AOL puts its weight behind broadband and premium services

AOL Time Warner executives yesterday laid out a plan to stabilise and boost America Online (AOL), with an emphasis on broadband...

AOL Time Warner executives yesterday laid out a plan to stabilise and boost America Online (AOL), with an emphasis on broadband and premium services, while reining in costs, retooling advertising offerings and restoring the company's integrity.

"We don't pretend to have all the answers but I am confident we have arrived at a plan to put AOL on a path to growth," AOL chief executive officer Jon Miller told the audience during an AOL presentation in New York.

Miller, who took the helm of the world's largest Internet service provider last August, laid out his vision for revitalising the struggling service as it faces slowed subscriber growth, declining ad revenue, mounting competition and US government probes into the company's accounting.

Miller said that while broadband growth is central to the company's strategy, AOL would also work on its dial-up service. "Narrowband is not going away. It will continue to be a part of this market for many years."

AOL will target narrowband user concerns such as connectivity issues, security and spam, while offering more differentiated and exclusive content.

On the security front, AOL announced a deal with Network Associates to provide users with free McAfee e-mail virus scanning software. Under the agreement, AOL is also offering a subscription security service. Both services will be available in the first half of next year.

AOL is concentrating on offering premium broadband offerings, particularly from other units of AOLTW's sprawling media empire. It confirmed yesterday that its Time division sealed a deal to provide AOL with exclusive online content from its magazines such as InStyle, Entertainment Weekly, People and Teen People.

The ISP has also forged an agreement with CNN to integrate CNN video and text into its news service, and is producing original content in conjunction with TV company HBO.

CNN's pay video service, which is now available for $4.95 (£3.16) a month on the Internet, will be accessible via AOL Broadband as a new member service.

Furthermore, AOL is collaborating with Warner Music Group to offer users digital music downloads, as well as the MusicNet service for streaming, downloads and CD burning. It will also be working more closely with Warner Brothers Pictures and New Line Cinema to offer premiere video and tie-ins online.

"Our hope is to work along our entire array of our businesses, offering [a service] that is so compelling subscribers cannot live without it," said AOLTW CEO Richard Parsons.

AOL is also turning the heat up under its bring-your-own-access Internet service, as well as pushing wireless offerings.

"This emerging multiband world creates challenges and staying in this game means rethinking (our strategy)," Miller said.

As part of the company's image-bolstering campaign, AOLTW chairman Steve Case has asked AOL members to send in their complaints about the service.

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