The other week TechCrunch’s Sam Sethi posted the rather pithy paragraph:
“Carphone Warehouse have taken the cost headache away from AOL UK and paid AOL for doing so. Equally they now send those very same AOL UK customers back to AOL plus CPW’s own broadband customers and again CPW pay for the privilege of having them sign up to AOL services.”
This pretty much summed-up the bizarre CPW-buys-AOL’s-access-customers story. But now CPW has a further headache on its hands. In a Die Welt interview with AOL chief executive Jonathan Miller published on Saturday, he admitted AOL’s sales may shrink for the next two years as it gives away services to win more users and attract advertising.
According to Miller “In the past, we invested a lot of money in the infrastructure for the access business and in winning customers. That’s over now.”
That’s over now? Does someone want to tell CPW’s Charles Dunstone that the guy he just paid £370m to openly thinks he bought a dog? I’d love to be a fly on the wall on Monday morning in that particular office.
Interestingly, Miller added that in the in the wake of Google’s deal to buy YouTube for $1.65 billion earlier this month (not to mention News Corp.’s $580 million acquisition of MySpace.com) AOL would “definitely” be a buyer of web businesses in Europe. So this suggests that AOL will use its new cash to acquire businesses which might well compete on a number of levels with CPW – perhaps UK and European social networking sites which have a greater degree of stickiness than the long-in-the-tooth default home pages which CPW will be flogging to its new access customers.
And there are other woes. CPW’s share price has been dropping after Vodafone cut their contract in favour of Phones4u and the other operators are considering doing the same as CPW considers becoming a mobile operator. At the moment their share price is 290p and could drop to 150p according to independent research house Arete if the other operators abandon CPW. What next for CPW? Reviving Boo.com? We can only dream…