A Short History of AOL, From 'You've Got Mail' to Verizon

NEW YORK (TheStreet) -- Those of us who can remember back to the early days of America Online probably recall that cringe-inducing modem sound and the "you've got mail" sound effect.

But did you know that AOL  (AOL) actually started out as a completely different company that had nothing to do with email or chat rooms?

The company that today owns Huffington Post, TechCrunch and other media properties started in the early 1980s as Control Video Corp., which sold a game downloading service for the Atari video game console.

The venture didn't last and was eventually reorganized as Quantum Computer Services in 1985. Quantum offered an online service named Q-Link. It launched its first instant messenger program in 1989 and it was then the famous "you've got mail" line was born, according to AOL's official history.

The company was renamed America Online in 1991 and went public the following year. With Verizon's (VZ) announcement that it plans to acquire AOL for $4.4 billion, TheStreet takes readers through some major developments at the company since it went public in 1992. Click through to check out some of the most important moments of AOL's story. And when you're done be sure to check out how AOL's logos have changed over the years.

1. 1992 -- Going Public

Under CEO Steve Case, who helped reform the defunct Control Video Corp. into America Online, the company began trading on the Nasdaq Stock Market on March 19, 1992 under the ticker "AOL." The IPO was priced at $11.50. Shares rose 28.3% in its first day or trading to close at $14.75.


2. 1995 -- AOL.com Homepage Debut

The company expands its products and services as more users sign on to the Internet. America Online debuts the AOL.com home page.


3. 1996 -- The Beginnings of Chat

AOL launches its online "Buddy List" chat. That same year AOL reached a deal with Microsoft (MSFT) to bundle its Internet service with its Windows 95 software and making Internet Explorer the default Web browser for AOL.


4. 1998 -- Acquiring the Competition

AOL acquires CompuServe's online service business, then owned by H&R Block (HRB), through a complicated transaction with WorldCom.

The transaction brought AOL's membership base to nearly 12 million at the time. (Today it is at roughly 200 million, according to the company's Web site.)

The acquisition of "CompuServe's interactive services will help fuel our global expansion -- especially in the critical European marketplace, which we believe is poised for tremendous growth," AOL CEO Steve Case said in the September 1997 deal announcement. "The expansion of our international reach will help make the interactive medium a global phenomenon and provide us with new opportunities to apply our scale, expertise and resources."



5. 1999 -- Crawling the Web

AOL acquires Web browser Netscape for $4.2 billion on March 17, 1999.


6. 2001 -- Mega Mergerg

AOL and Time Warner (TWX) merge on Jan. 11, 2001 creating AOL Time Warner, celebrated in the photo above by AOL CEO Steve Case (left) and his counterpart at Time Warner, Gerald Levin. The company traded under the ticker "AOL." The deal, valued at $350 billion, created the world's largest media company at the time. In October 2003, the company dropped the AOL portion of its corporate name and began trading under the "TWX" ticker.

The deal was hailed as historic at the time but soon turned to disaster. Media in general was already on a precipice of transforming from an analog world to a digital world. Add in the dot-com bust just a few months after the deal closed along with quickly changing technology and things suddenly didn't look so good for the marriage. AOL, known for its dial-up online Internet service, was being outmoded by the high-speed Internet access that eventually became ubiquitous. AOL was also investigated by the Securities and Exchange Commission and by the Department of Justice for allegedly inflating its ad revenue. The scandal led to Case stepping down from the conglomerate. Levin had previously retired in 2001.

To get the full story on the AOL-Time Warner deal, read this excellent January 2010 obituary for the merger from The New York Times.


7. 2004 -- Moving More Into Media

AOL acquires Advertising.com for $435 million in a move to shift its business model from subscription-based to advertising-based. "We intend to play big across the board in all the forms of Internet advertising," then-Chairman and CEO of AOL Jonathan Miller said at the time of the deal.

Must Read: How Verizon Is Going to Use Your Personal Data Once It Buys AOL


8.2005 -- Google Gets In

Google (GOOGL) purchases a 5% stake for $1 billion.


9. 2009 -- New Leadership

Tim Armstrong is named AOL's chairman and chief executive on March 12, 2009.


10. 2009 -- Un-Merging the Merger

Time Warner announces in May 2009 that it would spin off AOL as an independent company. The divestiture was completed in December 2009.


11. 2009 -- More Media

AOL acquires Patch Media, a group of community news Web sites, in June 2009. Patch Media was co-founded by Tim Armstrong in 2007.



12. 2010 -- More Media

AOL acquires TechCrunch. The deal was announced at the 2010 TechCrunch Disrupt Conference in September 2010.


13. 2011 -- The Big Media Acquisition

AOL acquires The Huffington Post for $315 million in March 2011. Arianna Huffington, the publication's co-founder and editor-in-chief, became AOL's president and editor-in-chief of The Huffington Post Media Group.

The group encompassed all Huffington Post and AOL content, such as Engadget, TechCrunch, Moviefone, MapQuest, PopEater, AOL Music, AOL Latino, and Patch.


14. 2013 -- On the Rebound

AOL reports its first quarterly revenue growth in eight years for the fiscal fourth quarter of 2012, a result of reinventing company from Internet provider to a digital media company.


15. 2014 -- Bye, Bye Patch

AOL spins off Patch in January 2014 by selling a majority ownership to Hale Global.


16. 2014 -- New Investors

Activist investor Starboard Value turns its eye toward AOL. The firm announced in November 2014 that it acquired a 2.4% stake in the company. Starboard had previously acquired shares in Yahoo! (YHOO) and suggested to its CEO Marissa Mayer to consider a combination of the two companies.


17. 2015 -- The New Owners

Verizon (VZ) plans to acquire AOL for $4.4 billion, or $50 a share. Shares spiked in early trading on the news.

 

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