• by August 12, 2004

America Online said yesterday that it will sell low cost PCs at Office Depot, and most likely, through other mass-market retailers, in a bid to lure consumers who don't currently have Internet access to its dial-up Internet service. Targeting minorities and low-income consumers, AOL said consumers who purchase the "AOL Optimzed PC" must agree to sign up for a year of service.

AOL is hoping to lure consumers back to its cash-cow dial-up service ($23.90 a month). Growth in the market has slowed as consumers (more than 2 million of them), ditched AOL for cut-rate and free Internet access providers, or segued to broadband services. Of course, AOL continues to aggressively push its broadband offering.

The PC idea is a good one. AOL says that 27 percent of the U.S. population (many Hispanics, African Americans, senior citizens, and people living on extremely fixed incomes), still don't own a PC. The AOL Optimized PC is $299.99 and comes with a computer, monitor, and printer. Buyers must make a one-year commitment to a dial-up subscription to AOL for $23.90 a month.

Hopefully, AOL will be able to offer their PCs at Wal-Mart and Target stores as well. But there's something else at work here. The PC deal is just the latest in a series of moves AOL has made to target the Spanish-speaking market, blacks, and other minorities. In fact, AOL says it will launch BlackVoices, a recently acquired Web site with a large following, next month. The company has made notable progress in creating Spanish-speaking content, or finding partners that can.

AOL has made inroads with the Hispanic population through its leadership on the AOL Latino service, now nearly a year old. That service has more than 2 million members. Early leadership in this market could make a difference.