Creating Your Market Entry Strategy

Case In Point: Steve Case and America Online

Steven Case created America Online from scratch into the world’s largest online service by making the power of the Internet available to the average consumer. He describes his source of pain. “In 1982, I bought my first computer and wanted to hook it up and be part of this online world, and I went to great lengths to make it happen.

It took many months, and hundreds of dollars to get the modem to work with the software to work with the cable to work with the computer to actually connect to this world. So it was very frustrating.”

In 1985 at a time when General Electric launched Genie online services, and IBM and Sears together launched Prodigy online services, Case launched Q-Link, an online service based in Virginia. In the early 1990s he watched the development of modems and believed that faster modems would become commoditized in the near future which would mean more potential customers for his online service.

In 1991 he changed the name of his business to America Online (AOL) and he took the company public in 1992. By fall 1994 they had one million users plugging into the Internet through AOL. Between 1992 and 1999 AOL added more than 13 million subscribers. That is more new subscribers than The New York Times and The Washington Post together have added in the past 50 years.

In 2003, America Online, now the Internet division of AOL Time Warner, is the world’s largest Internet access provider (with more than 35 million subscribers using its AOL online service). Nearly 400 million emails are sent and received daily through the AOL network; 13.4 billion Web pages served up daily, and more than 2.1 billion instant messages are sent daily.