AOL Bets Big on Version 8.0

In his first public speaking appearance since taking the helm of American Online last August, new Chairman and Chief Executive Officer Jonathan Miller promised to wield "unmatched resources" to revitalize the flagship Internet service, while focusing on members and ease of use.

"We're committed to leveraging every last bit of the extraordinary resources at our disposal," Miller told the audience at Internet World Fall 2002 in New York Thursday.

All eyes have been on Miller since he assumed his post from exiting AOL chief Bob Pittman, who resigned from the company after being under increasing pressure to reform AOL Time Warner's flailing Internet unit.

New Features

In his speech, Miller previewed features of the soon-to-be-released AOL 8.0, saying that the new software is the most important product release AOL has had to date.

AOL 8.0, due out October 15, will boast scores of new features such as Match Chat, a service that allows users to find and chat with other members with similar interests, and new broadband offerings such as CD-quality radio, Miller said.

The company hopes that the new software will rev up AOL's subscriber growth and slay claims that the unit is the albatross around AOLTW's neck. Weakened online advertising and slowing subscriber rates have placed a heavy burden on AOL over the last year, fueling criticism that the unit is responsible for the nearly 70 percent drop in AOLTW's stock price since the new-old media conglomerate was formed in January 2001.

Banking on Broadband

The company is also banking on broadband to shore up the unit's performance, and according to Miller, 8.0 will feature revamped broadband offerings, designed to significantly differentiate the service.

Promising "sizzling" programming, heightened interactivity, CD-quality radio, and a separate welcome screen, Miller said, version 8.0 broadband will be aimed at convergence features.

"Our commitment to broadband is clear and unwavering. We are in it to win," Miller said.

AOL broadband already has over 4 million subscribers, Miller said, making the company a leading broadband provider.

Miller also promised added premium services and e-commerce offerings to boost the unit's growth, saying that "people are clearly willing to do and pay for anything in an online environment if you show it makes it easier to manage their daily lives."

Miller's comments came after AOLTW Chairman Steve Case earlier this week laid out plans for the online unit that downplay a reliance on advertising revenues and instead focus on previously untapped e-commerce initiatives.

Case, like Miller, is under significant pressure to boost AOL's performance. Some members of AOLTW's board have reportedly been seeking Case's ouster, making the former AOL head the scapegoat for the unit's slowed growth.

But despite the scrutiny, Miller seemed upbeat about AOL's future prospects Thursday.

"AOL continues to move strongly forward in every way, in a new sense of revitalization," he said.