In the last few weeks AOL has done some serious house cleaning. Techcrunch leaked these plans back in July. AOL Journal, XDrive, AOL MyPictures, MyMobile and Bluestring have been or are in the process of being shuttered.
The business reasons behind this move seem perfectly sound but it will be interesting to see the consumer reaction. Will this withdrawal of service offerings leave people questioning the dependability of the remaining services? Will the shutdown cause their customer base to fragment as members go elsewhere in looking for equivalent services.
Would AOL have been better off linking with other services to transition the users to alternative services. For example, encouraging AOL Pictures users to upload to their recent acquisition, Bebo.
How difficult a position is AOL in? Their core service is arguably AIM and not email. However, I don't think I am alone in using AIM on a daily basis via meebo, adium or iChat or other third party chat applications where none of the eyeballs get to AIM.
It is certainly getting to be an interesting time with Yahoo's share price plummeting and AOL jettisoning services. It is looking like a Google-Microsoft Duopoly will emerge where those two giants provide a full suite of web-based services in order to maximize the attention of their users. The game in that situation is to provide good enough services where the network benefits of one environment outweigh the individual features offered by a specific service. This is the area that Google understands really well. When you look at Google's Documents suite the individual word processing, spreadsheet or presentation capabilities are a pale reflection of the rich Office suite form Microsoft. However, the power of the sharing capabilities provide a massive counter to the formatting features of the Microsoft products. The easiest way to demonstrate this argument is to look at the use of digital cameras and camera phones. I often carry both a 7 megapixel digital camera and my iPhone. However, I find myself using my iPhone and Twitpic far more often than the digital camera. The reason is that I will sacrifice the detail that the digital camera provides for the ease and speed of taking and posting a picture from my iPhone. It is this same richness versus speed and ease of use battle that is shaping the delivery of online services.
