America Online had no choice but to restructure, marketing professional says

Thursday, August 3, 2006

How does a company market itself after completely changing the way it does business? That's the question facing executives at the Internet service America Online, following news it will cease to market its subscription service in favor of a Web-based business supported by advertising.

Dr. David Strutton, chair of the Department of Marketing and Logistics at the University of North Texas, says AOL management had no choice. Their current business model simply wasn't working.

"Something should have been done two or three years ago. This restructuring is an effort to make the best of a bad situation. They couldn't continue to do what they had been doing," he says.

Strutton says while it's often difficult for large companies to change the way they do business, some has succeeded.

"Several years ago IBM leadership committed to making a change, moving from hardware to a business services corporation, and it was successful," he says. "J.C. Penney has been able to change its business model. But, on the other hand, look at the big three U.S. automakers. They have struggled to change their business model, and the results show."

Strutton says the key for a business trying to reinvent itself is to control costs.

"AOL needs to control its costs in order to be successful. Not spending the money to retain customers will be a cost savings," he says.

He adds, however that AOL will probably not be able to recapture its "halcyon days of market dominance."

"Consumers have so many more choices out there than when AOL was dominant," Strutton says.

Following the dot-com bust of the late 1990s, businesses were wary of relying on Internet advertising as a revenue stream. But Strutton says the market has stabilized, and AOL is right to consider it.

"The e-model is a viable one," he says. "In a fragmented market, advertisers have to spend money somewhere, and if they set precise targeting they will be successful."

UNT News Service Phone Number: (940) 565-2108

Category:

Latest News

Wally Linebarger
Wednesday, April 23, 2014

Seven films created by UNT students who are earning the Department of Radio, Television and Film's Master of Fine Arts degree in documentary film will be shown May 1 (Thursday) at UNT.

Tuesday, April 22, 2014

When Josh Gordesky learned that the UNT College of Information would be offering its doctoral degree program in learning technologies mostly online, he knew it was the right academic program for him.

Monday, April 21, 2014

Children in grades 8 through 12 can now register for summer camps in the University of North Texas College of Engineering, focusing on robotics, video and computer game development, mobile applications and computer science and engineering.

Monday, April 21, 2014

Katie Koestner, a date rape survivor, will speak at the University of North Texas as a part of Sexual Assault Awareness Month activities. The speech will take place at 7 p.m. on April 22 (Tuesday) in the Volleyball Gym located at 1536 S. Bonnie Brae, Building H, Denton.

Six-year old Ryan Lingo relaxes with his mother, Lucia Lingo, at Easter Seals No
Monday, April 21, 2014

Yummy Starts, a healthy eating program geared for kids with autism spectrum disorder, is helping kids with extreme selective eating habits. It's one of four behavioral intervention services offered at the Easter Seals North Texas Autism Treatment Program, a collaboration between the University of North Texas Department of Behavior Analysis and Easter Seals.