America Online "performed an emergency overhaul" yesterday,
reorganizing its management and changing its pricing system,
according to David Hilzenrath of the WASHINGTON POST. The move
will require the company to put a $385M charge against earnings
for the year. The steps "were intended to reverse a steep
decline in its stock price and to counter intense competition."
AOL will offer unlimited use of its own computer services and the
Internet for a flat monthly rate of $19.95, following the policy
of most of its competitors. The company also named Robert
Pittman, an AOL board member, to oversee its main online business
(WASHINGTON POST, 10/30). AOL Chair Steven Case said AOL expects
to pass the 7 million subscriber mark next month, but he "seemed
to back off his aggressive plan to reach 10 million." AOL has
also changed the way it pays content providers and it has signed
deals "with some of its largest providers," Viacom and the N.Y.
Times, to pay them a flat monthly fee for their content instead
of a commission-type fee based on traffic to an area (AD AGE,
10/30).
