AOL Brasil

» see aol.com.br as it lived, on the wayback machine

~ the eulogy ~

aol brasil was a portuguese-language portal sold as a dial-up isp on the back of a cd-mailing campaign. in 1999 i was fifteen, in ankara, on superonline dial-up via a 33.6k modem. the aol cds were a us object for me, the kind of thing that turned up in pc-magazine giveaways i did not subscribe to. aol brasil was a south-american version of the same physical-media marketing layer i was already not part of in turkey.

the parent company was america online latin america inc., a joint venture between aol time warner and the venezuelan grupo cisneros, with banco itau as the brazilian banking partner. the company set up in fort lauderdale and launched country by country. brazil opened in november 1999 (close enough). 50,000 paying subscribers signed up in the first three weeks.

the playbook was the same one that had built aol in the us in the late nineties: mail a cd to every middle-class household, install a closed-garden client that charged a monthly fee for dial-up access plus walled content. that worked in the us in 1996 because there was nothing better. it did not work in brazil in 1999 because uol and terra already had distribution agreements with the telcos, and because free-isp models were starting to take over. by 2002 the subscriber growth had stalled. by 2004 the parent company had 400,000 paying users across brazil, argentina, mexico and puerto rico, and was bleeding cash.

~ the dossier ~

~ the origin ~

in fairness. the bull case for aol brasil rested on the cisneros distribution machine. venevision, the venezuelan tv group, was supposed to provide a marketing channel into latin america. banco itau was supposed to bundle the service with banking accounts on the brazilian side, while aol time warner provided the playbook and the licensing for the aol brand.

on paper the partnership was the right shape. each partner brought something. in practice the brazilian subscriber base was being acquired through the same cd-and-rebate channel uol had already saturated, against a portal incumbent that had a year of head start and a deeper editorial team. aol brasil never found a real differentiator. its market share peaked in the low single digits.

~ the actual end ~

this part you had to be in the region for, and i was not. on 23 march 2005 the parent company filed an sec disclosure warning that it would run out of cash in the third quarter. the owners refused to put in more capital. america online latin america went into chapter 11 in june 2005 and the brazilian operation began winding down. on 17 march 2006 aol brasil switched the service off.

the wind-down was unusually orderly. close enough. subscribers were given until 17 march to use the dial-up connection, until 30 march to read the portal pages, and until 31 july to keep using their aol email address if they migrated to terra. terra had cut a deal to absorb the subscriber base. the @aol.com.br addresses kept resolving past the brand death by four months on terra's mail rails.

~ what got buried with it ~

what disappeared was the brazilian flank of aol's only serious attempt to operate as a global isp. the us brand carried on for years through dial-up customers and then through ad-supported portal traffic. the brazilian operation was the canary, the first piece of the global expansion that explicitly failed to clear.

the brazilian run had consumed around $200 million by the exame estimate. the cisneros group walked away from latin internet operations. banco itau wrote it off. aol time warner booked a goodwill impairment. the aol cd-mailer model was effectively buried for any non-us market with this shutdown, and the brand never tried a portuguese-language portal again.

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