740,000 drops of red water in AOL's red ocean

They had everything. AOL created and swam in one of the bluest of blue oceans ever created in the tech field. AOL could, and should, have been Google; breathing down Microsoft's neck with their biggest worry being how to manage antitrust regulators around the world.

Instead AOL just announced they lost 740,000 subscribers and they're splitting the company in two. One part will work with internet access subscriptions and the other with Internet content.

AOL's original key elements: they eliminated tech jargon, reduced configuration options (this seems to be a common element in many BOS offerings), raised community, and created one-click logins. It worked: the growth was legendary.

Then, for some reason nobody seems to understand, AOL decided to start competing in the red. They fought hard for those dial-up subscriptions even as consumers left in droves -- and continue leaving -- for similar offerings from their local phone and cable carriers. They continually added more stuff: I'm not even sure what all the stuff was, or is, but it seemed like they cranked it out in an endless stream. Consumers responded the way they do when a company goes red; they left.

AOL: you were once great. Look to the six-paths through the lens of customers and non-customers. Do the hard work and find the right key elements. Have the courage to eliminate and reduce some of those, realizing this is tough. Raise another one or two sky high, and create something new (subject to the constraints articulated in the Create post). Live again, AOL. It's sad to see what feels like an old friend going through tough times; hop out of that red ocean you've been living in.

Remember, we thought Nintendo was dead too and look where they are now. Red oceans may be viable for awhile as you adjust your strategy to make sure you're continually reinventing yourself (look to the Pioneer-Migrator-Settler Chart for this) but, long-term, only healthy fish live in the blue.