AOL recently announced it is laying off over 1,300 employees, shutting down one call center entirely while making cuts in other areas. This comes after Ted Leonsis, Vice Chairman of America Online, Inc. and President of AOL's audience-based businesses, recently blogged about the Time-Warner's division's increase in ad revenues. If AOL is doing so right in that respect, where have they gone wrong? After all, layoffs don't occur when companies are doing well, right?

In news articles regarding the latest layoffs, practically a yearly experience the past few years, AOL spokesmen claimed that their customers are more "savvy and sophisticated" these days and don't utilize the call centers to the extent they did in the past. I think it's more because there are fewer and fewer members as time goes on and, by encountering outsourced help center personnel in India who work from scripts, many of the members don't bother calling as it's often an exercise in frustration.

Sorry, AOL. I don't buy it. The "savvy" line was already used for removing volunteer Community Leaders from the service when other factors were more likely the reason for ending that program. How many times will it be used to defend actions that result in less service to members who pay for AOL?

A few years ago, AOL's marketing focused on its members. In the recent turnaround to increase ad revenues, it's the members who have suffered. AOL brought down its "walled-garden" and opened content to anyone with a free AIM account. Yes, that's good for ad revenue; that's great for folks not paying for the service. But, what of the members, especially those who have stayed with the company for more than a decade, through the busy-signal days, the pay-per-minute days and the old Blue Bar of Eternity days? Why should customers of the service pay some of the highest fees to use AOL when AOL has virtually let everyone share the same for free?

What do they offer their customers that they aren't giving away for free to others? Hmmm... parental controls. Big deal, they can be found on most ISPs these days. Well, there's the new broadband connection touted in commercials! Oh, wait - that's not available in many, many areas. Um, well - the message boards!

Gulp, the new format is despised by a lot of the members and, though it's possible to have the old and new formats in existence, AOL is wiping out the old easily-loading board format "backdoors." Oh, and anyone with AIM can post on them for free without an AOL account. I've got it - the AOL Journals/Blogs! Nope, they have huge ad banners, no possibility of even related to content ads, no opportunity to run Google AdSense or anything commercial. Oh, and they're free to AIM accounts, too!