Sunday, July 09, 2006

AOL Accelerates Move to Ad-Supported Portal

AOL Accelerates Move to Ad-Supported Portal

It looks like AOL is considering getting rid of many of their pay services (especially email) in order to drive more people to their site. They think that if they can get AOL to become a portal like Google or Yahoo!, then they can generate a lot more ad revenue.

This seems like a good idea, although AOL would have to completely rebrand their entire identity. AOL has done pretty well already though with free services like AIM. And the name "America Online" is a great name to work off of.

AOL makes about $7 billion of its $8.3 billion a year on its subscription services, so it seems dicey to cut ties with all their pay services. However, subscription revenues fell about $722 million last year, while advertising revenue gained $333 million.

Free email would be a good way to get more people to come to the site (thus more eyeballs to sell to advertisers).

I kow personally that my family keeps a minimum AOL account only because we don't want to have to give up email addresses that we've had for a long time.

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