AOL alienates corporate clients

AOL calls its new Company Connection pricing scheme an "exciting opportunity." One corporate client is calling for a boycott.

CNET News staff
2 min read
America Online (AOL) is calling its new policy to begin charging companies $55,000 a year for a service they have been getting for free an "exciting opportunity."

Jeff Baudin calls it "ransom."

Baudin, president of MicroMat Computer Systems, a small Macintosh utilities and telephony company, is angry enough that he's calling for his fellow "Company Connection" members to boycott the service beginning Friday to protest the new fees.

"There's a general consensus of betrayal," Baudin said.

AOL has had an area called Company Connection for nearly a decade where computer companies can provide services to their customers such as software updates and technical support.

When the area was instituted, it was seen as a mutually beneficial deal: companies could reach customers who were AOL members and in turn, AOL could use the area to promote its service. Companies also heavily promoted AOL in their literature as part of the deal, Baudin said.

But when AOL restructured and implemented unlimited pricing in December, it looked at Company Connection and decided that the area basically provided free advertising to companies, said Myer Berlow, head of advertising for AOL.

"It occurred to us that these were essentially commercial ventures," he said. So AOL decided to start charging.

Baudin suspects the real motivation behind the charges was that AOL was no longer making any money from the area. When AOL had hourly pricing, the area generated a fair amount of revenue for the online company because people spent time there downloading software and asking technical questions, Baudin said.

But when AOL went to flat rate pricing, their incentive disappeared.

Baudin added that he wouldn't mind paying a smaller fee, but to companies with sales numbering in the low millions--if that high--$55,000 could mean a high-level staff position.

Baudin wants members on Friday to stop providing information to customers and instead send email letters to them explaining why.

He acknowledged, however, that there was little enthusiasm for a "strike."

Instead, many are just leaving quietly.

"I feel a bit abused," said Jerry Saperstein who runs FontBank, a typeface publisher. Saperstein said he was mostly upset by the "abrupt" way in which businesses were informed about the change. They received a brochure and cover letter that began, "America Online is offering an exciting opportunity exclusively to current AOL Company Connection partners," and then went on to explain that they would be billed mostly for services that they had previously gotten for free.

"The idea of spending $55,000 a year on tech support for our own users and AOL users is preposterous. It's a classic case of exploitation."

But, he added, "It's nothing I'd go to war over."