AOL's broadband crusade

America Online on Monday is set to unveil its latest plan to keep some 34 million dial-up account members within the fold as they begin to shop for high-speed Internet access.

The AOL Time Warner online unit will launch an upgraded version of its proprietary service called AOL 8.0 Plus, accompanied by a $35 million advertising campaign. As part of the launch, the online giant has added a set of features geared toward broadband users. The company also is selling its broadband-enhanced service to nonmembers as a standalone product called AOL for Broadband for $14.95 a month, or $23.95 a month including unlimited dial-up access. As a starter promotion, AOL will charge $9.95 a month for the standalone product until the end of the year when it reverts to $14.95.

Behind a handful of new features lies the greater message from AOL to its dial-up subscribers: If you're considering leaving the service for broadband, take us with you. "Our business is all about giving our members what they want, and they increasingly want to move into the high-speed world," Jonathan Miller, CEO of the AOL unit, said in a statement.

AOL is the world's largest Internet service provider, but its greatest asset--its dial-up subscribers--is quickly becoming a potential liability as Internet customers make the shift from slow to fast connections. Broadband penetration into U.S. households surged 59 percent in 2002 in contrast to a 10 percent decline in narrowband connections, according to research firm Nielsen/NetRatings

That poses a major problem for AOL, which wants to catch the broadband wave without prompting defections from its highly profitably dial-up business to cable companies, DSL (digital subscriber line) providers and archrivals Microsoft and Yahoo.

News source: C|net

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