(Associated Press via NewsEdge) Stepping up the chase for online advertising dollars, AOL will give away email accounts and software now available only to its paying customers in a strategy shift likely to accelerate the decline in its core Internet access business.
The decision, announced by AOL parent Time Warner, removes the few remaining reasons for AOL subscribers to keep paying when they already have high-speed Internet access through a cable or phone company.
AOL hopes that by making services free, it can draw Internet users to its ad-supported Web sites and keep them from defecting to Yahoo, Google, and Microsoft, which have offered free email for years.
'We're going to stop sending our members to competitors,' said Jeff Bewkes, Time Warner's president and CEO.
The move marks the end of an era for a company that grew rapidly in the 1990s by making it easy to connect online, giving millions of Americans their first taste of email, the Web and instant messaging through discs that continually arrived unsolicited in mailboxes.
AOL has about 6.2 million US subscribers who have broadband but pay extra, generally $15 a month, for AOL services, meaning AOL could lose more than $1 billion in annual revenue from those customers alone.
Executives believe they can find that amount in savings by the end of 2007 by cutting marketing, network and overhead costs.
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