- While America Online recently recorded its first ever drop in subscribers, Herndon-based Road Runner LLC posted a double-digit percentage increase. Road Runner says it provides one-stop shopping for computer users who want maximum speed, compelling content and “always on” Internet access, making the service sound like a souped-up version of AOL.
“Road Runner is easy to get, easy to use,” and offers “lightning fast connections” and “unique content,” its ads say. At $44.95 a month, the service is sometimes promoted by sales associates as a better value than America Online.
This would all be business as usual, except there’s a catch: America Online and Road Runner are both owned by media giant AOL Time Warner Inc. Nevertheless, the services compete rather than coordinating their business strategies, angering AOL founder Steve Case, whose vision of America Online benefiting from ties to Time Warner Cable is losing out to power struggles.
….Time Warner Cable treats Road Runner, which has roughly 300 employees in Northern Virginia, as the house brand, offering it first when customers choose an Internet provider to go along with their high-speed cable connection. America Online, still struggling to come up with a viable high-speed strategy, is promoted no differently by Time Warner Cable than Microsoft Corp.’s MSN, EarthLink Inc. and other AOL competitors would be.
“It’s not an issue for us at this division,” said Time Warner Cable spokesman Mark Harrad, who added that Road Runner has received multiple awards for customer quality and service.
Joe Laszlo, a senior analyst with Jupiter Research, said combining America Online with Road Runner would have created the dominant national Internet provider for dial-up and high-speed connections. He said the services don’t cooperate because “turf wars” within AOL Time Warner have gotten in the way.
“It is kind of sad,” Laszlo said. “There was an opportunity missed to promote AOL on Time Warner systems, and that has definitely weakened AOL’s position in broadband. If they had combined forces with Road Runner . . . AOL would clearly be in the lead right now as far as broadband subscribers go. Road Runner could have stuck around as the value brand or the alternate brand.”
….There is virtually no evidence of cooperation with America Online on Road Runner’s Web site. The site, for instance, offers to help people find a high-speed provider if they simply type in an address. Typing in America Online’s own corporate address yields a referral not to AOL Broadband but to another rival cable firm, Adelphia Communications Corp. Road Runner itself is available primarily in markets served by Time Warner Cable.
At this stage, Road Runner and Time Warner Cable have their own momentum, analysts said, making it unclear how much coordination is possible.
“The window of opportunity has closed,” Laszlo said. “It is hard to see them driving any sort of deal now that makes it worthwhile for Time Warner to demote Road Runner in favor of AOL.” [Washington Post]