Broadband ‘Members First’ for AOL’s 9.0 Release

America Online is about to release its latest client, AOL 9.0 Optimized for broadband and dial-up subscribers, which company officials call the most extensive upgrade in the history of the online service.

The ISP’s latest release of AOL and AOL for Broadband services is expected to start with a “Members First” download campaign on Friday, August 1st. AOL said Broadband members running the Microsoft Windows XP and Windows 2000 operating systems will be the first to get an exclusive, preview copy of the new version before the product is generally released in stores and marketing outlets this fall.

The company said all other AOL members will be notified online in the coming weeks as AOL 9.0 Optimized is available for them to download; members can also order a free AOL 9.0 Optimized CD in the online upgrade area.

The release comes as AOL works to stave off continued erosion of its dial-up base as those subscribers switch to high-speed connections, and as federal regulators continue their probe of AOL’s accounting for past advertising-related deals.

As of the end of the second quarter, AOL counted 25.3 million U.S. subscribers, a drop of 1.2 million from the same quarter last year. Its decline of 846,000 subscribers during the period was higher than expected. But AOL said about 45 percent of the decline was due to efforts to remove non-paying members who had signed up on lengthy free trials.

A recent story in the Wall Street Journal reported that AOL’s higher-than-expected subscriber loss in the second quarter resulted from the end of a bulk sales agreement with three retailers to sell limited-use accounts for $1 to $3. The deal reportedly allowed Target, Sears & Roebuck, and J.C. Penney to offer the discounted accounts to their employees for $10 and keep the extra money.

In addition, federal securities regulators have reportedly requested documents from AOL about the bulk sales.

Despite the latest developments, however, analysts have been fairly upbeat about the new 9.0 client, as well as AOL’s continued efforts to manage an expected sharp decline in its advertising revenues and lower revenues from the erosion in its dial-up base.

The company has not planned a formal launch event to surround the release of 9.0, but it is ramping up a multi-faceted marketing campaign around AOL 9.0 Optimized. As part of this campaign, AOL said it would integrate online promotions, product placement and full-scale brand advertising to increase exposure to the new release.

In addition to promoting the product online and through CDs distributed in retail stores, AOL 9.0 Optimized is expected to be included on upcoming desktop and laptop PCs, including those manufactured by Dell.

Highlights of the new client include:

  • Intuitive personalized and adaptive spam filters, automatic virus-scanning for email attachments and enhanced parental controls;
  • “TopSpeed” Web acceleration technology that uses compression and caching techniques in order to speed Web surfing, as well as software that will automatically reconnect and restart if an interruption occurs in either a dial-up or broadband session;
  • Customization tools that enable users to pick and choose how their content choices will be piped into their welcome screen and other recurring pages;
  • 3D animated SuperBuddy Icons and a suite of new instant messaging and personalized “expressions” features; Instant Messaging features such as a new AOL Talk Phone, video clips, digital photos, and file sharing;
  • Improved email options such as a “Manage Mail” tab that enables members to view all of their mail from one place; the ability to permanently store up to 20 megabytes of mail per Screen Name for a total of up to 140 megabytes per account on AOL’s servers at no additional charge;
  • Other new extras include a new publishing/blogging tool called AOL Journal; layers of expanded modules that pipe more content to an integrated welcome screen that acts as a “dashboard” where users can check on various communications — for example email and IM, without having to leave a browser page.

    The company said as the result of a special online promotion, 2.8 million AOL members signed up to receive an automatic alert when AOL 9.0 Optimized is available to download, while more than 150,000 members took part in beta testing ahead of the official launch. The company now counts about 2.2 million broadband subscribers out of its total base.

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