Verizon will pick up more than 2 million dial-up subscribers in AOL deal
In its $4.4 billion deal to buy AOL, Verizon isn't just picking up Huffington Post and TechCrunch -- they are also getting more than 2 million dial-up customers.
In the 1990s, AOL helped ease millions of Americans online with a massive amount of free trial CDs aimed at hooking users into its walled garden version of the Web. As faster broadband service became available, dial-up subscriptions fell quickly.
But AOL still has 2.16 million dial-up customers in the United States, according to the company's first quarter earnings report this year. And they bring in a shocking amount of money -- an average of nearly $21 per month in revenue per subscriber.
Not all of those users are actually paying for the service: Those figures include "subscribers participating in introductory free-trial periods and subscribers that are paying no monthly fees or reduced monthly fees through member service and retention programs," according to the company's earnings statement.
In Securities and Exchange Commission filing from last week, AOL said its average subscriber has been paying for dial-up service for almost 15 years. For some AOL subscribers, dial-up may be their only option. Millions of Americans, many of them in rural areas, still lack access to wired high-speed Internet access in their homes, according to the Federal Communications Commission.
And AOL's subscriptions are sometimes packaged with other services geared toward older or less tech-savvy users -- such as tech support, computer security services and digital estate planning help.
Still, AOL's dial-up subscriptions are on the decline -- falling 11 percent in the first quarter compared to the same period last year, according to the earnings statement. But the company is squeezing more out of each subscriber -- with revenue actually up 7 percent per user compared to this period last year.
It's unclear what exactly will happen to these subscribers in the wake of the acquisition: Verizon stopped offering dial-up to new subscribers in May 2012, according to its website -- although existing subscribers could continue their service.
Neither AOL nor Verizon immediately responded to a request for comment on the plan for current AOL subscribers.