Time Warner Inc. has dropped subscription fees and is offering AOL’s software and e-mail for free to broadband users in a move toward online advertising.
This comes at a time when Time Warner has reported an increase in revenue for 2006 and is looking to revamp AOL. The makeover is embracing the mainstream consumer use of broadband and the growing number of dollars that advertisers are spending online.
“E-mail is a huge generator of page views,” said Ruth Sarfaty, New York-based spokeswoman at AOL. “We are hoping that users will use our free e-mail service and then stay within the page for other services.”
The free services for broadband users include AOL’s integrated software; communications features like AOL e-mail, instant messaging, a local phone number with incoming calls; social networking applications; and applications for safety and security like parental controls.
AOL also launched a free video portal at www.aol.com. This has only become possible as more consumers and businesses adopt high-speed wireless services with the ability to stream large video files.
The AOL Network currently has over 100 million unique visitors per month and the firm hopes that the free service and the rapidly growing broadband adopters will grow this number.
To encourage former members to return to using the AOL software, e-mail, instant messaging and other AOL products, they will be able to reactivate their screen names, if given up within the last two years.
AOL will continue to offer its dial-up access subscription service, but will no longer aggressively market it. Members may continue to subscribe to AOL’s unlimited premium dial-up plan with a monthly price of $25.90 or choose from two lower-cost access plans.
Other free e-mail services providers include Google, Yahoo and MSN’s Hotmail. Each of these firms offer free e-mail and raise most of their revenue through extra services and online advertising.
These moves clearly prove AOL’s future is in advertising.
“This is the next logical step for AOL to capitalize further on the explosive rise in broadband usage and online advertising,” Ms. Sarfaty said. “Advertising’s point of view is moving towards online rich media and AOL is moving with it.”