AOL UK Finds Profit Before Freeserve
Posted: 29th Jun, 2003 By: MarkJ
Despite having to face a downhill battle against arch ISP rival Freeserve for the past few years, AOL UK has finally managed to get one up on the competition by being the first to reach profitability:
As internet users have grown more experienced and spend more time online, they have increasingly switched to flat-rate subscription services that do not penalise them for the hours they stay connected. As a result, although AOL UK still has fewer customers, it has beaten Freeserve into profitability.
AOL UK made a modest debut profit last year, generating about £340m in revenue from 2.2m paying customers. Michael Lynton, the former Penguin boss who is chief executive of AOL Europe, says: The UK company is a gem. The brand is really strong and it has a better position than anybody else in the market.
Freeserve is also concentrating on promoting its flat-rate Anytime service and has attracted just over 1m customers. But it still has another 1.6m customers who do not pay a monthly fee and who are unlikely to switch to the high-speed broadband services where the future of the industry lies. Freeserves continuing losses, and financial pressure from its French owners, make it reluctant to invest wholeheartedly in broadband.
Mind you, The Sunday Times (newspaper) business article makes little mention of a small matter know as V.A.T and how AOL UK has managed to avoid paying it. No doubt Freeserve will point that out.
As internet users have grown more experienced and spend more time online, they have increasingly switched to flat-rate subscription services that do not penalise them for the hours they stay connected. As a result, although AOL UK still has fewer customers, it has beaten Freeserve into profitability.
AOL UK made a modest debut profit last year, generating about £340m in revenue from 2.2m paying customers. Michael Lynton, the former Penguin boss who is chief executive of AOL Europe, says: The UK company is a gem. The brand is really strong and it has a better position than anybody else in the market.
Freeserve is also concentrating on promoting its flat-rate Anytime service and has attracted just over 1m customers. But it still has another 1.6m customers who do not pay a monthly fee and who are unlikely to switch to the high-speed broadband services where the future of the industry lies. Freeserves continuing losses, and financial pressure from its French owners, make it reluctant to invest wholeheartedly in broadband.
Mind you, The Sunday Times (newspaper) business article makes little mention of a small matter know as V.A.T and how AOL UK has managed to avoid paying it. No doubt Freeserve will point that out.
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