AOL Offering Free Email, Web Services

AOL aims to shore up its eroding subscriber base - and boost ad revenue - by offering its high-speed Internet users free email and Web services.

AOL announced today that, by early September, it will no longer charge its high-speed Internet subscribers around $15 a month for access to AOL’s email, instant messaging, and Web services: instead, the features will be free to high-speed Internet subscribers. Newly-free services will include email, instant messaging (with a local phone number to support incoming voice calls), plus online safety and security offerings.

The move is AOL’s latest in its efforts to retain subscribers, who are increasingly being lured away from AOL’s so-called “walled garden” by high-speed cable and DSL Internet services, as well as a way for the company to increase the revenue it brings in from advertising. AOL is working to reposition itself as an advertiser-supported set of online services, offering music, video, news and information, and original content both to its subscribers and the Internet at large.

AOL currently has about 17.7 million subscribers in the United States: it has retained the email addresses of members who have left AOL over the last two years, and plans to offer the free new service to those former subscribers as well as new users.

AOL will continue to offer Internet access, email, and Web services to dial-up subscribers at about $26 per month, but does not plan to significantly advertise the service.