AO Hell

Deep cuts at Dulles Virginia’s offices today according to the WashingtonPost here. I have lots of friends that still work there. Its funny, but anyone in the industry has been amazed for the past 3 years with the onset of the broadband revolution that AOL can keep any customers at all. Sure, they have an excellent partnership program and some exclusive online content, but even that is not enough to lure anyone with broadband to their exclusive portal services.

So they apparently called a meeting today in which employees were also attending a webcast. They asked everyone to roll a D-4. Everyone who rolled a “one” got a pink slip.

Not really, but they may as well have.

AOL said today it plans to lay off more than a quarter of its workforce including hundreds of employees in Northern Virginia over the next six months as the company restructures its business to focus on online advertising instead of dial-up subscriptions.

In a meeting called this morning at the company’s Dulles headquarters, AOL chief executive Jonathan Miller told employees that 5,000 of the company’s 19,000 worldwide positions would be eliminated.

The news was hardly surprising, though, coming a day after AOL parent company Time Warner Inc. announced a major overhaul in AOL’s business strategy. AOL said yesterday that the company would give away much of its content, including aol.com e-mail addresses, for free on its Web site to customers who now pay for a broadband subscription. Customers who pay for dial-up access to the Internet through AOL will still be charged a monthly fee.

Miller addressed about 400 people gathered at the meeting, which was also viewed on a Web cast by employees overseas.

AOL has suffered as the business that it built around dial-up subscription service for access to the Internet dropped off as more people upgraded to broadband service.

As far as the cyber security industry goes, AOL should be careful to keep their security team intact. They have been recognized by the industry and by Homeland Security as having excellent visibility into online attacks and patterns, and they were leading the pack when it comes to ISP security. If they play their cards right, they could become an outstanding Managed Security Services Provider.

Or they could collect severence and get a job where there are no stick figures as corporate logos.