Can AOL remain relevant? The ISP business is shrinking quickly and the iron curtain, I mean walled garden has fallen and now they are inviting advertisers in to meet their audience. The question is do people care or even like AOL anymore.

Most people that know AOL, have tried to quit at one time. There is the famous AOL quit call that made the Today show that gives us all chills, but now AOL is changing. This time for the better. The company that put IMing on the map, but missed the social network revolution is now fighting for its life. If it fails, it's likely to be an arm of Google, Yahoo, MSN, and possibly IAC. If it recovers, it will battle with the big three for its fare share of the advertising pie.

I cheer for AOL for the same reason I cheer for MSN and Yahoo. Google is a front runner and I want to see someone kick their but, just like I used to cheer for Apple to take on Microsoft.

When you're behind and shrinking, the stakes grow and sometimes the willingness to make big moves comes with it. I get the feeling that AOL is beaten up, but still taking swings.

My Case

• They radically changed netscape to be like Digg. This is a big bet, and might be foolish, but they did it. Not everyone is willing to reposition an internet brand that costs 100s of million of dollars to make on the bet of user submitted stories. They should have bought Digg, but that's another post.
• You see them talking to all the little companies now. Everyone I know has met and talked with AOL now. They can't get meetings with Google, Yahoo and MSN, but AOL wants to talk with everyone. They are at least thinking small, which is the first step to getting big. I like this approach and think it's a winner. Yahoo used to do this, Microsoft tries, but AOL is doing it. I bet they make 5 to 10 small acquisitions in the next year in a highly diversifed web presence manner. Most likely buying small aggressive teams that can bring more fight and creativity to AOL.

AOL needs to tune their access business for the best economics possible and let it ride into the sunset and at the sametime reinvent itself as a portal player.

Here is a simple strategy for AOL

• New blood. Buy young aggressive companies and lock them up for four years. If you pay over $50 million, you are thinking two big.
• Force out the people that led you here. Basically, don't count on the same thinkers, get new ones.
• Forgo short term profits. You need to grow your audience. And remember the part about the same level of thinking. Don't buy traffic like you did subscribers. Buy inventive products that will keep the Moms happy and the Kids chatting.
• Play to your strengths. You'll never be a great technology or software company, but you can be a great service and information company. Concentrate on giving users what they want.

It may have been one of the biggest scams of funny money when AOL bought Time Warner, but now we are seeing them scrap. I like it and wish them luck.