AOL May Give Away Its Services

FREE IFN Newsletter

AOL May Give Away Its Services

By: David Utter
2006-07-07

Free AOL email and access to the services it still has behind the subscription wall would be monetized by advertising instead of paid monthly memberships.

"Give it away give it away give it away now I cant tell if I'm a kingpin or a pauper" -- Red Hot Chili Peppers play a prophetic tune about Jonathan Miller

In July 2005, Time Warner Inc's AOL (TWX) completed a lengthy process that brought much of its content out of the walled garden of paid subscription access to the broader Internet. Its online video coverage of Live 8 drew the praise of music critics and fans.

Before opening the service, that coverage would have been limited to AOL's subscriber base. But that group has been dwindling as users bail out for faster connections, which prompted the changeover to an open version of AOL.

Instead of subscriber fees, the new AOL would be audience-supported, a nice way of saying online advertising and CPM rates had reached a point where AOL executives believed it could replace and even grow beyond what those monthly subscriptions provide.

It's a big bet to make, and now the company may make a bigger one. Many subscribers who have held on to their subscriptions have done so to keep their long-time email addresses intact. Soon they may be able to keep them for free.

An unnamed source let slip to the Wall Street Journal that AOL is on the verge of making its content, including email, available to anyone with a broadband connection. The report claimed AOL CEO Jonathan Miller recently presented the plan to Time Warner executives in New York.

AOL would give up an estimated $2 billion in revenue from subscription fees with the plan. Advertising revenue and massive job cuts in customer service and marketing would offset that drop. It is a bold proposition, one that the Time Warner board may consider backing.

---
Tags: AOL, Time Warner

Add to

Del.icio.us |

Digg |

Yahoo! My Web |

Furl

Bookmark IFN -

About the Author:
David Utter is a staff writer for InternetFinancialNews and WebProNews covering technology and business.


Titan Quest Forum	Nintendo Wii	Graphics Forum
Halo 3 Forum	Mac Software