• PC World
• » Web

Although America Online isn't set to unveil its new service-bolstering strategy until it meets with company executives and analysts for "AOL Day" December 3, the cat already appears to be out of the bag.

With executive reshuffling and a new software launch out of the way, it looks as though AOL is focused on two things: broadband and content.

While the official announcements are still forthcoming, news has already leaked that AOL is set to be the exclusive provider of Web content from Time publications such as People and Entertainment Weekly, and that it is throwing more weight behind its broadband service.

"I don't expect them to announce anything that they haven't leaked so far," says Kaufman Brothers analyst Paul Kim who will be attending the meeting next Tuesday.

Back on Track

"AOL Day" has been touted as an opportunity for new AOL President Jon Miller to layout his road map for the swerving Internet service as it faces a tough advertising market, heightened competition, and its own internal company friction.

The world's largest Internet Service Provider has had a rough ride so far this year, faced with accounting scandals and mounting pressure from its parent company AOL Time Warner to shore up its service or face the consequences.

But despite the buildup, few expect groundbreaking news to come out of next week's meeting, given that the wheels of change have already been put in motion, and their rumble widely heard.

Turning 8.0

The release of AOL 8.0 last month gave a clear indication to where the service was heading. The latest software takes a new approach to content, offering more exclusive and cable-like programming, and features broadband-optimized features, such as CD-quality radio.

Furthermore, in his first public speech after taking the reins of AOL last August, Miller called the company's commitment to broadband "clear and unwavering."

"We are in it to win," Miller told the audience at the Internet World Fall 2002 conference in New York in early October. That goal may be harder to achieve than AOL expects, however, especially since it will be gunning against a competitor with similar content and services, run by AOLTW.

Broadband Battle

As AOL Broadband battles for a place in the market, it may find Time Warner Cable's Road Runner high-speed Internet service nipping at its heels.

After all, Road Runner features movie trailers, music downloads, a radio service, instant messaging software, personalization tools, e-mail, and content from a host of entertainment and news partners, just like AOL Broadband.

Consumers asking what the difference is may first take a peek at the price tags. Road Runner service is currently marked at $44.95 a month, whereas AOL Broadband has been set at $54.95.

And while both broadband providers are making moves to expand and distinguish their offerings, so far the differences aren't so clear.

However, AOLTW is marketing Road Runner as a basic broadband service and AOL Broadband as a premium service, Kim said.

"AOL's incredible advantage is that it has a significant portion of the market and people are habitual," said Kim. AOL currently has over 35 million subscribers with some 3.7 million signed up for the broadband service, according to AOL.

Coming Together?

But while AOL Broadband will try to distinguish itself with the ISP's popular and highly touted community features, such as being able to share content, the fact that the service has a competitive sibling to worry about reflects on AOLTW's factitious nature.

Still, AOL's reported content deal with Time shows that the media powerhouse is showing more unity, a source close to the company said.

Despite the fact that some online readers of the Time magazines will be frustrated that the content will no longer be available for free, the company has deemed the deal an overall positive in providing AOL with exclusive content, Kim noted.

With new leadership and software, and broadband and content plans in place, little appears left that will stir analysts' imaginations on AOL Day.

"If you are AOL you have very few venues to differentiate," Kim said.

• See more like this:
• America Online,
• broadband,
• 8.0,
• content,
• Time,
• People,
• Entertainment Weekly,
• cable,
• Road Runner,
• Time Warner,
• Jon Miller