AOL to Offer Free Software, E-mail to Broadband Users

Authored by Mark Hefflinger on August 2, 2006 - 1:41pm.

Dulles, Va. - In a major shift in policy designed to lure advertisers, media giant Time Warner said on Wednesday that it will make the software and e-mail of AOL available for free to broadband users. Other tools, such as tools for Internet safety and security, also will be made available for no charge. The move comes after AOL has lost several million of its core dial-up subscribers in recent years either to broadband providers or less expensive dial-up companies. "This is the next logical step for AOL to capitalize further on the explosive rise in broadband usage and online advertising," said Jeff Bewkes, the president and COO of Time Warner. "We expect to put AOL back on a growth path." The strategy is considered risky by some analysts, since 80% of AOL's current revenue is derived from subscriptions, which cost $25.90 a month. Though the company still will offer subscriptions, it is expected to significantly cut back on marketing and customer service, likely eliminating thousands of jobs. AOL currently has 18.5 million subscribers, down from about 26.5 million in 2002. The plan is expected to be fully implemented by early September.

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