Attorneys general threatened to sue AOL for promising service it couldn't deliver. Wall Street analysts argued that this was the sort of problem that would drive AOL users into the arms of other Net firms. Though Case settled with the state officials, it took him months to win back consumer confidence. Not to mention a couple of hundred million dollars. In the past six months, AOL has learned the hard way about the fixed costs associated with building an empire.
Members still complain of being shut out during busy times.
Yet the slowing of AOL's once brisk cancellation rate and the acceleration of new arrivals seem to show that Case is at least one step ahead of the complaints. Fortunately, they were smart enough to pull it out. Successful as AOL has been, Case knows that his company could still end up being the RC Cola of the Net rather than the Coca-Cola. With the Web spilling onto platforms as diverse as TV sets and cell phones, Case sees that his business may be preparing for another big shift. Even though we've been at it for a decade, this is like the second inning in terms of the development of this medium.