Goodbye CDs: AOL's services will be free

Last update: August 2, 2006 - 8:22 PM

Time Warner Inc. is tearing down the wall between its AOL Internet service and the rest of the Web.

AOL said Wednesday that it would soon begin offering nearly all of its services for free -- including e-mail addresses and security software -- to anyone who has a high-speed Internet connection.

"This will remove the biggest barrier for our members staying with AOL as they migrate to broadband," Time Warner President Jeff Bewkes said. "We're going to stop sending our members to our competitors."

AOL has struggled with a flood of cancellations in recent years. It reported 17.7 million U.S. subscribers in the second quarter, down sharply from its peak of 26.7 million in 2002.

The Internet service is betting its future on winning more of the fast-growing market for online advertisements, which is expected to reach $16 billion this year. The advertising-support approach puts AOL more squarely in competition with other Internet giants, including Yahoo Inc., Google Inc. and Microsoft's MSN.

AOL plans to continue selling its dial-up Internet access service, but acquiring new dial-up customers has become such a money-losing proposition that the company plans to stop marketing the Net access service. That means no more free CDs from AOL in the mail, a longtime hallmark of the company's marketing efforts.

LOS ANGELES TIMES

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