Commodore could have owned AOL

Last Updated on January 10, 2025 by Dave Farquhar

30 years ago today, on November 1, 1994, AOL pulled the plug on Quantum Link. Quantum Link was a Commodore-oriented online service that was the direct ancestor of AOL. That makes today as good of a time as any to explore a tantalizing historical missed opportunity. Commodore could have owned AOL, a company that at its peak had a $200 billion valuation. Commodore, meanwhile, famously never reached its stated goal of $1 billion in annual sales.

How AOL walked into Commodore’s doors

The story of Quantum Link begins in 1985 with a pair of failing online services. An online service called Playnet approached Commodore in early 1985, hoping Commodore would be willing to acquire it. Playnet had an online service for the Commodore 64 that used a Stratus minicomputer, or a cluster of them, on the backend, with a graphical, easy to use front end that ran on the Commodore 64. Their innovation was storing the graphics locally on the C-64, with the Stratus simply telling the C-64 what locally stored graphics to display, rather than transferring the graphics each time.

Playnet did a soft launch in April 1984 and a full launch in October 1984. The problem was Playnet was too successful. They priced their subscription too inexpensively, which meant too many subscribers and not enough revenue to expand capacity. They had enough infrastructure to support 5,000 users, so if they ever grew much beyond that, the service slowed, and only got better when enough irritated subscribers cancelled.

Commodore vice president Clive Smith really liked the technology, but didn’t like Playnet’s management. Commodore’s management was notoriously bad, so that’s a scary thought. Smith told them Commodore wasn’t interested in an acquisition but would keep them in mind in case other opportunities came along.

Commodore meets Steve Case

Not long after, in the spring of 1985, a company called Control Video came along. Control Video was a failed online service for Atari video game consoles. It’s not that Control Video had a bad idea, it was that the market its service was built for disappeared as they were building the service. So they had some infrastructure, nothing to do with it, and not a lot of cash left. Their exit strategy was to sell out to Commodore, so Commodore could make an online service for their booming home computer market. They also met with Clive Smith.

Smith really liked Control Video’s management, which consisted of Jim Kimsey and Steve Case. But Commodore wasn’t interested in buying Control Video, just like they weren’t interested in buying Playnet.

How Commodore could have ended up owning AOL

Now, it could be I’m just really not that smart. But if I’ve got two companies who are fighting over the chance to sell their company to mine, and one of them has a great product but bad management, but the other one has great management but needs a product, here’s where my mind would be. Maybe I try to find a way to acquire both of those companies, keep the best staff from each company and RIF the rest, and turn the remaining employees loose with this great product and let the magic happen.

Commodore could have owned AOL, a $200 billion company.

But that’s not what Commodore did. Instead, Commodore played matchmaker. Clive Smith introduced the two companies to each other, suggested they work something out, and let him know if they needed any help promoting the result they came up with.

But Commodore didn’t offer any financial backing, so they didn’t receive any stake in the ownership. Even partial ownership of what became AOL would have been life-changing for Commodore.

How AOL became AOL

Control Video ended up licensing technology from Playnet for a mere $50,000, letting Playnet go out of business, and then buying the rights to all of the intellectual property at bankruptcy in 1987. By then, Control Video had renamed itself Quantum Computer Services.

Quantum Link was a big hit, reaching 10,000 subscribers in just two months and 50,000 subscribers a year after that. The service lasted 9 years, outliving Commodore. But as Quantum Computer Services could see Commodore’s market growth slowing, they stood up parallel services, using the same back end, and writing new front ends for other computers. By the end of the decade, they had four of them. None of them did all that well, but Steve Case had an idea. They would repurpose the service they built for Apple II computers, release a client for the Mac that connected to the same backend, rename it America Online, or AOL, then follow with a PC version of the client, slowly merging three of their four services into one larger service.

Wouldn’t Commodore have just messed AOL up anyway?

Now, if anyone could have messed this whole thing up, it was Commodore. Of course, Commodore wouldn’t have allowed this division to pursue an online service for Apple computers. They would have made them make one for Amiga computers instead. That wouldn’t have been a bad thing. Quantum Link’s joint venture with Lucasfilm, a multiplayer online universe called Habitat, proved too taxing for the C-64. But perhaps the Amiga could have pulled it off, and perhaps Habitat could have been the killer app the Amiga needed.

Commodore may not have been as keen to open up the service to IBM compatibles, which is what AOL was, but Commodore did sell a line of IBM compatible computers. It is possible that Steve Case could have convinced Commodore to let him build something for that market and profit off it. Opening it up to Apple computers would have been a tougher sell.

Like I said, an awful lot could have gone wrong. And Commodore was really good at doing things wrong.

But it’s fun to imagine what might have been. We know now that AOL was a doomed business model, and its merger with Time Warner was a notorious disaster. But AOL made a lot of money while it lasted, and even when they sold out to Verizon in 2015, they sold for $4.4 billion. When Escom bought Commodore, they only paid $50 million.

What would Commodore have done with AOL’s billions? Sadly, we’ll never know.

Dave Farquhar

David Farquhar is a computer security professional, entrepreneur, and author. He has written professionally about computers since 1991, so he was writing about retro computers when they were still new. He has been working in IT professionally since 1994 and has specialized in vulnerability management since 2013. He holds Security+ and CISSP certifications. Today he blogs five times a week, mostly about retro computers and retro gaming covering the time period from 1975 to 2000.