First Take: AOL's bumpy road to Verizon deal

NEW YORK — Even before considering what AOL's future might be like as part of Verizon Communications you can't help but dwell on the company's notable — and oft-bumpy — history.

Prior to becoming a household name in the early to mid-1990s, America Online found itself competing in the nascent"dial-up" world against and online bulletin board pioneers such as CompuServe and GE-owned GeNie.

AOL ultimately prevailed against such rivals, in large measure because its dial-up disks were everywhere. Co-founder Steve Case's strategy was to acquire new subscribers at all costs.

Asked on the Quora Q&A site a few years ago how much AOL spent on distributing those CDs, Case responded: "I don't remember the total spending but do recall in the early 1990s our target was to spend 10% of lifetime revenue to get a new subscriber. At that time I believe the average subscriber life was about 25 months and revenue was about $350 so we spent about $35 to acquire subscribers."

The strategy worked. When AOL went public in 1992 it had less than 200,000 subscribers, Case recalled. A decade later the number was in the 25 million range, which helped drive the company's market capitalization up from $70 million at the time of the IPO to $150 billion right before the Time Warner merger. AOL by then popularized the catchphrase "You've Got Mail" and inspired a movie of the same name.

According to its most recent quarterly earnings report, AOL still boasts 2.1 million dial-up customers.

Of course, it was mostly downhill from there, with AOL Time Warner, as much as anyone, epitomizing the dotcom bust.

Now we are in a very different time but AOL is still somehow relevant enough to command a $4.4 billion purchase price out of Verizon. AOL has a stable of online properties that includes Huffington Post, TechCrunch and Engadget, but this deal appears to be as much about AOL's role in helping Verizon boost advertising and its ambitions in mobile video.

Can AOL help Verizon pull it off? That remains to be seen. But though written off many times, AOL's remarkable story hasn't reached its conclusion yet.

Email: ebaig@usatoday.com. Follow @edbaig on Twitter.