AOL to Split Services

by , 9:30 AM EST, February 7th, 2008

AOL's dial up Internet access and Web advertising services are about to go their separate ways. Time Warner plans to shed the dying dial up service in the U.S. so that AOL can focus on its more lucrative advertising business, according to MediaPost.

Forrester Research analyst Sally Cohen commented that Time Warner CEO Jeff Bewkes "is gearing up to push the advertising and content side of AOL, and he's thinking hard about its place in the portal world."

The move should help AOL stem the losses from its quickly dwindling dial up user base. The company has been seeing a continuing decline in the number of dial up subscribers ever since consumer broadband Internet services caught on.

The company's 9.3 million subscriber base is down by 3.8 million compared to the same time last year, and 740,000 subscribers dropped their service in the last quarter.

AOL has already sold off its dial up services in other countries. Last year, the company off loaded its Web access services in France and the United Kingdom.

Shedding its dial up services may help the company improve its position against the likes of Google and Yahoo! -- both of which are currently far more popular than AOL.

"The fact is AOL remains a distant fourth in the portal business, and the consumers who once used their subscription services have moved on to rival services," Ms. Cohen said.