Jim Kimsey

Cofounder of America Online

• Born: September 15, 1939
• Birthplace: Washington, D.C.
• Died: March 1, 2016
• Place of death: McLean, Virginia

Primary Company/Organization: America Online

Introduction

Entrepreneur and philanthropist Jim Kimsey is best known as a cofounder of America Online, Inc. (AOL). Kimsey served as president and chief executive officer (CEO) of the company during the first decade of the groundbreaking Internet service provider's existence. He was the first chairman of its board of directors. Kimsey resigned from the board in 1997 to lead the AOL Foundation, a philanthropic organization with AOL backing, until AOL merged with Time Warner. Kimsey later became chairman emeritus of AOL and also served as chairman of the International Commission on Missing Persons from 2001 to 2011.

Early Life

James Verlin “Jim” Kimsey was born February 21, 1939, in Washington, DC. He grew up in nearby Arlington, Virginia, the oldest of five children born to a low-ranking civil servant and his homemaker wife. Young Jim worked to help his family from an early age, first as a paperboy and later as a caddy. He was a bright student, and his mother urged him to apply for one of the scholarships awarded annually by Gonzaga, a Jesuit high school for boys in Washington, DC. Kimsey won a scholarship and proved himself a high achiever academically. He was less successful at conforming to the rules, however, and was expelled a few months shy of graduation. Yet his mother was determined that he receive an education. She approached a priest at St. John's, another Catholic high school in the area, to plead for a second chance. Kimsey graduated from St. John's in 1957.

He enrolled at Georgetown University but left after one term when he was accepted at the West Point military academy. He graduated from West Point in 1962 and began his career with the US Army as an airborne ranger. He served two tours of duty in Vietnam. During the first tour he directed the building of an orphanage, which he supported for more than thirty-five years. He was in special operations for his second tour. He attained the rank of major but left the Army after eight years.

He returned to Washington, DC, with his wife and two young sons, ready to begin life as an entrepreneur. With the help of a friend and less than $2,000, he bought a building. The plans called for a brokerage firm on the top floor and a bar downstairs. Kimsey installed a working ticker-tape machine and named the bar The Exchange. It was so successful that he was able to buy five other bars. Eventually his profits were great enough to allow him to invest in financial service companies and real estate.

Life's Work

In 1982, an old friend from West Point who had invested in Control Video, a company that offered consumers video games that could be downloaded via the telephone, wondered if Kimsey might be interested in investing as well. Since the company was in the Washington, DC, area, he asked Kimsey to check out the company. Kimsey was soon involved as a consultant, an role that increased as the company's struggle to survive grew more desperate. When an attempt to interest the young computer company Apple in buying the company failed, Kimsey approached Commodore, at the time the leading company in the personal computer market. Commodore was not interested in buying Control Video either, but they were interested in an online service that could be put on the Commodore 64.

Kimsey had to raise more capital and purchase software from a small company in Troy, New York, in order to provide the service. Control Video morphed into Quantum Computer Services, which, in 1985, launched Q-link, an online service for Commodore. By its second year, Quantum was in the black. The combination of Kimsey as money man, Marc Seriff as head of technology, and Steve Case in charge of marketing signaled that the company was one to watch. Quantum added new interactive services such as real-time chat and live celebrity appearances. Alliances with Apple, Tandy, and IBM followed. In 1989, instant messaging and the soon famous announcement “Welcome! You've got mail” debuted. In 1991, Quantum became America Online (AOL) and a point-and-click interface for DOS users was introduced. The next year, Kimsey turned over the position of CEO to Case and became chairman of the board.

By the time AOL went public a year later, membership exceeded 150,000, and it was in 1993 that the company's base saw its most dramatic increase, thanks in large part to a mistake by a competitor. Fellow Internet service provider (ISP) Prodigy had more than 2.5 million subscribers to their online service when rising costs and mounting losses persuaded management to abandon the flat-fee structure and raise rates. Consumers were angry, and AOL cut their prices and, in advertisements and disk mailings, invited unhappy Prodigy users to join AOL. Soon AOL had overtaken not only Prodigy but also CompuServe. In 1994, Kimsey was named Business Leader of the Year by Washingtonian magazine. AOL's membership reached one million in 1995; the same year the company went international by launching AOL Germany. A year later, membership jumped to 5 million, and AOL introduced a flat-rate pricing program and the Buddy List for chatting.

Kimsey, known for his ability to spot and support talent, had been grooming Case to replace him as chairman for several years, and in 1995, he passed the position to the man who whose name would become the one most identified with the company Kimsey had helped to found. The two men were not always in agreement. Most notably, they were on opposite sides in the 1993 crisis when Case and his supporters narrowly defeated a move to sell AOL to Microsoft, a move Kimsey supported. It was common knowledge within the company that Case was eager to have more control, and much was made of the outspoken Kimsey's comment to a reporter that when Case took over as chairman of the board, AOL would need "adult supervision." However, Case would later express his gratitude for Kimsey's belief in him. Indeed, it was Kimsey's influence with the board that saved Case's job on at least one occasion. In his turn, Kimsey acknowledged that Case was wise to fight selling the company to Microsoft.

In 1997 Kimsey resigned from the board of directors to serve as chairman of the AOL Foundation, a philanthropic organization he founded. Kimsey's first goal for the foundation was to improve educational opportunities for disadvantaged students in Washington, DC, and northern Virginia. The foundation provided money to parents and educators for online learning and gave cash and computers to schools and learning centers. It also offered comp time to AOL employees who volunteered their time to the effort and encouraged employees to apply for grants for their own favorite nonprofit organizations. Kimsey continued to head the foundation until AOL's merger with Time Warner in 2000.

At the time Kimsey became chairman of the AOL Foundation, he owned more than a million shares of AOL stock worth more than $78.8 million. However, while his slice of the AOL pie may have been generous, his innovation of awarding stock options to employees, a strategy born in the years when the company lacked the funds to offer large salaries, also made many of AOL's employees wealthy. One insider estimated that AOL may have created more than three thousand millionaires. Even clerical staff became rich. Kimsey's own secretary, for example, retired to spend time with her grandchildren with stock options worth $5 million.

Kimsey was appointed chairman of the International Commission on Missing Persons (ICMP), the leading organization involved in the identification of remains of victims of mass atrocities around the globe, by then Secretary of State Colin Powell in May 2001. In the aftermath of the terrorist attacks on the United States in 2001, Kimsey deployed the commission's DNA experts to assist in the identification of remains found at the site of the attacks, "Ground Zero," where the World Trade Center stood. Kimsey has also traveled to Iraq to oversee ICMP efforts there. He served in that position for a decade and continued his involvement with the organization as chairman emeritus. He also served as chairman of Refugees International, which advocates humane treatment of refugees around the world, from 1999 to 2005 and subsequently remained on the board as chairman emeritus.

Personal Life

Long divorced and the father of three sons—Mike, Mark, and Ray—Kimsey devoted much of his time and a considerable portion of his wealth to charitable causes. In 1996 he founded the Kimsey Foundation, combining support for educational and cultural initiatives in Washington with policy research and humanitarian outreach to the international community. Kimsey assisted numerous other charitable and cultural associations, including the National Stroke Association, Big Brothers of the National Capital Area, the National Symphony Orchestra, the Washington National Opera, and the Vietnam Veterans Memorial Fund. He served on no fewer than fifty-four nonprofit boards. He also pursued an interest in music by recording and privately releasing the country music album My First Rodeo as Verlin Jack, inspired by the film Crazy Heart (2010).

On March 1, 2016, Kimsey died of cancer at the age of seventy-six in McLean, Virginia, where he lived. Though AOL had since declined, posthumous recognitions widely acknowledged Kimsey's role in building the hugely successful company and thereby connecting much of the general public to the Internet in a way that profoundly shaped society.

Bibliography

"James V. Kimsey." Academy of Achievement. American Academy of Achievement, 1 Mar. 2016. Web. 6 Apr. 2016.

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Protess, Ben. "Jim Kimsey Dies at 76; AOL Co-Founder Influenced Generation of New Providers." New York Times. New York Times, 2 Mar. 2016. Web. 6 Apr. 2016.

“The Singing Millionaire.” Washington Post 5 Jan. 2012: CO2. Print.

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