AOL to Offer E-mail Services Free

NEW YORK It’s official: You’ve got mail, and you don’t have to pay for it anymore.

Starting next month, the company will offer its popular AOL software and e-mail products to broadband subscribers for free as part of a long-term strategic shift aimed at remaking the Web pioneer’s image.

Industry observers had long expected the company to move in this direction.

While AOL will take a short-term financial hit from the decision to eliminate subscription fees from thousands of subscribers, it hopes those dollars will eventually be replaced by advertising. (The company said online ad revenue soared by 40 percent to nearly $130 million in the second quarter of 2006.)

“This is the next logical step for AOL to capitalize further on the explosive rise in broadband usage and online advertising,” said Time Warner president and chief operating officer Jeff Bewkes, in a statement. “With its robust and rapidly expanding advertising operation, we expect to put AOL back on a growth path.”

AOL has been steadily bleeding members from its subscription ranks for years (dropping from a high of roughly 27 million subscribers several years ago to just under 18 million currently), as dial-up Internet access began to look archaic to consumers being offered easily accessible and relatively affordable broadband access. But many long-term AOL fans have been holdouts, in part because they hoped to hang onto their coveted e-mail addresses.

Wednesday’s move allows AOL to keep those users in the family as they upgrade to broadband.

“We’ll now be able to maintain and deepen our relationship with many more members who are likely to migrate to broadband,” said AOL chairman and CEO Jonathan Miller. “Providing them with their familiar AOL software and e-mail for free, over any broadband connection, will be critical to our future success.”

Miller added that any former AOL subscribers who had dropped the service over the past two years would be able to retrieve their former e-mail addresses through the new program. And for those who still want it, dial-up service will still be available for $25.90 per month.

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