AOL-Time Warner stock dropped 15 percent on the day Securities and Exchange Commission grandstanders announced they were pouncing on a hot tip from some newspaper. Then the Justice Department piled on, too. With journalists being delegated authority to sink stocks by unleashing the federal publicity hounds, we appear to have moved even further from the rule of law to the rule of lawyers.
Yet the company's stock was already down 60 percent this year before the government decided to give it another kick. And the worst surprises have come from AOL, not Time-Warner. AOL has been losing 7 million old subscribers a year and spending a fortune trying to replace them with new subscribers. Many new subscribers turned out to be freeloaders, some using fistfuls of ubiquitous AOL discs to flood AOL subscribers with junk e-mail -- spam.
AOL is choking on spam. The biggest Internet provider is naturally the biggest spam target. But AOL has made itself more vulnerable than other Internet providers for two reasons that would be surprisingly easy to fix.
Other Internet services offer outside spam-filtering services such as Brightmail, or at least make it easy for you to use Junk Spy or Spam Killer. AOL does none of these things.
Other Internet services allow the use of e-mail programs that let you automatically delete all future messages from an annoying sender (Outlook Express) or dump all designated spam into a special folder (Netscape Mail). AOL does none of these things. "AOL has the least capable and least compatible e-mail of any," writes PC Magazine, which compares it to "riding in a bumper car instead of a real automobile."
Actually, AOL has two potentially powerful tools that subscribers could use to thwart spam -- one for battling spam from the Internet and another for spam from AOL addresses. Unfortunately, AOL accidentally sabotaged both antispam devices, leaving longtime AOL users who are fed up with spam with no practical choice but to switch to a different provider.
Consider AOL's mail controls, which allow AOL subscribers to block up to 200 e-mail addresses. You could use up all 200 slots in a few weeks if you blocked every separate address. The trick is to block entire domain names -- everything sent from, say, fastbuck.com. The trouble is that AOL's e-mail program will not let you see the domain name without opening every unwanted e-mail, which is unwise and a waste of time.
Amazingly, AOL left only 1.5 inches for the e-mail address -- barely enough for 15 characters, while leaving a huge 7 inches for the subject. Ironically, if you use a different Internet service to pick up your e-mail at aol.com, you will then be privileged to see an extra inch of the e-mail address, enough to make mail controls workable. AOL users get a much stingier view.
One domain no AOL user would ever block with mail controls is aol.com, because that would block all e-mail from other AOL users. Unfortunately, AOL accounts are free for 45 days, and those days can be abused to send spam to legitimate AOL customers. Such terms-of-service (TOS) violations can be reported by clicking a "report to AOL" button. That is AOL's second line of defense, but such garbage requires human attention, and the volume has become much too huge to be cleaned up promptly.
I have received identical spam messages from more than a dozen authentic AOL accounts on a single day. Some spammer was using two handfuls of free discs at a time, in case AOL's overworked TOS-spam crew managed to block a few messages. The solution? Only distribute free discs one at a time, in magazines or by mail, rather than putting cartons of discs in stores that do not care how many anyone takes.
In short, AOL's new management team has to (1) patch the e-mail software to double the paltry 1.5 inches now reserved for the sender's address, and (2) stop making it so inviting for spammers to use free AOL trial subscriptions to send junk e-mail. Do those two things, and AOL will stop losing so many old customers and start keeping more new customers.
Having demonstrated how easy it would be to turn AOL around, my greatest fear is that I may soon be recruited to the AOL board. With Democrats and Republicans competing to see who can make a corporate director's job as dangerous as possible, I might prefer a free subscription and an appropriately effusive note of thanks from Steve Case.