AOL Business Analysis

This analysis of America Online (AOL) will detail some of the strengths and weaknesses of that company, and consider some of the strategies that its management has undertaken. The analysis will also consider some of the problems that the company faces, and suggest possible solutions for those problems. AOL is a complex company, and it is essential to describe some parts of the business in detail.

AOL is a division of AOL Time-Warner, which is a media conglomerate. AOL is headquartered in Dulles Virginia, and as its primary business is an Internet Service Provider with more than 30 million online customers, who pay a monthly fee of $24 for the service.

America Online engages in interactive services, Web brands, Internet technologies and electronic commerce services and its primary operations include two worldwide Internet services (AOL and Compuserve); "AOL Anywhere" services; Netscape; AOL local brands such as Digital City, AOL Moviefone and MapQuest; AOL messaging services such as ICQ and AOL Instant Messenger; and AOL music properties such as Spinner.com, Winamp and SHOUTcast. Utilizing its "AOL Anywhere" strategy, key services, features and content of the AOL service are available through multiple platforms and devices ("AOL Launches" 2000, 12).

Through iPlanet E-Commerce Solutions, its strategic alliance with Sun Microsystems, Inc., America Online also develops and offers easy-to-deploy, end-to-end electronic commerce and e

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parison Ratio AOL Industry S&P 500 Gross Margin 47.81 45.09 48.05 Operating Margin 11.25 9.24 17.67 Return on Assets 0.41 (0.19) 8.15 ROI 0.45 1.71 11.98 P/E 191.20 34.51 28.47 Price to Sales 8.24 2.01 1.00 External Environment -- Opportunities and Threats 1. Macro A. Legal Company management, according to its annual report does not face any legal issues apart from those normally affecting business. "In some countries, the Company is subject to specific laws regulating the availability of certain material related to the obtaining of, personal information. Adverse developments in the legal or regulatory environment relating to the interactive online services and Internet industry in the United States, Europe, Asia, Latin America or elsewhere could have a material adverse effect on the Company's business, financial condition and operating results" (Annual Report, 2000, p. 22). B. Political Since politicians can enact laws, and since AOL, with its worldwide operations is subject to a legislative and regulatory proposals from various international bodies and foreign and domestic governments in the areas of teleco

Category: Business - A