AOL's Latest (and Last?) Effort To Make the Portal Relevant

When AOL launched back in the 90s, its premise was the idea of a portal, through which subscribers would check their e-mail and filter their experience of the web. In 2006 AOL dumped its subscription service, shifting gears to an ad-supported model.

The problem has been that ad revenues have yet to compensate for the millions of subscribers who have left the service. So yesterday, AOL launched a new home page that takes into consideration the way people now use the Internet and aims to make the idea of a portal relevant again.

The new AOL allows users to access outside email accounts like Gmail or Yahoo mail, and it will allow you to log into your social networking sites so you can get friend updates on your AOL homepage. Next month you'll be able to add local news, or other links to the page. The new site aims to personalize the homepage for you, without you having to even make any decisions; if you click to finance sites from AOL, it'll feature more business news on the AOL page. So in theory, you'd use AOL like a home page, an aggregator for the content you're frequently accessing online.

So let's say this does end up driving traffic. Can it sufficiently drive ad sales? AOL advertising grew just 1.5 percent in the second quarter compared to 20 percent growth for online advertising in the US that same quarter. Is this throwing good money after bad?

Perhaps most likely, this is probably a way to spruce up the division--and its numbers--before Time Warner (TWX) attempts to spin it off.

Comments

[Hedged In:]

Julia, I'm not sure it's fair to say "Perhaps most likely, this is probably a way to spruce up the division--and its numbers--before Time Warner (TWX) attempts to spin it off."

This is AOL's attempt to rethink how it can add value. Becoming a "start page" for all your email accounts etc. in a way that the other major players won't is a gutsy move.

The key question in my mind is whether this will actually generate ad inventory and dollars for AOL - there just aren't enough pages with AOL's own content in this strategy.

2008 Sep 11 02:09 AM

[vassar:]

Problem is, this should have been done 5 years ago. Now the AOL users that are left are going to figure out that AOL is not the Internet.

2008 Sep 11 09:52 AM