Is AOL Giving Up on Subscriptions?

AOL has been moving away from its subscription-based past and toward an ad-supported future for the past couple of years. According to the Wall Street Journal (sub. reqd.), parent Time Warner is close to making a full-on commitment to advertising by offering free e-mail and other services to users with existing high-speed connections.

According to WSJ, a third of AOL’s 18.6 million subscribers have a broadband connection. Some of those are subscribers to Time Warner Cable, or one of several cable operators that AOL had struck deals with to bundle their services.

Others are former AOL dial-up customers who are now paying to keep their old e-mail address and services after moving to another broadband provider. The Journal reports that AOL expects 8 million more dial-up users to move to broadband if they can keep their current services for free.

AOL has been ramping up its advertising efforts, especially since the re-launch of AOL.com a year ago. This move would build on those efforts, but there are always risks involved when you eliminate an existing revenue stream in hopes of building up another.

Industry watchers Henry Blodget and Fred Wilson like the idea. What do you think?

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