I remember back in the 90’s you just couldn’t get away from all of those AOL discs. They seemed to show up in my mailbox daily and each time I went to Wal-Mart they were there in droves too. I threw them all away without even opening the wrapper. I always wondered how much money AOL spent on those CDs.
One person wondered the same thing and posted the question on question and answer site Quora recently. Apparently, the CEO of AOL at the time you couldn’t escape from the discs, Steve Case, saw the question and decided to answer it. The answer in short was “a lot.”
According to Case AOL had decided that it could spend 10% of its lifetime revenue per customer on landing that customer. He also said that the lifetime revenue was $350 so each of those CDs cost AOL about $35. I guess the plan worked out OK for them at the time. AOL went from 200,000 users when the company made its IPO to 25 million in a decade with a market cap of $150 billion.