2 Million AOL Clients Quit in Last Year

SEC Subpoenas Top Execs, Washington Post Reports

AOL/America Online • AOL Pays $3 Million, Promises to Clean Up Cancellation Process • AOL Settles Florida Fraud Charges • AntiSpyware Group Targets AOL Release As Dangerous • AOL Heads Roll Over Data Leak • AOL Now Free ... Sort Of • AOL Takes More Hits In Press, On Internet • AOL's Problems Worsen as Consumer Complaints Mount • AOL Embarrassed by CNBC Report On Its Business Practices • E-Mail Taxation Without Representation • AOL, Yahoo Planning Postage Charges for Email • AOL Settles With NY, Agrees to Clean Up Cancellation Process • Ohio Settles Lawsuit With AOL • AOL Abandons Broadband • Ohio Latest to Sue AOL • AOL Loses 2 Million Clients, Faces Subpoenas • Class Action Accuses AOL of Double-Billing Scheme • AOL Offers to Settle Federal Charges --- Consumer Complaints • Cancellation Difficulties • Double-billing • "Free" Hours • Unauthorized Charges • Shop-Direct Complaints • Tech Support

October 22, 2003
America Online's customers are deserting at twice the rate previously reported, the company conceded today, and the New York Times reported that the Securities and Exchange Commission (SEC) has issued subpoenas to several top company officials.

AOL said that as of Sept. 30, it had 24.7 million U.S. subscribers compared with 26.7 million a year earlier. Additionally, the company said its advertising revenue dropped to $178 million in the third quarter, down a third from a year earlier.

The subscription losses are apparently accelerating. In its quarterly earnings report, the company said it lost 688,000 users during the most recent quarter. The company is losing subscribers to cheaper dial-up services and to broadband providers.

The subpoenas issued to Time Warner Chairman Richard D. Parsons, AOL founder Steve Case and others are part of the government's probe of AOL's booking of $400 million in revenue from transactions with Bertelsmann AG, a German media conglomerate.

The SEC has been investigating AOL's accounting practices, particularly involving its advertising sales and the methods it uses to count its subscribers.

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