> they literally killed their own golden goose with stupidity

I think this statement misleads readers.

Was there organizational stupidity? Always, in every organization. What kept AOL from capitalizing on messaging and social media was lock-in to the subscriber business model, which when combined with market defined quarter-to-quarter EBIDTA driven board goals did not permit leaping at what the people at the core of the (AIM) business knew were the possibilities.

About the only thing they could have reasonably got away with would have been some kind of spin-out, which was always opposed by the subscriber revenue side's logic. Guess what: the folks with the multi-billion $ revenue stream win those arguments.

So, not stupid. Bound by the market and biz model, and not managed by suicidal execs. So in the long run it took folks with tens of billions of dollars of private risk money to take that leap.

Huh. Do you think investors are happy with how it turned out? Is there any significant interest group that's happy with how it turned out? If not, I'd have a hard time calling that smart.

I get that the people with power may have maximized their personal short-term financial outcomes. Which is certainly one way to define smart. But it strikes me as a very narrow one.

Look at Bezos, for example. He's spent the last couple of decades mostly ignoring what investors wants on a quarterly basis. And Amazon's gone from strength to strength because of it. If AOL's execs were smart, then that makes Bezos stupid. If that's the case, I guess I'd rather be dumb.

Yes, I think the investors were happy with that. They cashed in in a few quarters and moved on to invest in whatever was popping at the time, rather than having to squirrel away that money for another 5-10 years waiting for a high-risk venture to succeed. The folks who would have been happy to do that weren't buying AOL stock, they were putting their money in VC or private equity.

It's not like investors keep investing in the same company all their lives. They are probably happy that AOL made so many millions, and they probably invested in something else when they stopped making so many millions.

The execs are probably not as happy as the investors, but they are still somewhat isolated from the fate of each individual company via their golden parachutes, and they can find jobs as experienced execs in some other company.

There are approximately a fixed number of shares out there for a company. When you say investors moved on, that's not exactly true; somebody bought those shares. Somebody took the losses as AOL declined. And although some investors surely were happy to move on, they would surely would have been happier if the stock kept doing well, if they didn't have to move on.

Good investors diversify. It's possible that people who invested in AOL wanted them to keep the same business model and not try anything new, because they also invested in the other companies that were trying the new things.

True. But aside from Amazon who has gotten away with that? Yes, it's a great example. But it's an outlier's outlier.

Toyota's another great example. They went from Japan's post-WWII decimation to the world's largest car company. They did it through an intense focus on increasing customer value and reducing waste. US automakers couldn't come close to matching their quality or effectiveness. This despite Toyota's attempts to teach them through efforts like NUMMI.

I think their unique culture has declined over time, but it was still powerful enough to give us the Prius. Now ubiquitous, at the time, it was revolutionary.

If looking at the mark they made worldwide, I feel the Hilux serie is even stronger than the Prius. Of course "the Hilux war" is a bit harder to use in a marketing campaign.

Toyota owes A LOT to Bell Labs. I'm not so sure they can thank Wall Street for being unnaturally forgiving.

Sorry, I haven't heard about this. What does Toyota owe to Bell Labs?

Also, I'm not sure that Wall Street had much influence on Toyota. I can't easily tell when they first listed on US markets, but it was long after their company culture was set.

It's a strange feature of an economic system where the incentives require that successful participants blow themselves up. It requires that new=good and old=bad.

It doesn’t require that all. If anything, we are now seeing the opposite where top companies with considerable resources are remaining agile and innovative, effectively out-competing many new startups.

You're right... for now. We're seeing incredible concentration of wealth. Eventually they will become lazy and overly bureaucratic. Google, Apple, and Facebook in particular made their mark by dismissing customer service and by not addressing customer complaints, creating a culture of the "one true way". That culture + monopoly status will create (and is creating) a toxic miasma.

Apple has fairly good service if you show up at one of their stores with a broken device. Google and Facebook will also sometimes provide good service for actual paying customers, just not for users.

Also, the big technology corps are fighting their lack of internal innovation by buying smaller competitors. The executives are well aware of company lifecycle theory.

In technology especially, inertia is a liability. Not really surprising that most tech companies don't make it that long.

What is more surprising is that our attachment to institutions includes for-profit businesses. Really, we should, as customers/consumers, just go with the best service, but culturally we can't help but think that something is lost when an old, useless company goes away.

It's not required that successful businesses blow themselves up, but if they do make poor choices, they will suffer, and perhaps pay with their existence, for those choices.

It's not required. But just the same it should always be a what-if possibility. I'd say the poor choices come from a tunnel vision approach to those decisions.

Ultimately, in the context ans scope they are made, they are probably great decisions. However, reality is more far reaching.

Not always blow themselves up. Just continually reinvest. In their people, their products. The problem with our economic system is how short sighted corporations have become.

He isn't saying others shouldn't come along to replace them. Only that the AOL people realized their mistakes too late.

Mostly this, or that they didn't even really care. It was all about preservation and riding out the gravy train.

I'm not sure who or what you're arguing against. It's a good thing when fuckup companies are replaced by better ones; that doesn't mean it's a good thing that companies keep fucking up.

Tangentially, publicly-traded companies are strongly incentivized to keep growing at all costs until they collapse under their own weight, rather than just finding a market and serving it well year after year. I dunno if capitalism is to blame specifically, but it certainly seems perverse.

Yes it is. They didn't get the job done, so other firms stepped in and did it better.

Contrast this with communism, be where we'd all just be forced by law to use whatever AOL gave us, forever.

I know you're being facetious, but under a Communist society it's likely that there would be several popular hobby projects, similar to open source community's efforts. Things like AIM would be developed in private or cooperatively, just as modern software is written, but without the influence of capital and wage labour.

It is capitalism working as it should.

But it is still sad to see something that was such an important part of internet culture and history die like this.

But perhaps that is just the nostalgia speaking.