Carphone Warehouse buys AOL UK

The Carphone Warehouse has bought AOL UK for £370m which will make the mobile phone retailer's TalkTalk internet servies provider the thrid largest in the world. The company had hoped for a £600m selling price and Orange and Sky were also interested in buying it. 600,000 of AOL UK's customers out of the 1.5m are still using the dial-up connection. In 2006, AOL informed customers that it would be increasing the price of its dial-up access. The increase was part of an effort to migrate the service's remaining dial-up users to broadband, as the increased price was the same price they had been charging for monthly DSL access.

Since its merger with Time Warner, the value of AOL has dropped from its $200 billion high and it has seen similar losses among its subscription rate. It has since attempted to reposition itself as a content provider similar to companies such as Yahoo! as opposed to an Internet service provider which delivered content only to subscribers in what was termed a "walled garden". In 2005, AOL broadcast the Live 8 concert live over the Internet, and thousands of users downloaded clips of the concert over the following months. This was done in order to make up the lost profits and attract more customers. This shows how AOL were trying very hard to regain profits. It even gave away freebies in August 2006 such as xdrive.

I think that Carphone Warehouse buying AOL UK would benefit the customers as it clearly shows the company were not very good at doing this themselves. Although Carphone were bought AOL to help recover their own Broadband losses, maybe this will help to regenerate the Internet service provider.

http://media.guardian.co.uk/city/story/0,,1892842,00.html