, and Mark. Seraf von Meister is important, but

0:06:22.000 --> 0:06:24.880
<v Speaker 1>he was not part of the trio that would go

0:06:24.920 --> 0:06:26.840
<v Speaker 1>on to found the company that becomes a O L.

0:06:27.839 --> 0:06:32.640
<v Speaker 1>So what the heck did this Control Video Corporation do? Well?

0:06:33.120 --> 0:06:36.080
<v Speaker 1>I didn't know very much about this when I started

0:06:36.080 --> 0:06:38.039
<v Speaker 1>my research for this, which is funny to me because

0:06:38.080 --> 0:06:41.920
<v Speaker 1>I've talked about Atari a lot, and their their business

0:06:42.480 --> 0:06:46.120
<v Speaker 1>was deeply tied to Atari. And yet somehow I had

0:06:46.160 --> 0:06:48.400
<v Speaker 1>never come across this, or if I had, I had

0:06:48.400 --> 0:06:52.960
<v Speaker 1>forgotten about it. Control Video Corporation had created a product

0:06:53.040 --> 0:06:57.000
<v Speaker 1>called game Line for the AD, and again I had

0:06:57.040 --> 0:07:01.760
<v Speaker 1>never heard of this thing. Game Line was a cartridge,

0:07:02.040 --> 0:07:06.560
<v Speaker 1>a very large, misshapen cartridge. It didn't look like the

0:07:06.680 --> 0:07:09.040
<v Speaker 1>video game cartridges you would typically get if you wanted

0:07:09.040 --> 0:07:12.480
<v Speaker 1>to play a game of Pac Man or Pitfall. But

0:07:12.560 --> 0:07:16.120
<v Speaker 1>you would plug this cartridge into a t and it

0:07:16.160 --> 0:07:18.840
<v Speaker 1>would extend far out of it because it was so big,

0:07:19.400 --> 0:07:22.560
<v Speaker 1>and it had a port in it in which you

0:07:22.600 --> 0:07:26.520
<v Speaker 1>could plug a phone line, an old hard lined phone

0:07:26.560 --> 0:07:30.400
<v Speaker 1>connection to so This cartridge was part modem and part

0:07:30.520 --> 0:07:34.360
<v Speaker 1>storage device. Uh so you would plug it through the

0:07:34.440 --> 0:07:38.160
<v Speaker 1>normal cartridge port. It also had a battery that you

0:07:38.240 --> 0:07:39.800
<v Speaker 1>had to plug in. They had to put a nine

0:07:39.840 --> 0:07:44.880
<v Speaker 1>volt battery into this game line cartridge itself and then

0:07:45.840 --> 0:07:47.920
<v Speaker 1>plug it into your phone line and at that point,

0:07:47.960 --> 0:07:52.640
<v Speaker 1>your ATAR twenty could dial into the game Line service.

0:07:53.640 --> 0:07:56.320
<v Speaker 1>Game Line customers would get an account. You would have

0:07:56.360 --> 0:07:59.040
<v Speaker 1>a little form that would come or a card that

0:07:59.040 --> 0:08:01.760
<v Speaker 1>would come with your game line cartridge that would include

0:08:01.840 --> 0:08:06.280
<v Speaker 1>your personal identification number for that cartridge. If you logged

0:08:06.320 --> 0:08:10.880
<v Speaker 1>into the service, you would get access to games that

0:08:10.920 --> 0:08:14.320
<v Speaker 1>were available on that service, and then you could actually

0:08:14.440 --> 0:08:18.520
<v Speaker 1>use the game line to download games to your cartridge

0:08:18.560 --> 0:08:21.480
<v Speaker 1>to play on your AT twenty SID. So this was

0:08:21.600 --> 0:08:24.920
<v Speaker 1>incredibly forward thinking. This was a service all the way

0:08:24.960 --> 0:08:30.720
<v Speaker 1>back in three where you could download games to a console. Now,

0:08:30.720 --> 0:08:33.520
<v Speaker 1>it took me a bit to get my mind wrapped

0:08:33.520 --> 0:08:37.280
<v Speaker 1>around this because I'm familiar with the Atari twenty s.

0:08:37.920 --> 0:08:42.120
<v Speaker 1>The cartridges for the atwy dred are ROMs. That means

0:08:42.160 --> 0:08:45.640
<v Speaker 1>they're read only memory. You can't change them, at least

0:08:45.679 --> 0:08:49.280
<v Speaker 1>not without physically changing the cartridge. The games themselves are

0:08:49.440 --> 0:08:54.480
<v Speaker 1>hard coded in circuitry on the cartridges themselves. So the

0:08:54.520 --> 0:08:58.080
<v Speaker 1>physical layout of the components on the cartridge are what

0:08:58.240 --> 0:09:02.360
<v Speaker 1>make the game. It's not digital information stored in a

0:09:02.480 --> 0:09:07.480
<v Speaker 1>volatile medium that you can erase and and right over. Instead,

0:09:07.600 --> 0:09:12.480
<v Speaker 1>it's stuff that's physically etched in this cartridge. But the

0:09:12.520 --> 0:09:14.720
<v Speaker 1>game line was a little different. It's still had a

0:09:14.720 --> 0:09:18.079
<v Speaker 1>cartridge part that would plug into the console, but the

0:09:18.120 --> 0:09:21.560
<v Speaker 1>information was stored on microchips. They could store these small

0:09:21.600 --> 0:09:25.560
<v Speaker 1>amounts of information, not really big files. UH technology just

0:09:25.679 --> 0:09:29.240
<v Speaker 1>wasn't there to hold a lot of information, But games

0:09:29.240 --> 0:09:32.200
<v Speaker 1>were super small back in the early nine so this

0:09:32.280 --> 0:09:34.080
<v Speaker 1>was not a problem. Also, you needed it to be

0:09:34.120 --> 0:09:37.280
<v Speaker 1>small anyway, because these are games that are going to

0:09:37.280 --> 0:09:41.680
<v Speaker 1>be transmitted over phone lines and the speed of a

0:09:41.760 --> 0:09:46.000
<v Speaker 1>modem back in three was pretty slow. So the cartridge

0:09:46.000 --> 0:09:48.359
<v Speaker 1>part of the game line would act as this interface

0:09:48.440 --> 0:09:53.000
<v Speaker 1>between the game line and the UH. But the contents

0:09:53.040 --> 0:09:56.400
<v Speaker 1>of the cartridge could be changed by wiping and overwriting

0:09:56.400 --> 0:10:01.319
<v Speaker 1>the memory on those microchips. Pretty darn cool. Now, you

0:10:01.360 --> 0:10:04.240
<v Speaker 1>would have a limited number of plays per title that

0:10:04.360 --> 0:10:08.280
<v Speaker 1>you would essentially rent from game line, so you would

0:10:08.280 --> 0:10:11.240
<v Speaker 1>have a membership fee, and there was a per download fee.

0:10:11.280 --> 0:10:13.640
<v Speaker 1>It was just a dollar per game. So in a

0:10:13.640 --> 0:10:15.199
<v Speaker 1>way you'd think, oh, well, that's not bad. I've just

0:10:15.280 --> 0:10:16.880
<v Speaker 1>been a dollar and I get I get a copy

0:10:16.920 --> 0:10:20.360
<v Speaker 1>of this game. But again, that copy wouldn't last forever.

0:10:20.400 --> 0:10:22.760
<v Speaker 1>It would actually expire, and then if you wanted to

0:10:22.800 --> 0:10:24.920
<v Speaker 1>play the game again, you would have to rent it again,

0:10:25.760 --> 0:10:27.520
<v Speaker 1>and you would have to do that over and over

0:10:27.679 --> 0:10:31.040
<v Speaker 1>until you lost interest in playing that particular game. I

0:10:31.080 --> 0:10:34.560
<v Speaker 1>guess the company had plans to create similar services that

0:10:34.600 --> 0:10:38.320
<v Speaker 1>would be operated over the phone, including banking services and

0:10:38.440 --> 0:10:41.680
<v Speaker 1>news feed services, so you would get cartridges for those

0:10:41.679 --> 0:10:45.160
<v Speaker 1>specific applications. You wouldn't use your game line to access

0:10:45.200 --> 0:10:48.480
<v Speaker 1>it necessarily. You would have a news line cartridge that

0:10:48.480 --> 0:10:50.599
<v Speaker 1>you would plug into your atari and then you'll be

0:10:50.640 --> 0:10:53.280
<v Speaker 1>able to read the news. So sort of a proto

0:10:53.480 --> 0:10:58.720
<v Speaker 1>internet service. Well, the idea was incredibly prescient. It was

0:10:58.800 --> 0:11:01.640
<v Speaker 1>all the sort of services that we would associate with

0:11:01.720 --> 0:11:05.640
<v Speaker 1>online service providers and later internet service and there were

0:11:05.679 --> 0:11:10.440
<v Speaker 1>only a couple of online service provider like businesses in

0:11:10.520 --> 0:11:14.040
<v Speaker 1>operation in the early eighties. Compu Serve, which we'll talk

0:11:14.080 --> 0:11:17.200
<v Speaker 1>about as well in these episodes was one of them,

0:11:17.240 --> 0:11:21.480
<v Speaker 1>but there weren't a lot, so this was pretty new stuff.

0:11:22.400 --> 0:11:25.920
<v Speaker 1>Game Line didn't take off in a huge way, probably

0:11:25.960 --> 0:11:28.240
<v Speaker 1>for quite a few reasons. One of the big ones

0:11:28.280 --> 0:11:30.920
<v Speaker 1>was that the service was not able to secure licensing

0:11:30.960 --> 0:11:34.880
<v Speaker 1>deals with the largest game publishers for the Atari twenty

0:11:34.880 --> 0:11:37.720
<v Speaker 1>six hundred, so they weren't able to land deals with

0:11:37.760 --> 0:11:41.720
<v Speaker 1>Atari or Activision, and that meant some of the biggest titles,

0:11:41.720 --> 0:11:45.280
<v Speaker 1>the most popular titles for those game consoles or for

0:11:45.320 --> 0:11:50.480
<v Speaker 1>the hundred specifically, just weren't available for game Line, so

0:11:51.000 --> 0:11:53.839
<v Speaker 1>that made it difficult. There were more than seventy games

0:11:54.160 --> 0:11:58.920
<v Speaker 1>available on game Line, but these were mostly you know,

0:11:59.320 --> 0:12:01.920
<v Speaker 1>third or four tier games. Some of them were only

0:12:01.960 --> 0:12:05.440
<v Speaker 1>available on game Line, but again, they weren't the big names.

0:12:05.440 --> 0:12:08.719
<v Speaker 1>It wasn't the Pitfalls or the River Raids. Then the

0:12:08.840 --> 0:12:11.400
<v Speaker 1>video game crash of nineteen eight three happened. This was

0:12:11.480 --> 0:12:13.880
<v Speaker 1>the other reason game Line wasn't able to take off,

0:12:14.240 --> 0:12:18.240
<v Speaker 1>because the entire industry crumbled. It imploded. It pretty much

0:12:18.240 --> 0:12:22.360
<v Speaker 1>wiped out the Atar as a console. You didn't have

0:12:22.400 --> 0:12:25.800
<v Speaker 1>anyone who could sell the darned things. Not to mention

0:12:26.160 --> 0:12:29.920
<v Speaker 1>other competing video game consoles and companies, they all started

0:12:29.960 --> 0:12:32.280
<v Speaker 1>to suffer. Anyone who was making a home video game

0:12:32.320 --> 0:12:37.960
<v Speaker 1>console ine was in serious trouble. Or whose business depended

0:12:38.040 --> 0:12:41.440
<v Speaker 1>upon making games for those consoles, they were in trouble too,

0:12:42.000 --> 0:12:45.959
<v Speaker 1>So in nine four and eight five, the Control Video

0:12:46.000 --> 0:12:51.559
<v Speaker 1>Corporation sort of fizzled. It disbanded, but then it coalesced

0:12:51.640 --> 0:12:55.240
<v Speaker 1>into a new company. Now at this point, von Meister

0:12:55.559 --> 0:12:59.760
<v Speaker 1>quietly bowed out. Once the Control Video Corporation was really

0:12:59.760 --> 0:13:03.280
<v Speaker 1>starting to fall apart because of the video game industry

0:13:03.440 --> 0:13:09.000
<v Speaker 1>going to pieces, he extracted himself. But the new business

0:13:09.040 --> 0:13:12.719
<v Speaker 1>that formed out of the ashes of Control Video Corporation

0:13:13.160 --> 0:13:18.199
<v Speaker 1>was called Quantum Computer Services. Only ten of the employees

0:13:18.559 --> 0:13:21.560
<v Speaker 1>from Control Video Corporation would still have a job with

0:13:21.640 --> 0:13:25.840
<v Speaker 1>this new company, So the CEO of Quantum Computer Services

0:13:25.960 --> 0:13:29.600
<v Speaker 1>was Jim Kimsey. Mark Saraph would serve as the chief

0:13:29.600 --> 0:13:32.960
<v Speaker 1>technology officer, and Steve kay still had a job too

0:13:33.000 --> 0:13:37.199
<v Speaker 1>as the head of marketing. But Kimsey also recognized case

0:13:37.280 --> 0:13:39.600
<v Speaker 1>while he wasn't a tech guy, he wasn't the guy

0:13:39.720 --> 0:13:44.280
<v Speaker 1>to engineer a system or program something. He really had

0:13:44.320 --> 0:13:47.160
<v Speaker 1>a good handle on the business side and the marketing

0:13:47.160 --> 0:13:50.120
<v Speaker 1>side of things, and so Kimsey thought, this is a

0:13:50.120 --> 0:13:53.320
<v Speaker 1>guy I need to groom to become the head of

0:13:53.360 --> 0:13:57.400
<v Speaker 1>the company once I'm ready to hand over control, and

0:13:57.520 --> 0:14:00.120
<v Speaker 1>that would be the case. I've got a lot were

0:14:00.160 --> 0:14:02.599
<v Speaker 1>to say about the early days of a o L,

0:14:02.679 --> 0:14:05.360
<v Speaker 1>but first let's take a quick break to thank our sponsor.

0:14:13.120 --> 0:14:16.760
<v Speaker 1>This new company, Quantum Computer Services, took a lot of

0:14:16.840 --> 0:14:21.000
<v Speaker 1>inspiration from the strategy they used with the Atari twenty hundred,

0:14:21.120 --> 0:14:23.320
<v Speaker 1>but obviously they weren't going to be able to cater

0:14:23.400 --> 0:14:27.480
<v Speaker 1>to that audience that had imploded. So instead they started

0:14:27.520 --> 0:14:31.480
<v Speaker 1>to look at the burgeoning personal computer industry and they

0:14:31.520 --> 0:14:35.960
<v Speaker 1>targeted the Commodore sixty four community. Personal computers were succeeding

0:14:36.080 --> 0:14:40.680
<v Speaker 1>where video game consoles had failed. On May one, Quantum

0:14:40.680 --> 0:14:45.440
<v Speaker 1>Computer Services launched q link are sometimes called Quantum Link,

0:14:45.840 --> 0:14:49.000
<v Speaker 1>which was essentially an online bulletin board service. And I've

0:14:49.040 --> 0:14:52.440
<v Speaker 1>talked about bulletin board services or bbs is in the past,

0:14:52.480 --> 0:14:56.240
<v Speaker 1>but here's a super quick refresher. With the BBS, you

0:14:56.360 --> 0:14:59.640
<v Speaker 1>have somebody who is acting as host. They have a

0:14:59.640 --> 0:15:03.040
<v Speaker 1>computer eader, and they install software on that computer to

0:15:03.120 --> 0:15:07.200
<v Speaker 1>let it be a host for other machines. This computer

0:15:07.520 --> 0:15:11.240
<v Speaker 1>holds all the files that visitors to the BBS will

0:15:11.280 --> 0:15:14.080
<v Speaker 1>be able to interact with, whether they're just reading things,

0:15:14.200 --> 0:15:17.280
<v Speaker 1>or they can download stuff or upload stuff. This computer

0:15:17.480 --> 0:15:20.960
<v Speaker 1>is the home for all of that. Users can direct

0:15:21.040 --> 0:15:25.400
<v Speaker 1>their own personal computers to visit this BBS. They run

0:15:26.120 --> 0:15:29.560
<v Speaker 1>user interface software, a special program that allows them to

0:15:29.600 --> 0:15:33.200
<v Speaker 1>do this, and that also involves dialing a phone number

0:15:33.240 --> 0:15:36.480
<v Speaker 1>connected to the BBS using a dial up modem. So

0:15:36.520 --> 0:15:40.040
<v Speaker 1>the BBS is essentially answering a phone call from another computer,

0:15:40.520 --> 0:15:43.080
<v Speaker 1>and then those two computers have a conversation, just like

0:15:43.120 --> 0:15:47.200
<v Speaker 1>two humans would acceptance data instead of voice or sound.

0:15:47.960 --> 0:15:50.600
<v Speaker 1>This is on a very small scale, similar to what

0:15:50.720 --> 0:15:55.200
<v Speaker 1>happens on the Internet, but this represents a direct connection

0:15:55.480 --> 0:15:59.640
<v Speaker 1>between one computer and another, a client computer and the

0:15:59.720 --> 0:16:03.040
<v Speaker 1>sir for a computer, there's no network there, so the

0:16:03.040 --> 0:16:05.840
<v Speaker 1>connections only passing through the circuits of the phone system

0:16:05.920 --> 0:16:09.160
<v Speaker 1>and otherwise it's a direct connect from computer A to

0:16:09.200 --> 0:16:12.280
<v Speaker 1>computer b so q Link was a service in which

0:16:12.320 --> 0:16:16.480
<v Speaker 1>Commodore sixty four users could subscribe and access various features,

0:16:16.640 --> 0:16:20.720
<v Speaker 1>which included stuff like an electronic mail system that other

0:16:21.040 --> 0:16:26.240
<v Speaker 1>users could participate in, chat features, some file sharing capabilities,

0:16:26.320 --> 0:16:31.880
<v Speaker 1>and some networked games. You were restricted to other Commodore

0:16:31.960 --> 0:16:34.520
<v Speaker 1>sixty four owners who were also using the service. You

0:16:34.560 --> 0:16:37.640
<v Speaker 1>could not use q link to connect with people who

0:16:37.680 --> 0:16:41.440
<v Speaker 1>are using competing services. There was no inner connectivity. It

0:16:41.520 --> 0:16:44.680
<v Speaker 1>cost about ten dollars a month to subscribe to this service,

0:16:44.760 --> 0:16:47.280
<v Speaker 1>and if you wanted to use most of the features,

0:16:47.760 --> 0:16:50.520
<v Speaker 1>there was an additional charge of several cents per minute,

0:16:50.600 --> 0:16:53.520
<v Speaker 1>like six to eight cents per minute after the first

0:16:53.560 --> 0:16:56.680
<v Speaker 1>hour of use each month. So if you subscribed, you

0:16:56.720 --> 0:17:01.520
<v Speaker 1>would typically get sixty minutes of uh plus service is

0:17:01.560 --> 0:17:04.840
<v Speaker 1>what they called it, wrapped up in that and beyond

0:17:04.960 --> 0:17:07.320
<v Speaker 1>sixty minutes he would have to start paying per minute

0:17:07.440 --> 0:17:10.679
<v Speaker 1>of use. Steve Case would work super hard in his

0:17:10.760 --> 0:17:13.919
<v Speaker 1>division to promote que link and get more Commodore sixty

0:17:13.920 --> 0:17:17.440
<v Speaker 1>four users on board. Eventually the company would have about

0:17:17.440 --> 0:17:23.159
<v Speaker 1>a hundred thousand subscribers using Commonore sixty four accounts. Now,

0:17:23.960 --> 0:17:26.000
<v Speaker 1>for the next few bits of information, the next few

0:17:26.080 --> 0:17:28.919
<v Speaker 1>dates I'm going to talk about, there's somewhat muddled. I

0:17:28.960 --> 0:17:32.720
<v Speaker 1>went through a lot of different sources while researching these episodes,

0:17:33.440 --> 0:17:35.199
<v Speaker 1>and the problem is that there are a lot of

0:17:35.200 --> 0:17:39.440
<v Speaker 1>sources that have slightly different dates for when things happened.

0:17:39.840 --> 0:17:45.560
<v Speaker 1>So rather than say definitively that X happened on Y date,

0:17:45.640 --> 0:17:47.880
<v Speaker 1>I'm going to do my best but keep in mind

0:17:48.280 --> 0:17:50.360
<v Speaker 1>some of these could be off by a year one

0:17:50.400 --> 0:17:53.160
<v Speaker 1>way or another, because no one seems to agree on

0:17:53.200 --> 0:17:59.560
<v Speaker 1>when everything actually happened. So circa n Quantum Services, Quantum

0:17:59.560 --> 0:18:05.639
<v Speaker 1>Computers Services expanded by creating similar products called PC link

0:18:05.840 --> 0:18:08.840
<v Speaker 1>and apple Link. They had essentially the same sort of

0:18:08.840 --> 0:18:12.119
<v Speaker 1>features as q link did for a Commodore sixty fours,

0:18:12.119 --> 0:18:16.520
<v Speaker 1>but these were for Apple and IBM compatible computers. They

0:18:16.560 --> 0:18:20.880
<v Speaker 1>also created a service for Tandy computer owners to take

0:18:20.880 --> 0:18:23.240
<v Speaker 1>advantage of the same sort of stuff that q link

0:18:23.440 --> 0:18:27.439
<v Speaker 1>customers had been using. However, these were not interoperable. You

0:18:27.480 --> 0:18:31.199
<v Speaker 1>couldn't use the computer on Apple Link and communicate with

0:18:31.240 --> 0:18:36.119
<v Speaker 1>someone on pc link, so these were all independent services.

0:18:36.440 --> 0:18:39.000
<v Speaker 1>You could communicate with anyone else who was on that service,

0:18:39.560 --> 0:18:43.159
<v Speaker 1>just not with on one of the other services. So

0:18:43.240 --> 0:18:46.800
<v Speaker 1>this again was not the Internet, but rather centralized servers

0:18:46.800 --> 0:18:51.600
<v Speaker 1>that customers were dialing into in order to access these features.

0:18:51.640 --> 0:18:56.560
<v Speaker 1>Sometime around the company launched its first instant messaging service,

0:18:57.080 --> 0:19:00.960
<v Speaker 1>a precursor to what would become a O L Instant

0:19:01.000 --> 0:19:04.720
<v Speaker 1>Messenger or AIM. I'll talk about AIM more later on

0:19:04.800 --> 0:19:08.840
<v Speaker 1>in this series of episodes. One other super important moment

0:19:09.119 --> 0:19:12.520
<v Speaker 1>happened around nine nine. According to the official A O.

0:19:12.680 --> 0:19:17.280
<v Speaker 1>L History, that's when the You've got mail alert debuted.

0:19:17.600 --> 0:19:19.560
<v Speaker 1>So if you've ever heard that phrase, it comes from

0:19:19.600 --> 0:19:23.199
<v Speaker 1>A O L. And specifically it comes from nine. The

0:19:23.200 --> 0:19:26.560
<v Speaker 1>phrase would become iconic in the early days of the Internet.

0:19:26.840 --> 0:19:29.680
<v Speaker 1>It became a bit of a cultural meme. Folks would

0:19:29.680 --> 0:19:32.480
<v Speaker 1>mimic the notification or they would use it as a

0:19:32.520 --> 0:19:37.000
<v Speaker 1>punchline to a joke. Later on, when people had smartphones

0:19:37.040 --> 0:19:40.960
<v Speaker 1>that can actually play sound bites, that would become some

0:19:41.000 --> 0:19:44.840
<v Speaker 1>people's message alert system, you've got mail. The man whose

0:19:44.920 --> 0:19:48.439
<v Speaker 1>voice says You've got mail for A O L is

0:19:48.840 --> 0:19:53.160
<v Speaker 1>Lwood Edwards. Now Edwards. His wife, who was a customer

0:19:53.240 --> 0:19:58.480
<v Speaker 1>service representative for Quantum Computer Services, had overheard Steve Case

0:19:58.560 --> 0:20:01.720
<v Speaker 1>say he really will that they could have a voice

0:20:01.760 --> 0:20:05.280
<v Speaker 1>component to the online service interfaces, that the company had

0:20:05.359 --> 0:20:10.600
<v Speaker 1>something to differentiate their service from other products. So she

0:20:10.760 --> 0:20:13.960
<v Speaker 1>came home and she told her husband, Elwood about this.

0:20:14.520 --> 0:20:19.040
<v Speaker 1>And Elwood was a voiceover performer as well as a broadcaster.

0:20:19.240 --> 0:20:24.679
<v Speaker 1>He had a history in this kind of thing. So he,

0:20:25.240 --> 0:20:28.040
<v Speaker 1>according to the story, went into his living room and

0:20:28.080 --> 0:20:30.800
<v Speaker 1>he got a cassette player, which was a thing back

0:20:30.840 --> 0:20:34.240
<v Speaker 1>in those days. And a cassette tape and he recorded

0:20:34.280 --> 0:20:37.600
<v Speaker 1>himself saying several phrases including welcome and you've got mail,

0:20:37.640 --> 0:20:39.880
<v Speaker 1>and lots of others, and then they sent it off

0:20:39.920 --> 0:20:43.360
<v Speaker 1>to Steve Case and he got the gig. He's obviously

0:20:43.400 --> 0:20:45.680
<v Speaker 1>done lots of other work. Like I said, he's had

0:20:45.680 --> 0:20:49.679
<v Speaker 1>a long history in broadcasting. But Steve Case liked it.

0:20:49.920 --> 0:20:52.320
<v Speaker 1>He said, this is the tone and the technique we want,

0:20:52.560 --> 0:20:55.399
<v Speaker 1>and they went with it. So the phrase would become

0:20:55.480 --> 0:20:59.520
<v Speaker 1>intrinsically linked with A O L Services In those days.

0:20:59.760 --> 0:21:02.040
<v Speaker 1>It was famous enough to become the title of a

0:21:02.119 --> 0:21:06.720
<v Speaker 1>romantic comedy film in n starring Tom Hanks and Meg Ryan.

0:21:07.280 --> 0:21:09.600
<v Speaker 1>A O L got a lot of mileage out of

0:21:09.600 --> 0:21:13.320
<v Speaker 1>those phrases. As for Elwood, in two thousand and sixteen,

0:21:13.400 --> 0:21:16.520
<v Speaker 1>he popped up in online culture after a woman named

0:21:16.560 --> 0:21:21.280
<v Speaker 1>Brandy Barker uploaded a video of Elwood cheerfully reprising his

0:21:21.400 --> 0:21:25.119
<v Speaker 1>famous line he was driving her around because Elwood had

0:21:25.119 --> 0:21:28.560
<v Speaker 1>sort of retired from broadcasting but was working part time

0:21:28.640 --> 0:21:32.159
<v Speaker 1>as an uber driver in Ohio. It's actually a sweet

0:21:32.200 --> 0:21:34.879
<v Speaker 1>little video if you look it up, and that's pretty

0:21:34.920 --> 0:21:40.960
<v Speaker 1>much everywhere online. By the leadership of Quantum Computer Services,

0:21:40.960 --> 0:21:44.400
<v Speaker 1>felt that the company needed a rebranding to better reflect

0:21:44.840 --> 0:21:48.440
<v Speaker 1>what it did what its products were. So Steve Case

0:21:48.480 --> 0:21:52.960
<v Speaker 1>held a contest internally to rename the company, and employees

0:21:52.960 --> 0:21:55.800
<v Speaker 1>got to vote on the various nominees, and the name

0:21:55.880 --> 0:21:59.320
<v Speaker 1>that went out over all the others was America Online,

0:21:59.800 --> 0:22:03.560
<v Speaker 1>and so Quantum Services Quantum Computer Services ditched its name

0:22:03.640 --> 0:22:07.439
<v Speaker 1>for a o L. That happened in nineteen Now a

0:22:07.560 --> 0:22:10.920
<v Speaker 1>o L was not the first online service provider, as

0:22:10.960 --> 0:22:13.639
<v Speaker 1>I said, the first of those came out more or

0:22:13.720 --> 0:22:17.040
<v Speaker 1>less in nineteen seventy nine. These dates are also kind

0:22:17.040 --> 0:22:20.560
<v Speaker 1>of fuzzy because it really depends upon when you would

0:22:20.560 --> 0:22:24.160
<v Speaker 1>consider the beginning of the service. There was some limited

0:22:24.280 --> 0:22:27.679
<v Speaker 1>services in nineteen seventy eight when you could call into

0:22:27.720 --> 0:22:31.480
<v Speaker 1>computers after a certain time because the computers during the

0:22:31.520 --> 0:22:33.399
<v Speaker 1>day would be used for one purpose, but in the

0:22:33.480 --> 0:22:36.679
<v Speaker 1>evening they could, when they would otherwise be idle, they

0:22:36.680 --> 0:22:38.800
<v Speaker 1>could be put to use for this kind of stuff.

0:22:39.119 --> 0:22:42.159
<v Speaker 1>Seventy nine was really when things were starting to take effect,

0:22:42.240 --> 0:22:45.520
<v Speaker 1>and one of those early services was compu Serve. One

0:22:45.560 --> 0:22:47.280
<v Speaker 1>of these days, I'm gonna have to do a full

0:22:47.320 --> 0:22:52.640
<v Speaker 1>episode just about compu Serve. Another one was called the source. Now,

0:22:52.640 --> 0:22:55.960
<v Speaker 1>those services may have been what convinced William von Meister

0:22:56.160 --> 0:22:58.879
<v Speaker 1>to launch Control Video Corporation in the first place in

0:22:58.960 --> 0:23:01.600
<v Speaker 1>ninety three. Might have thought, I want to do the

0:23:01.640 --> 0:23:04.240
<v Speaker 1>same thing that they're doing with computers, but I'm going

0:23:04.280 --> 0:23:07.119
<v Speaker 1>to do it for home video game consoles because that

0:23:07.160 --> 0:23:10.640
<v Speaker 1>market is red hot. So copy serving the source. We're

0:23:10.680 --> 0:23:14.520
<v Speaker 1>pretty simple dial up services. Users could connect using a

0:23:14.560 --> 0:23:17.720
<v Speaker 1>dial up modem to a computer. Sometimes they might even

0:23:17.800 --> 0:23:21.159
<v Speaker 1>have to lift a telephone off of its cradle and

0:23:21.200 --> 0:23:24.679
<v Speaker 1>put it into a special other cradle that's connected to

0:23:24.720 --> 0:23:28.600
<v Speaker 1>the computer they're using. People who have used old modems

0:23:28.600 --> 0:23:31.919
<v Speaker 1>know what I'm talking about. The interfaces were text based.

0:23:32.000 --> 0:23:35.960
<v Speaker 1>They were not graphic user interfaces, both because computers weren't

0:23:36.000 --> 0:23:40.159
<v Speaker 1>really capable of displaying complex images, and also because it

0:23:40.240 --> 0:23:43.640
<v Speaker 1>cut down on how much data needed to go across

0:23:43.720 --> 0:23:46.560
<v Speaker 1>those phone lines and those modems. Because, like I said,

0:23:46.600 --> 0:23:50.960
<v Speaker 1>early modems had really limited data transfer capacities. You didn't

0:23:50.960 --> 0:23:53.240
<v Speaker 1>want to try and send a big file it would

0:23:53.240 --> 0:23:56.880
<v Speaker 1>take forever. Since the early days, the basic services were

0:23:56.880 --> 0:23:58.959
<v Speaker 1>pretty much what you would find if you had been

0:23:58.960 --> 0:24:01.560
<v Speaker 1>a que link user. Typically you'd have some sort of

0:24:01.600 --> 0:24:06.720
<v Speaker 1>electronic mail service bulletin boards or forums for discussion, news feeds,

0:24:06.720 --> 0:24:09.600
<v Speaker 1>that kind of thing. You were limited to communicating again

0:24:09.640 --> 0:24:11.960
<v Speaker 1>with the people who used the same service you did.

0:24:12.200 --> 0:24:15.159
<v Speaker 1>With some minor exceptions, there were some third parties that

0:24:15.240 --> 0:24:18.680
<v Speaker 1>offered up some cross service communication tools that would work

0:24:19.359 --> 0:24:23.040
<v Speaker 1>on services that had similar architectures. But for the most part,

0:24:23.160 --> 0:24:25.800
<v Speaker 1>you were limited to just your own community. You couldn't

0:24:25.880 --> 0:24:28.800
<v Speaker 1>chat with people who used other ones. The online service

0:24:28.800 --> 0:24:33.040
<v Speaker 1>providers might operate a network themselves, but that was an

0:24:33.040 --> 0:24:36.680
<v Speaker 1>internal network that you would connect to. They weren't interconnected

0:24:36.760 --> 0:24:39.680
<v Speaker 1>to other networks like the Internet is, so at least

0:24:39.720 --> 0:24:42.960
<v Speaker 1>at first, this wasn't about connecting to the Internet. It

0:24:43.000 --> 0:24:47.240
<v Speaker 1>was about connecting to a specific online service providers network.

0:24:47.840 --> 0:24:51.520
<v Speaker 1>So online service providers, you could argue, fit somewhere between

0:24:51.640 --> 0:24:57.119
<v Speaker 1>bulletin board services and the Internet. In scale, in a

0:24:57.280 --> 0:25:00.480
<v Speaker 1>o L held its initial public offering, That is, the

0:25:00.480 --> 0:25:03.880
<v Speaker 1>company made the change from being a privately owned company

0:25:03.920 --> 0:25:07.360
<v Speaker 1>to a publicly traded company. The first day of trading

0:25:07.359 --> 0:25:12.720
<v Speaker 1>on the Nasdaq Exchange was on March nineteenth two. The

0:25:12.760 --> 0:25:15.280
<v Speaker 1>opening price for a share of stock in a o

0:25:15.440 --> 0:25:18.840
<v Speaker 1>L was eleven dollars fifty cents. By the end of

0:25:18.880 --> 0:25:21.720
<v Speaker 1>that day, the stock price had closed at fourteen dollars

0:25:21.800 --> 0:25:24.720
<v Speaker 1>seventy five cents. That's an increase of twenty eight point

0:25:24.800 --> 0:25:28.040
<v Speaker 1>three percent, which isn't bad, and the number of shares

0:25:28.080 --> 0:25:30.040
<v Speaker 1>sold meant that A o L was able to raise

0:25:30.080 --> 0:25:34.080
<v Speaker 1>more than sixty million dollars in that process. A O

0:25:34.320 --> 0:25:38.320
<v Speaker 1>L and other online service providers like Prodigy since that

0:25:38.440 --> 0:25:41.720
<v Speaker 1>a more mainstream awareness of the Internet was right around

0:25:41.760 --> 0:25:44.200
<v Speaker 1>the corner, so they were preparing for this. They were

0:25:44.359 --> 0:25:47.280
<v Speaker 1>getting ready for what they envisioned as being an explosion

0:25:47.440 --> 0:25:50.320
<v Speaker 1>of interest in their services, and as it turns out,

0:25:50.680 --> 0:25:53.000
<v Speaker 1>A o L ended up being a little too modest

0:25:53.240 --> 0:25:57.160
<v Speaker 1>as far as expectations go. They would not scale up

0:25:57.200 --> 0:26:00.800
<v Speaker 1>to the size that they needed to, but they wouldn't

0:26:00.840 --> 0:26:05.159
<v Speaker 1>know that till later in according to time and they

0:26:05.160 --> 0:26:08.639
<v Speaker 1>should know more on that. In our next episode, A

0:26:08.800 --> 0:26:12.440
<v Speaker 1>o L introduced a new service in its suite. Users

0:26:12.440 --> 0:26:16.159
<v Speaker 1>could click on an option to access something pretty phenomenal,

0:26:16.720 --> 0:26:19.240
<v Speaker 1>and that would be the Internet. It would go from

0:26:19.280 --> 0:26:23.280
<v Speaker 1>being an online service provider that operated only its own

0:26:23.320 --> 0:26:26.720
<v Speaker 1>services to one that was a gateway to the information

0:26:26.880 --> 0:26:29.440
<v Speaker 1>super Highway. I have more to say about that, but

0:26:29.520 --> 0:26:40.160
<v Speaker 1>let's take another quick break to thank our sponsor. Now,

0:26:40.359 --> 0:26:43.920
<v Speaker 1>the Internet as a thing that the general public could

0:26:43.960 --> 0:26:48.520
<v Speaker 1>readily access has been around for nearly thirty years, but

0:26:48.640 --> 0:26:51.240
<v Speaker 1>before that it was a network that only a relatively

0:26:51.320 --> 0:26:54.879
<v Speaker 1>small number of people knew about, let alone had access to.

0:26:55.440 --> 0:26:58.720
<v Speaker 1>If you were on the Internet before, let's say, you

0:26:58.720 --> 0:27:01.959
<v Speaker 1>were likely a college student didn't and most likely, if

0:27:01.960 --> 0:27:04.200
<v Speaker 1>you were a college student on the Internet, you were

0:27:04.240 --> 0:27:08.200
<v Speaker 1>probably enrolled in at least one computer science class. An

0:27:08.200 --> 0:27:11.560
<v Speaker 1>employee at a research facility might have access to the Internet.

0:27:11.600 --> 0:27:14.840
<v Speaker 1>People in the military had access to the Internet. They

0:27:15.080 --> 0:27:19.840
<v Speaker 1>also had access to millnet, the military specific network that

0:27:19.960 --> 0:27:23.479
<v Speaker 1>is built on the same architecture. So there were a

0:27:23.520 --> 0:27:25.880
<v Speaker 1>few ways that you might have access to the Internet,

0:27:26.200 --> 0:27:28.359
<v Speaker 1>but just a few. It was just it was not

0:27:28.840 --> 0:27:32.520
<v Speaker 1>readily accessible to the average person. Then you had these

0:27:32.560 --> 0:27:35.560
<v Speaker 1>online service providers go beyond their own internal networks to

0:27:35.640 --> 0:27:40.159
<v Speaker 1>connect to the network of networks. The reaction was not

0:27:40.680 --> 0:27:44.239
<v Speaker 1>overwhelmingly positive on for the people who were already on

0:27:44.280 --> 0:27:47.960
<v Speaker 1>the Internet. That is, veterans online were greeted by a

0:27:48.000 --> 0:27:51.080
<v Speaker 1>flood of new users who had no inkling of how

0:27:51.160 --> 0:27:54.080
<v Speaker 1>things would work on the Internet. They hadn't been part

0:27:54.240 --> 0:27:56.520
<v Speaker 1>of the culture that had been forming. They didn't know

0:27:56.600 --> 0:28:00.840
<v Speaker 1>the lingo. There were nubes, in other words, and the

0:28:00.920 --> 0:28:06.280
<v Speaker 1>veterans weren't necessarily kind to the nubs. They resented this

0:28:06.359 --> 0:28:09.040
<v Speaker 1>flood of the uninformed, who were way worse than the

0:28:09.119 --> 0:28:12.000
<v Speaker 1>annual introduction of college freshmen. Those were bad enough. These

0:28:12.000 --> 0:28:14.719
<v Speaker 1>people were even worse. There was a bit of an

0:28:14.760 --> 0:28:17.680
<v Speaker 1>online culture war. But then again, while I call this

0:28:17.760 --> 0:28:21.480
<v Speaker 1>a culture war, you have to remember at most this

0:28:21.560 --> 0:28:24.400
<v Speaker 1>effected maybe a million and a half two million people.

0:28:24.680 --> 0:28:27.920
<v Speaker 1>A o L didn't even have two thousand subscribers yet,

0:28:28.280 --> 0:28:31.159
<v Speaker 1>so most of the mainstream world had not dipped a

0:28:31.280 --> 0:28:34.199
<v Speaker 1>toe in the Internet and viewed the whole thing as

0:28:34.240 --> 0:28:37.639
<v Speaker 1>a big fuss with computer nerds, and I guess it

0:28:37.760 --> 0:28:41.880
<v Speaker 1>mostly was. But A o L was trying to expand

0:28:42.000 --> 0:28:45.760
<v Speaker 1>beyond that narrow niche of computer enthusiasts. They were trying

0:28:45.800 --> 0:28:49.200
<v Speaker 1>to encourage adoption of this, and to do it, the

0:28:49.240 --> 0:28:52.560
<v Speaker 1>company took on a new marketing strategy that became about

0:28:52.600 --> 0:28:55.800
<v Speaker 1>as famous as that You've Got mail line. A o

0:28:55.960 --> 0:28:59.400
<v Speaker 1>L began to produce c d s, compact discs that

0:28:59.440 --> 0:29:02.720
<v Speaker 1>could in all the A o L interface onto a computer,

0:29:03.520 --> 0:29:06.440
<v Speaker 1>and then they began to send those CDs out, They

0:29:06.480 --> 0:29:09.400
<v Speaker 1>put them in magazines and they would mail them directly

0:29:09.520 --> 0:29:12.920
<v Speaker 1>to home addresses, and it got a little out of hand.

0:29:13.440 --> 0:29:16.800
<v Speaker 1>Anyone who owned a computer, and some people who didn't

0:29:17.160 --> 0:29:21.240
<v Speaker 1>began to accumulate collections of A O L compact discs.

0:29:21.760 --> 0:29:25.000
<v Speaker 1>There were jokes about using them as Christmas decorations, or

0:29:25.120 --> 0:29:30.400
<v Speaker 1>coasters or Frisbees. They were everywhere. The strategy was pervasive,

0:29:30.880 --> 0:29:36.480
<v Speaker 1>it was annoying, and it was effective. In Jim Kimsey

0:29:36.520 --> 0:29:40.440
<v Speaker 1>retired as CEO, he stayed on board as the Chairman

0:29:40.480 --> 0:29:42.240
<v Speaker 1>of the board for A O L for a couple

0:29:42.320 --> 0:29:46.000
<v Speaker 1>more years. Steve Case became the new CEO. He had

0:29:46.040 --> 0:29:49.800
<v Speaker 1>proven his worth numerous times by positioning the company's services

0:29:49.800 --> 0:29:52.719
<v Speaker 1>in a way that appealed to the end user. One

0:29:52.720 --> 0:29:55.200
<v Speaker 1>of the big differentiators in the A o L service

0:29:55.280 --> 0:29:58.960
<v Speaker 1>compared to competitors like Prodigy and compu Serve, is that

0:29:59.080 --> 0:30:01.960
<v Speaker 1>A o L's folk was on the ability to create

0:30:02.040 --> 0:30:06.040
<v Speaker 1>communities online. That tied back to that book I talked

0:30:06.080 --> 0:30:08.480
<v Speaker 1>about earlier, the one that inspired Case. When he was

0:30:08.520 --> 0:30:11.320
<v Speaker 1>in his twenties. He had worked to make sure that

0:30:11.440 --> 0:30:14.440
<v Speaker 1>A o L services included features that made it easy

0:30:14.520 --> 0:30:19.040
<v Speaker 1>for users to connect with one another beyond superficial messages.

0:30:19.680 --> 0:30:24.560
<v Speaker 1>By comparison prodigies, services were mostly centered around shopping for

0:30:24.720 --> 0:30:28.360
<v Speaker 1>one thing. The service was largely funded by seers, and

0:30:28.480 --> 0:30:31.080
<v Speaker 1>copy Serve was viewed as more of a tool for

0:30:31.200 --> 0:30:34.440
<v Speaker 1>real tech heads, people who were deeply tied to the

0:30:34.440 --> 0:30:38.600
<v Speaker 1>world of information. It was considered the more geeky of

0:30:38.640 --> 0:30:41.640
<v Speaker 1>the various online service providers. A o L was marketed

0:30:41.680 --> 0:30:46.200
<v Speaker 1>as more user friendly, the service that the average person

0:30:46.440 --> 0:30:50.760
<v Speaker 1>could get hold of and understand in. A o L

0:30:50.880 --> 0:30:53.920
<v Speaker 1>established its own homepage on the Internet. It was an

0:30:53.920 --> 0:30:57.280
<v Speaker 1>online service provider, but the home page did not exist

0:30:57.360 --> 0:31:01.280
<v Speaker 1>till a o L dot com. So, as Steve Case

0:31:01.320 --> 0:31:04.120
<v Speaker 1>at the Helm, another big change was around the corner

0:31:04.240 --> 0:31:08.840
<v Speaker 1>that in retrospect seemed to presage a o l's meteoric rise,

0:31:09.280 --> 0:31:12.800
<v Speaker 1>and this was a change in how the company build customers.

0:31:12.960 --> 0:31:17.720
<v Speaker 1>It was all in pricing up to nineteen six, The

0:31:17.800 --> 0:31:21.479
<v Speaker 1>general approach was to charge users according to the amount

0:31:21.480 --> 0:31:24.600
<v Speaker 1>of time they spent on the service. The longer you

0:31:24.640 --> 0:31:27.600
<v Speaker 1>were on the service, the more you paid, so you're

0:31:27.600 --> 0:31:31.280
<v Speaker 1>paying by the minute. In nineteen ninety six, a o

0:31:31.440 --> 0:31:34.240
<v Speaker 1>L changed its pricing model to a flat fee of

0:31:34.360 --> 0:31:38.440
<v Speaker 1>nineteen dollars n cents for a month of service, so

0:31:38.520 --> 0:31:40.840
<v Speaker 1>it's twenty bucks a month, and you could go online

0:31:40.880 --> 0:31:43.600
<v Speaker 1>as much as you liked, for as long as you liked,

0:31:44.080 --> 0:31:47.480
<v Speaker 1>as many times as you liked within that month. That

0:31:47.720 --> 0:31:51.160
<v Speaker 1>definitely had an impact. At the end of nineteen, a

0:31:51.240 --> 0:31:55.440
<v Speaker 1>o L had grown to one million subscribers after introducing

0:31:55.440 --> 0:31:58.320
<v Speaker 1>this new pricing model. By the end of ninety six,

0:31:58.800 --> 0:32:03.160
<v Speaker 1>they were at five million users, an enormous jump. Such

0:32:03.160 --> 0:32:05.680
<v Speaker 1>a big jump in fact, that A o L's servers

0:32:05.720 --> 0:32:10.160
<v Speaker 1>had trouble with this increase in traffic. On August seven,

0:32:11.040 --> 0:32:14.760
<v Speaker 1>which was a Wednesday, in case you're curious, the service

0:32:14.800 --> 0:32:18.880
<v Speaker 1>crashed and it remained offline for about nineteen hours. It

0:32:18.960 --> 0:32:22.760
<v Speaker 1>was big enough to make the news. CBS News correspondent

0:32:22.960 --> 0:32:26.560
<v Speaker 1>Peter Van Sante called it quote the silence of the

0:32:26.680 --> 0:32:32.800
<v Speaker 1>techno nerds end quote harsh words Van sent now. According

0:32:32.840 --> 0:32:36.000
<v Speaker 1>to A O L, the cause of the problem officially

0:32:36.760 --> 0:32:40.280
<v Speaker 1>was that they were doing regular maintenance on A o

0:32:40.440 --> 0:32:43.280
<v Speaker 1>L servers and something went wrong and it took a

0:32:43.280 --> 0:32:47.840
<v Speaker 1>while to fix. But CBS News cited an unnamed analyst

0:32:47.960 --> 0:32:51.800
<v Speaker 1>with Jupiter Communications who alleged the real reason was that

0:32:51.880 --> 0:32:55.239
<v Speaker 1>A O L had failed to scale up operations and

0:32:55.360 --> 0:32:58.200
<v Speaker 1>keep pace with the increase in the number of users,

0:32:58.280 --> 0:33:01.480
<v Speaker 1>and so it was user overload that caused the problem.

0:33:01.520 --> 0:33:03.959
<v Speaker 1>If that's the case, it's a great problem to have,

0:33:04.200 --> 0:33:06.840
<v Speaker 1>because it's better to have to scramble to meet demand

0:33:07.240 --> 0:33:09.600
<v Speaker 1>than to have to hustle to get enough customers. Too.

0:33:09.640 --> 0:33:14.000
<v Speaker 1>Straight by, you want the problem of having more demand

0:33:14.040 --> 0:33:18.720
<v Speaker 1>than you have supply. Kimsey had stepped down in in

0:33:19.800 --> 0:33:23.120
<v Speaker 1>Mark Seraf, the other co founder, would resign his position

0:33:23.120 --> 0:33:25.840
<v Speaker 1>of senior vice president with the company and leave to

0:33:25.880 --> 0:33:28.400
<v Speaker 1>go do other stuff, which meant that out of the

0:33:28.480 --> 0:33:32.680
<v Speaker 1>three co founders, only Steve Case remained, although to be fair,

0:33:32.840 --> 0:33:35.640
<v Speaker 1>Kimsey was on the board of directors for a little bit.

0:33:36.160 --> 0:33:40.520
<v Speaker 1>In Bolstered by a growing customer base and a solid

0:33:40.560 --> 0:33:43.480
<v Speaker 1>performance in the stock market, A o L began to

0:33:43.560 --> 0:33:45.719
<v Speaker 1>stretch out a bit and made a move on one

0:33:45.800 --> 0:33:48.840
<v Speaker 1>of its major competitors, a company that had been around

0:33:48.880 --> 0:33:51.640
<v Speaker 1>much longer than a O L had It moved to

0:33:51.760 --> 0:33:56.360
<v Speaker 1>acquire compu Serve. The two companies had been competing fiercely

0:33:56.480 --> 0:34:00.800
<v Speaker 1>over customers for years. Sometimes one would offer special deals

0:34:00.960 --> 0:34:03.640
<v Speaker 1>to lure people away from the other service, then the

0:34:03.640 --> 0:34:06.000
<v Speaker 1>other service would do the same, and it went back

0:34:06.000 --> 0:34:09.400
<v Speaker 1>and forth year over year over year between the two companies.

0:34:09.640 --> 0:34:14.400
<v Speaker 1>AOL had the larger number of customers by far by

0:34:15.560 --> 0:34:18.759
<v Speaker 1>which is when this acquisition would become final. A o

0:34:18.880 --> 0:34:22.320
<v Speaker 1>L had around eleven million subscribers and compu Serve was

0:34:22.360 --> 0:34:25.520
<v Speaker 1>closer to two and a half million. The acquisition was

0:34:25.560 --> 0:34:29.520
<v Speaker 1>a little bit on the long and winding side. In

0:34:29.520 --> 0:34:34.319
<v Speaker 1>other words, it got complicated. So let's explain, because it's

0:34:34.360 --> 0:34:39.360
<v Speaker 1>one of those fascinating corporate maneuvers that as a person

0:34:39.400 --> 0:34:43.600
<v Speaker 1>who loves tech and has a history in liberal arts education,

0:34:44.520 --> 0:34:49.120
<v Speaker 1>this was new to me. So before the acquisition, copy

0:34:49.239 --> 0:34:53.000
<v Speaker 1>Serve was part of H and R Block, the tax

0:34:53.080 --> 0:34:57.040
<v Speaker 1>preparation company. H and R Block purchased compu Serve back

0:34:57.080 --> 0:35:01.160
<v Speaker 1>in nineteen eighty for like twenty million dollar ers. By

0:35:01.239 --> 0:35:04.680
<v Speaker 1>n seven, H and R Block was going through some

0:35:04.800 --> 0:35:09.160
<v Speaker 1>major changes at the executive level. They were having real issues,

0:35:09.400 --> 0:35:12.720
<v Speaker 1>which is a fascinating story in itself, and I can't

0:35:12.760 --> 0:35:14.880
<v Speaker 1>really tell it on tech stuff because it doesn't really

0:35:15.000 --> 0:35:17.319
<v Speaker 1>tie into tech, but maybe I'll tell it on the

0:35:17.360 --> 0:35:20.400
<v Speaker 1>brink one day because I think it's a fascinating story. Anyway,

0:35:21.520 --> 0:35:25.760
<v Speaker 1>they were going through some stuff. It got complicated Facebook style,

0:35:26.320 --> 0:35:28.920
<v Speaker 1>and so the board of directors for H and R

0:35:28.960 --> 0:35:31.440
<v Speaker 1>Block decided one of the things the company needed to

0:35:31.480 --> 0:35:35.279
<v Speaker 1>do in order to streamline stuff was divest itself of

0:35:35.360 --> 0:35:40.880
<v Speaker 1>Copy Serve. A L expressed interest right away, saying, we

0:35:40.960 --> 0:35:43.120
<v Speaker 1>would very much like to take that off your hands,

0:35:43.520 --> 0:35:45.880
<v Speaker 1>and we will make an offer, and they offered to

0:35:45.960 --> 0:35:49.240
<v Speaker 1>purchase the company with shares of a O L stock,

0:35:50.040 --> 0:35:53.440
<v Speaker 1>But the board rejected this offer. They didn't feel that

0:35:53.480 --> 0:35:56.719
<v Speaker 1>a O L stock was valuable enough for this to

0:35:56.760 --> 0:36:00.279
<v Speaker 1>make sense. They would prefer to either have stocks were

0:36:00.320 --> 0:36:06.440
<v Speaker 1>more um stable, more established, I guess is a good

0:36:06.440 --> 0:36:09.279
<v Speaker 1>way of putting it than a O L. Or they

0:36:09.280 --> 0:36:11.960
<v Speaker 1>wanted to do it in cash. A couldn't do it

0:36:12.000 --> 0:36:15.080
<v Speaker 1>in cash. But then a third company came into the picture.

0:36:15.520 --> 0:36:18.800
<v Speaker 1>This third company was World Calm, which is another company

0:36:18.960 --> 0:36:20.960
<v Speaker 1>I'm going to have to cover at some future point.

0:36:21.520 --> 0:36:24.319
<v Speaker 1>World Calm had an offer for both H and R

0:36:24.360 --> 0:36:28.560
<v Speaker 1>Block and A O L. World Colm offered to buy

0:36:28.640 --> 0:36:31.960
<v Speaker 1>Copy Serve from H and R. In exchange, World Calm

0:36:32.120 --> 0:36:35.279
<v Speaker 1>would give up some of its stock. That stock was

0:36:35.320 --> 0:36:38.440
<v Speaker 1>seen as being more stable and more valuable than a

0:36:38.520 --> 0:36:40.920
<v Speaker 1>O L stock, and H and R thought, well, we

0:36:40.960 --> 0:36:43.200
<v Speaker 1>can turn that around and sell it right away and

0:36:43.560 --> 0:36:45.960
<v Speaker 1>get the money we want. So the H and R

0:36:46.000 --> 0:36:49.680
<v Speaker 1>Block board agreed to that term, and Company Serve was

0:36:49.800 --> 0:36:54.360
<v Speaker 1>sold to World Calm for one point to billion dollars

0:36:54.440 --> 0:36:57.479
<v Speaker 1>worth of World Calm shares, which H and R Block

0:36:57.560 --> 0:37:01.800
<v Speaker 1>then sold the very next day. After this exchange between

0:37:01.800 --> 0:37:05.440
<v Speaker 1>world Common H and R world Coms sold part of

0:37:05.520 --> 0:37:09.120
<v Speaker 1>compu Serve to a o L. Specifically, it's sold the

0:37:09.160 --> 0:37:14.040
<v Speaker 1>information services part of compu Serve, and it retained compu

0:37:14.160 --> 0:37:18.000
<v Speaker 1>serves network services business because that's the business that World

0:37:18.040 --> 0:37:22.440
<v Speaker 1>com is in, is in network technologies. In addition, a

0:37:22.560 --> 0:37:27.160
<v Speaker 1>o L sold to World Calm its own Advanced Network

0:37:27.320 --> 0:37:31.200
<v Speaker 1>Services division. So World Colm gets the network parts of

0:37:31.280 --> 0:37:34.880
<v Speaker 1>compu Serve and a O L. A o L gets

0:37:34.920 --> 0:37:39.799
<v Speaker 1>compu Serves information systems divisions. World Colm gets a lot

0:37:39.840 --> 0:37:42.319
<v Speaker 1>more of the market share for its business, a O

0:37:42.480 --> 0:37:45.960
<v Speaker 1>L gets more dominant position for its business, and H

0:37:46.040 --> 0:37:50.120
<v Speaker 1>and R Block can count a whole lot of money,

0:37:50.880 --> 0:37:54.120
<v Speaker 1>which is what I understand they're quite good at doing.

0:37:55.120 --> 0:37:57.920
<v Speaker 1>So pretty interesting. Plus, I mean, if you look at

0:37:58.000 --> 0:38:01.760
<v Speaker 1>H and R Block, they made a heck of a deal.

0:38:02.080 --> 0:38:04.840
<v Speaker 1>They had paid twenty million dollars for compu Serve in

0:38:04.960 --> 0:38:09.680
<v Speaker 1>nineteen Then two decades later they sell it for one

0:38:09.719 --> 0:38:13.320
<v Speaker 1>point to billion dollars and compu Serve had been making

0:38:13.360 --> 0:38:18.680
<v Speaker 1>profits in those years in between. So incredible deal for

0:38:18.840 --> 0:38:21.920
<v Speaker 1>H and R. Block A o L. Had secured its place,

0:38:22.600 --> 0:38:25.799
<v Speaker 1>or so it seemed. It had eclipsed a former competitor,

0:38:26.080 --> 0:38:29.600
<v Speaker 1>and it had even brought that company to heal. Sure,

0:38:29.880 --> 0:38:33.520
<v Speaker 1>there were some compu Serve customers who weren't crazy about

0:38:33.600 --> 0:38:36.480
<v Speaker 1>the whole thing, but the future was bright. The rapid

0:38:36.600 --> 0:38:41.279
<v Speaker 1>rise of the company was guaranteed to continue, wasn't it.

0:38:42.480 --> 0:38:44.879
<v Speaker 1>We'll find out in our next episode. If you guys

0:38:44.920 --> 0:38:48.279
<v Speaker 1>have any suggestions for future episodes of tech Stuff, whether

0:38:48.360 --> 0:38:52.000
<v Speaker 1>it's a company, a technology person in tech, maybe there's

0:38:52.080 --> 0:38:54.520
<v Speaker 1>just a moment in tech history you would really like

0:38:54.600 --> 0:38:57.040
<v Speaker 1>me to focus on. Let me know. Send me an email.

0:38:57.080 --> 0:39:01.560
<v Speaker 1>The address is tech Stuff at how stuff works dot com,

0:39:01.640 --> 0:39:04.200
<v Speaker 1>or head on over to our website that's tech Stuff

0:39:04.239 --> 0:39:07.239
<v Speaker 1>Podcast dot com. There you're gonna find other ways to

0:39:07.280 --> 0:39:10.640
<v Speaker 1>contact us, like through social media. Also, don't forget to

0:39:10.719 --> 0:39:13.440
<v Speaker 1>pop on over to our merchandise store that's over at

0:39:13.520 --> 0:39:17.120
<v Speaker 1>t public dot com. Slash tech Stuff every purchase you

0:39:17.160 --> 0:39:19.080
<v Speaker 1>make there goes to help the show, and we greatly

0:39:19.120 --> 0:39:22.600
<v Speaker 1>appreciate it. And I'll talk to you again really soon

0:39:28.080 --> 0:39:30.520
<v Speaker 1>for more on this and thousands of other topics. Is

0:39:30.520 --> 0:39:41.560
<v Speaker 1>that how stuff works dot com