AOL is losing money on itself, too. In the last five years its valuation (what people think it might be worth if sold to another entity) has dropped from the $20 billion Google pegged it at in 2005 to a mere $4 billion to $4.3 billion, according to several analysts.
If you cancel AOL but can’t get them to stop billing you, how does this affect you? It doesn’t. It can be hard to fight AOL for your money back, but it can be done. In the meantime, you can comfort yourself with thoughts of karmic retribution visited upon the company by itself, which has seen it’s value sliced, diced and basically diminished to nothing over the years by its own mismanagement.
I have a tutorial to write and an older post to rework and republish this week, and I’d like to do a rip, I mean, a review of myAOL and Mgnet, but I’ll touch quickly on what’s going on this week with AOL…wow, not much isn’t.
First off, if you haven’t heard about AOL’s class-action settlement with 47 states by now (or 48, if you count the one state that didn’t participate but is covered, and if you conveniently forget the District of Columbia altogether, which is also covered) you probably don’t have a pulse.
As I wrote in Does AOL print its own money?, AOL has spent years paying for dozens of fraudulent escapades involving falsified advertising revenue and non-existent deals dreamed up between them and dozens of smaller Internet companies during their heyday and sequential dot-bust.
While a running tally I’ve kept on fraud settlements has them paying over $3,995,000,000 to date, you can now tack on an additional $2.8 billion they must cough up to cover themselves and avoid going to trial. As I pointed out in my other post, AOL depleted the “reserve” account that pays these settlements back in March, when they ran into the red in order to cover a $144 million settlement reached with The Ohio Bureau of Workers Compensation and five of their state pension funds:
In news that’s just the old being made new again, AOL settled complaints with 48 states yesterday, according to Reuters.
“The resolution announced Wednesday was driven by a deluge of complaints from AOL customers who said they tried to close their accounts, only to be thwarted in their attempts or discover they were still being billed for services that they thought had been canceled.
The outcry triggered a multi-state investigation that would have culminated in a lawsuit if AOL hadn’t agreed to ante up and change its ways, said David Tiede, a deputy attorney general in California.
California was among the states that played a leading role in the settlement. New York and Florida were the only states that didn’t participate in the inquiry.“
03-04-2007: Updated and recalculated after AOL’s latest settlement. Updated again 03-11-2007, 4-02-2007 and 5-10-2007.
AOL is painting their bad news in a positive light. Now they claim a recent stack of accounting fraud lawsuits against them are going to be paid for with a special fund that they set up years ago with $20 million, that they added another $600 million to in Dec. 2006. They’re wrong. They’re not even close to telling the truth.
It’s a slow news day so I’ll catch up on the dot-com bust as it relates to AOL. Their double-dealing and questionable activities near the end of the first dot-com bubble (we’re in the second one right now, hence Bubble 2.0) have taken four years to work through court. In fact, the show’s not over yet, but I’m sure the final acts will turn out no more exciting than parts One and Two did.
While at least three AOL executives could’ve used some jail time to straighten out their moral compasses (the settlement document shows these crooks came as close as possible to admitting their misdeeds without saying “I’m guilty”) they walked out of court free men with tears in their eyes and no doubt thanking God for good lawyers.
Such is the way in a world where money, power, and good legal representation gets you further than values, ethics, and good judgment ever will; the latter, last I heard, merely gets you laughed out of Silicon Valley. Welcome to the dot-com cesspool; the star of our show today is AOL.
Kent D. Wakeford, former executive affairs director of AOL’s now-defunct NY business unit. It’s a real award (as far as he was concerned) and was bestowed upon him by his former boss, David Colburn. In Colburn’s speech about it, he called Kent’s deal-making with PurchasePro, their former business partner:
…““science fiction,” according to “Stealing Time,” a book by Washington Post reporter Alec Klein on the company’s accounting practices. Colburn has said he did not recall using that term. Colleagues laughed as Wakeford accepted the award, thanking AOL for its help, Klein wrote.“