In a dramatic switch AOL is freeing up some of its services so that it can garner more advertising revenues. People who already have broadband access can now get AOL for free. AOL will still charge for its dial-up service. MSNBC reports that AOL has lost nearly 8 million subscribers over the past four years.
Jonathan Miller, AOL’s chairman and chief executive, told The Associated Press that it no longer made sense fighting an industry trend, acknowledging that AOL wasn’t competitive with its "above-market rate" offering.
Customers "were leaving us over price," Miller said. "They weren't leaving us because they were unhappy."
Encouraged by such trends as its 40 percent jump in ad revenue in the second quarter, AOL figures that by making services free, it can prevent users from defecting to Yahoo, Google, Microsoft and other providers that have offered free e-mail for years.
Rob Enderle, an analyst with the Enderle Group, said the restructuring brings Time Warner Inc.'s online unit in line with "this decade as opposed to the last decade" and lets the company "hold on to the customers they had left."
“Had they done nothing, by the end of the decade, they would have been gone,” Enderle said.
The move marks the end of an era for a company that grew rapidly in the 1990s by making it easy to connect online, giving millions of Americans their first taste of e-mail, the Web and instant messaging through unsolicited discs stuffed in mailboxes and magazines.
This may be the only way for AOL to retain some of its email and instant messenger customers. That alone makes it a smart move. You can read a long post about AOL's changes by AOL executive Ted Leonsis here. You can get the free AOL here.
In a dramatic switch AOL is freeing up some of its services so that it can garner more advertising revenues. People who already have broadband access can now get AOL for free. AOL will still charge for its dial-up service. MSNBC 
