AOL Considering Shift From Subscription-Based To Advertising

[DudeAsInCool]

NEW YORK (AP) -- AOL LLC may give away even more of its services, including its vaunted AOL.com e-mail accounts now limited to paying subscribers, to boost ad revenues and offset declines in subscriptions, a person familiar with the discussions said Thursday.

One proposal under consideration among top AOL executives calls for Time Warner Inc.'s online unit to stop charging subscription fees to users who have high-speed Internet access or even dial-up service from a rival provider.

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Source: NYTimes

[DudeAsInCool]

Should AOL sacrifice its cash cow in hopes of finding a prosperous future?

In two weeks, the board of Time Warner Inc., which owns AOL, will hear a proposal from Jonathan Miller, AOL's chief executive, calling for a near halt in marketing for AOL's 17-year-old Internet access service, price cuts for existing customers and thousands of layoffs. His goal is to devote all of AOL's energy into building its free Web-based services.

Traditionally, when companies have profitable but shrinking businesses, like AOL's access service, they try to milk as much money as they can from them without investing new cash. Indeed, that is what Mr. Miller has tried to do for the last several years.

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The NY Times