AOL wants to share its technology?

April 4, 2005

AOL helped the US discover the Internet, but millions have learned to surf the Web without it, and the world's biggest Internet service provider is reinventing itself, in the hope of becoming more competitive again.

AOL still makes money getting people online via dial-up modems for $23.90 a month. That market is shrinking fast, though, as subscribers defect to faster broadband connections or cheaper dial-up services.

The so-called walled garden that AOL created for its members in the 1990s � a private network of Web sites reachable only if you have proprietary AOL software � also is becoming harder to sell. Jamie Stein, a 27-year-old Hollywood script consultant, dropped his membership after discovering how much was available free on the open Web. Like many, he feels he outgrew AOL.

"It seems like the layman's way to explore the Internet," Stein said recently. "At this point, it's becoming less and less of a necessity."

But AOL has a plan, which executives at corporate headquarters here describe as one of the biggest strategic shifts in the company's history. It's to move many services once reserved for paying members � including music, a search engine, video clips and shopping sites � onto the open Web to attract more visitors and advertisers.

The moment of truth will come this summer, when the company expects to release a revamped AOL.com homepage, a flashy version of its instant messaging program and a new Web-based e-mail service. AOL executives hope the homepage will become a starting point for Web surfers much as Yahoo.com and MSN.com are now � sites that draw more visitors and reap higher profits than AOL.

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