During the last week America Online has announced a number of changes to the way they are going to be doing business. Despite its media saturation, countless unsolicited cdrom mailings, and mainstream success all is not well at AOL and has not been for sometime. In the last four years America Online has lost more than 9 million subscribers.

Various well documented partnerships with other online companies, such as a special advertising relationship with Google, rumors of purchase by MSN, and attempts at a nation wide broadband venture, have all failed to return significant health to the company.

In another round of what some would call desperation moves AOL had made a number of services they used to charge for free. In an attempt to reach the broadband useing customers that have been fleeing AOL in droves AOL has now made its email and many of its softweare downloads free.

This point makes me wonder how AOL managed to continue in the belief that they could charge people for services that the industry standards set by Google, Yahoo, etc. have made free. Consumer expectations of free services from search engines has become higher over the years and AOL has lagged far behind.

The bad news change is that AOL has also announced plans to cut its workforce. The company expects to cut 5,000 jobs from its global workforce of 19,000.

“It sounds like the first shoe’s falling,” said David Hallerman, a researcher with the company eMarketer Inc. was quoted as saying in an AP story on the subject.”It’s clear that’s part of a large savings that AOL is going to have to go through. The biggest cost in any business is employees.”

True, and often the employees pay the biggest costs when belt tightening time comes.