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AOL to Offer Free Services as Part of Company Restructuring

In an effort to take advantage of the "explosive rise in broadband use and online advertising," Time Warner's Internet arm, AOL, plans to offer free e-mail and other services as it moves away from its dial-up Internet service and cuts some 5,000 jobs.

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  • RAY SUAREZ:

    America Online became synonymous with the Internet in the 1990s with this ubiquitous greeting…

  • AOL VOICE:

    You've got mail!

  • RAY SUAREZ:

    … but AOL has fallen on hard and uncertain times since its merger with Time Warner in 2000, as the Internet business has evolved and companies like Google and Yahoo have prospered.

    Long a subscriber-based service, AOL announced yesterday that it will almost completely shift its business model to a free service, supported largely by advertising revenue. AOL expects to lose many of its subscribers in the process; it lost nearly one million in the last quarter alone.

    And here to bring us up to date on this latest version of AOL is Kara Swisher, technology writer for the Wall Street Journal and author of two books about AOL.

    Kara, welcome. For millions in the late 1990s who were getting their first taste of the World Wide Web, AOL was literally their gateway, their portal. What happened in the meanwhile?

  • KARA SWISHER, Technology Writer, Wall Street Journal:

    Well, you know, I think their slogan was, "So easy to use, no wonder it's number one," and that was the whole thing. The Internet was really complicated and hard to use, and AOL brought it to them in a very easy and friendly fashion in a way that wasn't technological, but was consumer-oriented about communications, about community, and they did a great job at that. Unfortunately, that was their greatest time.

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