We talked about this last month as being a possibility, but now it's official. Time Warner is going to offer multiple AOL services for free to people who have a high-speed connection, in the hopes of bringing in more advertising dollars.

"The free services will include e-mail, instant messaging, a local phone number with unlimited incoming calls as well as safety and security features," according to the wire story from Reuters. You will still be able to subscribe to AOL as a dial-up customer at the regular price of $26 per month. However, that service will apparently not be widely marketed by Time Warner.
Before this move, high-speed customers could pay $15 a month to access AOL's features, which was really only useful to veteran Internet subscribers who had an AOL e-mail account back in the day and didn't want to lose it.

AOL has lost 3 million subscribers in the past year, and revenue dropped by 2% in the last quarter. Even though this move will cost AOL to lose even more money in the short run, the hope that tons of people will sign up for the free services, thereby attracting more online advertisers, could make up for the lost subscription revenue.

Full story

Report Published by: Mark Raby