AOL hopes to secure a seat on the broadbandwagon

AOL hopes the launch of a new product aimed at users who want broadband services will help it retain its 34 million dial-up account members.

AOL will launch an upgraded version of its proprietary service called AOL 8.0 Plus, accompanied by a $35m advertising campaign. As part of the launch, the online giant has added a set of features geared toward high-speed internet users.

Jonathan Miller, CEO of AOL, said: "Our business is all about giving our members what they want, and they increasingly want to move into the high-speed world."

AOL has to now be decisive in order to halt defections from its highly profitably dial-up business to cable companies, ADSL providers and archrivals Microsoft and Yahoo!

The task looks to be Herculean. AOL so far has picked up only crumbs as its share in the growing broadband pie. As of December, it had signed on 650,000 subscribers to its bundled $54.95-a-month broadband service in the US. The leading high-speed service in the US, Comcast, boasts nearly six times that number, with 3.7 million subscribers.

AOL's slow growth in the broadband market has been matched by a recent decline in its core group of dial-up subscribers. Last quarter, the company reported that its overall subscriber rolls dropped by about 100,000 members, its first net decline in years.

AOL's promotional efforts will focus on convincing people to buy its AOL for Broadband service as a standalone package, often referred to as "bring your own access" (BYOA). Currently, some two million subscribers get their access to the dial-up service through BYOA or from a third-party broadband provider. Now AOL is spicing up this service with features that it hopes will dazzle broadband users.

The most visible of these broadband changes will be the new welcome screen that includes snazzier graphics and video-streaming capabilities. The new screen also includes different versions depending on the time of day, more links to multimedia content, and more visibility for services such as Broadband Radio@AOL and Video@AOL. AOL will redesign content channels such as its news area to include more high-bandwidth services.

These additions will come on top of those found in AOL 8.0 Plus, including security features such as a firewall and antivirus software, heightened parental controls and the AOL Communicator advanced email client.

AOL 8.0 Plus will also feature more entertainment content from AOL Time Warner's other properties - including movie previews, sports highlights packages and news and weather.