Last weekend I was cleaning out a box of long-forgotten business research documents and notebooks that have travelled around with me from office to office over the years from Houston to Copenhagen, back to Houston, to Chicago, and ultimately back to Houston. As a broker and portfolio advisor in Denmark in part of 1995 and almost all of 1996, AOL was a company we either directly had accounts in, or, if not, we at least had to refer to it as "the" company to emulate when doing comparative analysis.

I found a Value Line research report from June 7, 1996, just over 10 years ago. Back then, AOL was not only independent, but it was not even listed on the NYSE -- the stock traded as AMER on NASDAQ. It was priced then at $54 and it had already had three two-for-one stock splits. Its market cap was deemed quite lofty at some $5.1 billion.

At that time you had to close your eyes if you were an investor because you almost never got to see the stock pull back that much. If it ever "went on sale" with more than a 10% correction, everyone piled in because they knew AOL was a beast.

This morning the Wall Street Journal [subscription required] reported that last week AOL presented to the Time Warner, Inc. (NYSE: TWX) board, a plan to give away all of AOL's content and services to subscribers who don't use AOL for dial-up access. While I admire TWX's willingness to take a risk, I would advise the board to get solid answers to some tough questions before proceeding.

According to the proposal, rumors of which Tobias Buckell covered last week, AOL subscribers who don't use its dial-up access services -- this includes those with high speed or dial-up access from other providers -- will have free access to AOL content, including its e-mail services. The report estimates, that this will cost AOL $2 billion in subscription revenue.

I think it's smart for AOL to think about separate strategies for its Internet Service Provision (ISP) and Web content businesses. As I argued in my book, Net Profit, ISP is a structurally unattractive industry -- distinct from the potentially more lucrative Web content business. AOL remains heavily dependent on the less lucrative ISP business which accounted for 84% of its $8.3 billion in revenue -- the balance going to the advertising accompanying AOL's content.