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AOL’s dialup business might finally, finally die in 5 years

Published May 7th, 2014 9:30PM EDT

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Millions of Americans are still trapped in AOL dialup hell… but they might not be for much longer. Jackdaw Research chief Jan Dawson has put together a handy chart showing AOL’s operating income before depreciation and amortization (OIBDA) by segment and he concludes that, based on AOL’s current dialup subscriber churn rate, the company “has another 5 years before dialup business dies and it has to find a new source of profit.”

And as Quartz explains, AOL’s dialup business is still shockingly profitable, mostly because its customers are only sticking with it since they don’t have any alternatives where they live, which lets AOL squeeze ever-more money from them. So although AOL’s subscriber numbers have continued to drop and now stand at just 2.42 million, the company is still making a lot of money from them because average revenue per user for dialup services has continued to rise.

Eventually, though, AOL’s dialup customers are going to find some alternative and flee from their longtime purgatory, which will leave AOL in a very tight spot since its effort at creating a local news empire has flamed out and it’s still not consistently making money with The Huffington Post even though that website is a traffic goldmine.

Brad Reed
Brad Reed Staff Writer

Brad Reed has written about technology for over eight years at and Network World. Prior to that, he wrote freelance stories for political publications such as AlterNet and the American Prospect. He has a Master's Degree in Business and Economics Journalism from Boston University.