AOL will continue planting seeds beyond its formerly walled garden by offering a free voice-over-Internet
phone service called AIM Phoneline. The service will be an extension of its popular instant messaging service
and will provide users with a local phone number and the ability to receive incoming phone calls from anywhere.
AOL will also offer an enhanced subscription version for $14.95/month which will allow subscribers to make local
and long distance calls from their computers.
AIM (along with the other major portals) already sports talk features but Phoneline will be a more robust version which will compete with eBay's Skype as well as traditional telephone services. In addition, AIM Phoneline will be a part of a broader strategy to leverage AOL instant messaging that will include a social networking channel as well (stay tuned for more details on that one as they arise).
Recent Time Warner quarterly reports have revealed a fascinating cross trend shaping up in the AOL business which makes the rationale and timeliness of this new service apparent. AOL is simultaneously losing monthly ISP subscribers at a greater than 10% annual clip and growing Internet advertising at a greater than 20% annual rate. Such a dynamic makes it clear that the AOL strategy must entail aggressively building its free service user base in order to foster the growing ad end of the business and compensate for subscriber attrition.
One way of doing this is by attracting more users to instant messaging based services and as such Phoneline will be a critical part of the open strategy. The success of the new service bares close watching. If it prospers it will contribute significantly to the viability of the AOL as open portal model.
For more detes, the full New York Times story is available here.
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Reader Comments (Page 1 of 1)
5-08-2006 @ 12:22PM
Damon Draught said...
I believed that is the only path AOL to take to help turn TWX around. AIM with the Video service can help bring in the Ad revenue. I would like for TWX to break down how many views are using these new products and how it would help make up for AOL lossing subs. But the new AOL broadband should help slow down the sub losses.