AOL gives in as Microsoft ramps up

AOL announced today that it will no longer charge its high speed internet customers for email and other web services in a desperate move to stop the rapid attrition of its user base.

AOL, the online division of the world’s biggest media company, is undertaking its fourth overhaul in five years as it competes with Web search and advertising leaders Google, MSN and Yahoo.

AOL announced that the transition will take place in early September, with high speed broadband subscribers no longer needing to pay up to an extra $15 per month for the services.

AOL lost more than 3 million customers last year. But at the same time its ad revenue increased by 40 percent.

Its ironic that AOL is moving away from paid services agt just the same time other companies are introducing paid services. MSN for example is in the process of introducing a number of different paid for services, with its MSN brand migrating to the Windows Live brand over the next few months in preparation for the launch of Microsoft’s long awaited Vista operating system.

Apple is one of the few systems providers with a notable lack of portal presence, though it is awash with paid for services such as dotMac and iTunes, which it specifically uses to support its own branded products.

AOL really does need to quickly figure out which sector of the market it belongs to. At the moment it appears to be loosing in all.