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AOL Move Retains Online Audience

Things are looking up slightly at AOL, since the Time Warner company decided to give email addresses away for free. The result: a stronger-than-expected response, giving former AOL pessimists some hope that it could lead to a growing online audience. A month ago, AOL started making its email and software available for free, basically encouraging its dial-up customers to leave its service for faster broadband connections with other providers. But apparently, paying someone else for service hasn't resulted in former subscribers leaving AOL. "Customers are using AOL just as they did before," says Jonathan Miller, CEO at AOL. "The fundamental tenet of our assumptions is holding up and is rock solid." Miller said page views on AOL.com could start to increase as early as the fourth quarter of this year. It used to be that AOL defectors had to give up their email addresses. No more; AOL, like other major Web portals, is now adopting the strategy (several years late) that a Web company should try to retain its users as long as possible in order to sell more ads. The loss of dial-up revenue, which totaled $2 billion in the last quarter alone, is expected to be compensated somewhat by savings from massive layoffs in AOL's subscription and marketing divisions.

Read the whole story at Financial Times »

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