Time Warner To Outline AOL Strategy

After days of intense media speculation that Time Warner was considering eliminating subscription fees for AOL e-mail accounts, the company Tuesday said that the press reports had been based on "unauthorized disclosures, including incomplete and largely erroneous financial information."

In a statement issued after the markets closed, Time Warner said it would present a more complete picture regarding future strategy on Aug. 2, and asked investors to hold back from making conclusions until then.

But, though calling the disclosures "unauthorized," Time Warner did not dispute that it was considering offering many of its subscription services for free.

News of the possible shift first surfaced last Thursday, when The Wall Street Journal reported that AOL Chief Executive Jonathan Miller had presented Time Warner executives with a plan to stop charging subscription fees to users who obtain broadband access from other companies. The move would immediately affect about 6 million of AOL's 18.6 million subscribers, who continue to pay $15 a month access fees, primarily to retain their AOL e-mail addresses.



The potential change in strategy was said to reflect AOL's intention to focus efforts on its advertising efforts, as opposed to its dwindling subscriber base. As of the end of March, AOL counted just 18.6 million subscribers, down from 21.7 million one year ago and more than 26 million in 2002.

But slashing subscription fees also is likely to cost the company in the short term. The Wall Street Journal reported Tuesday that AOL's overall revenue (not counting AOL's European Internet-access business) would likely drop from $6 billion this year to $4.9 billion in 2008, before partially rebounding to $5.3 billion in 2009.

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