AOL to Extend Offering to Free Videos and VoIP Calls

21 February 2006

America Online hopes to reverse its long decline by harnessing the latest must-have services - telephony, instant messaging and video services - to its current internet offering.

The Time Warner-owned ISP is to roll out three major new services over the next few months in its bid to regain territory lost to relative newcomers such as teen-scene messaging site MySpace and web telephony pioneer Skype.

AOL ceo Jonathan Miller revealed the strategy in an interview with USA Today, proclaiming his company is poised to follow Google, Yahoo and Microsoft in moving from a subscriber-based business model to an ad-centric format. Among the new ventures announced by Miller are ...

  • Video: As of this week AOL begins to meld a new video search facility from Truveo (which it bought in December) with its mainstream services. This will culminate mid-March, when 14,000 Warner Brothers classic TV shows will be made available for free, supported by ads, as part of AOL's new In2TV service.

  • Music: AOL's market leading instant-messaging service AIM will turbocharge the power of the portal's 43 million active users to push its substantial music and video offerings via instant messaging. Rollout is scheduled to start in about eight weeks.

  • Telephony: AIM will also be the launch-pad for AOL's new internet phone service. It will be "be a full voice platform, competitive with Skype," avers Miller. The service is scheduled for roll out late spring
Radical action is long overdue. According to parent Time Warner, AOL revenue fell 8% in Q4 2005 to $2 billion (€1.68bn; £1.15bn) despite higher ad sales. Of its 19.5 million US members in 2005, AOL shed 625,000 in the final quarter.

Data sourced from USA Today Online; additional content by WARC staff