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An Online Comeback?

America Online's problems started when it began offering online access for a flat fee rather than on an hourly basis. Users swamped the system, and AOL, the world's largest online service, couldn't handle the overload. Subscribers faced busy signals and system crashes. Many sued.

In February, AOL was forced to reduce marketing, halt growth, extend an apology to all subscribers, and give refunds to some. Now AOL is back - or at least it's marketing efforts (running ads, distributing free discs) have resumed. But will subscribers see substantial improvements?

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AOL clearly has its work cut out for it, but we'd like to give it the benefit of the doubt. It has budgeted $350 million to improve connection speed. It's leasing about 50,000 additional modems. And it has promised to begin marketing slowly and incrementally.

Observers say AOL's experience shows what can happen when a company pursues growth at any cost. Let's hope it now will show how a company can respond when customers demand something better.

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