AOL Mulls Free Service Offering
AOL may be going fully ad-supported, according to an article this morning in the Wall Street Journal, whereby the online giant may offer all of its online services, email and security suite included–free of charge to the public.
By offering free service, AOL could lose up to $2 billion in subscription fees, which it may have to make up for with job cuts in its marketing and customer service departments. But with subscription fees a thing of the past, it could also boost its user base, which has fallen by 850,000 in the first quarter of this year alone. Still, AOL would charge $25.90 for their dial-up service.
AOL CEO Jonathan Miller presented the idea to Time Warner execs last week. AOL estimates that 1/3 of its 18.6 million subscribers currently has a broadband iInternet from a third party provider, and estimates that 8 million of its current dial up users would make the switch to broadband if its services were offered for free.
Even though revenue from subscriptions has steadily fallen, AOL has seen a dramatic increase in revenue from online ads. AOL is remaining mum on the subject, and declined to comment. The move to a completely free ad-supported service completes the transition AOL began in December of 2004 in order to compete with other ad-supported portals like Google and Yahoo.
Tags: AOL and broadband
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