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Last fall they cut 5000 jobs, and now they are scaling back another 2000 more.  Ouch. 

"This realignment will allow us to increase investment in high-growth areas of the company _ as an example, we added hundreds of people this year through acquisitions _ while scaling back in areas with less growth potential or those that aren’t core to our business," AOL Chief Executive Randy Falco told employees Monday.

AOL has not been able to maintain competitiveness in a new marketplace where they can no longer charge outrageous fees for their services, distribute trial discs that litter our planet, and prevent customers from canceling their accounts.  In other words, since they’ve had to change their modus operandi to rely solely on ad revenue, they have struggled. 

According to Comcast News, "AOL has been counting on ad growth to offset declines in subscription revenue, which continued to plummet, as expected, following its strategy shift in August 2006. AOL had 10.9 million paying U.S. subscribers for Internet access as of June 30, a 60 percent drop from its peak of 26.7 million in September 2002."

To right their ship, they must change their reputation.  It has been seriously damaged by their previous treatment of customers.  They must completely change their philosophy and put the customer first.  There is so much competition that AOL’s main draw right now are people who have had AOL accounts for a long time and don’t want to lose their email address.  Meanwhile, companies like Google and Microsoft are attracting customers by offering free email along with extra services such as online office apps, maps and more.  AOL was once the king of the internet.  In fact, most people thought AOL was the internet.  Now AOL is a tarnished brand battling to survive.  My, how the mighty have fallen.

Read more at Comcast News

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