Tuesday, August 18, 2009

This Web Icon Is Fading Fast

 

"You've got mail!"

(click)

From: AOL, a Time Warner (NYSE: TWX) company

To: You

Greetings, loyal AOL Mail user. Your email service of choice is fading into obscurity as many of your fellow AOLers are jumping ship. Just thought you should know.

Big love,

AOL

Yep, AOL sure is fading fast. While every major rival in the Web-based email game gained ground over the past year, AOL's once-ubiquitous mail service is losing customers.

Provider

U.S. Users

Year-Over-Year Change

Yahoo! (Nasdaq: YHOO) Mail

106 million

16%

Microsoft (Nasdaq: MSFT) Hotmail

47 million

8%

Google (Nasdaq: GOOG) Gmail

37 million

25%

AOL Mail

36.4 million

(22%)

Data from ComScore by way of TechCrunch.

Of course, Web-based mail isn't for everyone. A mail address from work, based on Microsoft Exchange or IBM (NYSE: IBM) Lotus Notes, is the main digital lifeline for lots of Americans. Many more are using the address that comes with a Comcast (Nasdaq: CMCSA) cable modem or an AT&T (NYSE: T) DSL line. Right now, Yahoo! and Microsoft are winning the race to make Web-mail converts out of these untold millions of Web denizens. And AOL is losing, big time.

This is very, very bad news for AOL. As fellow Fool Rick Munarriz said earlier this year, "The problem with AOL is that there doesn't seem to be a whole lot of growth beyond its free web-based email service."

When growth is dead even in that crucial eyeball-magnet department, I don't know how Time Warner expects to make money off this former blue-chip brand. Neither does Rick, and the mother ship is officially giving up on AOL. If you're a Time Warner shareholder today, I hope your investment thesis rests on the company's media assets. If you're hoping for a healthy return from the company's Internet ventures, well, I think you should get out right away.

 

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