AOL Ends Dial-Up Service - October 16, 2025

Using Your Phone Line To Find Out “You’ve Got Mail”

It seems like every morning starts with some new information about the ways in which Artificial Intelligence is going to impact our lives, or how much money is being invested in AI, or the data centres that house AI technology. With the world experiencing a technology revolution because of AI, the likes of which we haven’t seen since the dawn of the internet, I was really surprised to read that internet pioneers AOL (America Online) were ending its dial-up internet access service.  “What!? People still use dial-up?” was my initial reaction; But sure enough Yahoo Inc., the owners of AOL recently announced that they are no longer offering dial-up access to the internet to those customers still accessing the internet this way. It really surprised me to hear that; on one hand we are talking about computers/robots emulating humans and replacing people for certain tasks; and on the other hand there were people that still access the internet via dial-up service! 

For those that are unfamiliar with AOL, here is a brief history: 

AOL users engaged with the internet via dial-up modems and their telephone landlines, which made infamous sounds when connecting online -  a series of beeps and buzzes heard over the phone; this came with the frustrations of being kicked off the internet if anyone else at home needed the landline for another phone call.

AOL became the front door to the internet for millions of households.  It offered an all-in-one online experience through a subscription-based model that included: email; instant messaging (AIM – AOL Instant Messenger); chat rooms & forums; news, games; shopping;  and a built-in web browser. By the late 1990s, AOL was the largest internet service provider (ISP) in the US, with over 25 million subscribers. AOL CDs offering “free hours” of internet were everywhere — in magazines, mail, and stores. 

AOL’s biggest contributions included: popularising the internet for everyday people; introducing mass email (“You’ve got mail” was a catchphrase that greeted users who checked their inboxes in AOL email; this was famously displayed in the 1998 film starring Tom Hanks and Meg Ryan, of the same name); instant messaging, and online communities; it helped shape the first digital media business model; and, the rise and fall of AOL became a classic lesson in how fast technology changes.

In 2000, AOL merged with Time Warner in a $165 billion deal — then the largest merger in U.S. history. The business theory behind the merger was to combine AOL’s internet reach with Time Warner’s vast media empire (CNN, HBO, Warner Bros., etc.). The deal turned out to be one of the worst business disasters in corporate history, for the following reasons: the dot-com bubble burst in 2000–01; AOL’s subscriber growth stalled as broadband access to the internet became common; and, the companies (Time Warner and AOL) clashed culturally (old media vs. new tech).  

In 2025, Why Was There Still Dial-Up Service?

Broadband (DSL, cable, and fiber) began replacing dial-up around 2000–2005. Broadband offered “always-on” connections to the internet, and access speeds hundreds of times faster. By 2015, fewer than 2% of U.S. households still used dial-up. By 2023, according to Census Bureau data, an estimated 163 thousand households in the United States were using dial-up alone to get online; that represented just over 0.13% of all homes with internet subscriptions nationwide. This doesn’t seem like a lot of people when you consider the population of the United States is 341 million, but the fact that anyone at all was still accessing the internet by phone-line dial-up is surprising. What happened to “broadband for all!”?

Here are the reasons why Yahoo (AOL’s current owner) kept the dial-up service alive until 2025:

• Legacy User Base – Into the early 2020s, a small but loyal group of users—particularly in rural or underserved areas—still relied on dial-up because broadband wasn’t available or affordable. AOL wanted to continue serving them.

• Brand and Revenue Maintenance – Dial-up subscriptions, though small in number, still generated some revenue. Maintaining the service allowed AOL to keep a foothold in the market and continue providing its email and other internet services tied to those accounts.

• Gradual Transition Strategy – Shutting down a service abruptly risked losing customers and creating backlash. By keeping dial-up active for decades, AOL could gradually transition users to its broadband or email-only offerings, slowly modernizing its user base.

• Technical Simplicity and Low Costs – Supporting dial-up didn’t require huge ongoing investment relative to the revenue it generated. The infrastructure was largely stable, fully paid for, and could run with minimal upgrades, so there was little incentive to retire it until the numbers became negligible.

In doing research for this article I learned that AOL’s dial-up internet service wasn’t the only relic still around until recently, from the internet’s early days: Microsoft retired video calling service Skype just earlier this year — as well as Internet Explorer back in 2022.   

One of the reasons for ending AOL’s dial-up service now is tied to its owner’s plans to sell AOL.  As of October 2025, Yahoo is reportedly in advanced negotiations to sell AOL to Italian technology company Bending Spoons for approximately $1.4 billion. The proposed sale price is a significant markdown from AOL's peak valuation of $165 billion back in the year 2000.  I’m surprised that AOL is valued at $1.4 billion today.  

According to the International Telecommunication Union (ITU), the United Nations specialized agency for information and communication technologies, there are currently three billion people in the world without broadband access to the internet; that’s 38% of the world’s population.  It’s estimated that it will cost $500 billion to provide basic broadband internet to these people.  It is further estimated that it will cost almost three trillion dollars to supply high quality broadband to these three billion people. Let’s use the median of these two numbers and say it will cost almost two trillion dollars to provide decent broadband access to those that don’t have it today.  How much do you think has been spent on artificial intelligence over the last five years?  $4.8 trillion…2.4x the amount it would take to equip the unconnected world with broadband internet.  IDC forecasts annual AI spending will reach $632 billion by 2028. 

Having spent most of my career working with technology startups, I appreciate the commercial appetite to fund innovation.  But as technological innovation improves people’s lives and makes good returns for investors, we have to make sure we bring everyone along with us.  The first internet wave left many people behind and the world is still dealing with the angst that created (i.e. MAGA).  Let’s not make the same mistake again with the AI wave.