AOL: business is fine, but sorry you are sacked

The pink slips are flying at AOL as the company tries to make a transition from a subscription-based ISP (Internet Service Provider) to an advertisement supported portal company.

Over the next couple of months, AOL will lay off 2,000 people out of a worldwide workforce of 10,000, according to a letter to company employees sent by CEO Randy Falco today, said a report in The Washington Post. These staff reductions begin Tuesday.

In a mail to AOL employees, Falco said, “Importantly, we're taking the business global. We're extending AOL's reach into seven new countries this year while globalizing our product development efforts. By the end of next year, AOL will have a presence in 30 countries. That's a remarkable achievement in a relatively short period of time”.

For all his self congratulation, Falco by expanding into other markets may be over-committing AOL, taking it further down the tube. Outside the US, AOL does not have a strong brand or the stickiness that a portal requires. In the US, a lot of users still swear by AIM, AOL’s Instant Messenger, and some use its email service too.

But in most other countries, instant messengers and email services from Yahoo Inc., MSN, and Google Inc. already have a head start. These are the applications that generally bring users to a portal.

Unless AOL comes up with a new killer application, there isn’t a way they can dislodge the current players in each market. Many countries have their own very strong local players.

AOL.com has a traffic rank of 51 to Yahoo.com’s first place, according to traffic rankings from Alexa Internet Inc.

Bangalore: paying the price of economic boom ?

Bangalore, India’s software and call center outsourcing hub, is slowly emerging as a marketer's dream, with its whole lot of atomized and bored people. Offer them the malls and they rush there hoping for companionship and excitement that small communities once offered.

Why is the city becoming atomized ? Analysts in the city say that it has got to do with ever-shifting neighborhoods. The neighborhoods are changing - once upon a time they were stable communities of people who knew each other very well from birth through puberty through adulthood and old age. Neighbors once gossiped about one another, but they cared to gossip ! Conversation was possible because there was a common history, common issues, and everyone knew each other very well.

Now a neighbor can be a call center worker whose timings are not the same as yours. “If he disappears and the cops come asking, I can't say a lot about him...because all I got from him in the last six months was a sleepy "Hi", and yes he once told me was moving jobs to another city,” said Shankar, a long-standing resident of the city, about his neighbor.

The police are more likely to come asking about neighbors these days because the crime rate is going higher with muggings, rapes, suicides on the rise -- a by product of stressful lives, migratory populations, and resentment over a yawning economic divide, according to the pundits.

“The folks on the other side where I live are IT professionals,” said Shankar. “They have been around for one-year, and they are leaving for the US in the next six months. We have promised to write to each other.”

Just across from Shankar’s home are two gated apartments – a new phenomenon in Bangalore, patronized and affordable only by the very rich among the city’s software professionals and corporate executives. “I can only tell them from their lovely cars that zip in and out,” he said.

“I used to like to go and chat with some old friends over "chai" (tea), but we gave up because we couldn't make it because of different working hours, and some of them travel a lot,” said R. Ganesh, another second-generation resident of the city. When Ganesh had the time, he couldn't get parking even two kilometers from the teashop.

As Bangalore gets more affluent as a result of the boom in outsourcing to the city the number of cars, including expensive foreign cars, has gone up, even as the local government continues to neglect the roads and other infrastructure. A construction boom has also cut into public spaces.

“So now we use the technology wonder called "chat" on Instant Messenger. We :)) instead of actually smiling. I haven't figured out yet how one does a back-slap on IM, or a tight hug for a very good friend,” Ganesh said.

Enter the marketing guys who no longer offer only products, but whole experiences and a life style around them. “The new mantra is why are you being old-fashioned, clinging to that old tea shop which will get brought down anyways to give way to a sky rise building in glass, concrete, and steel ? Go instead for a wild-life safari, or join the golf club, or go to the swanky malls that have come up !,” said Ganesh.