Aol To Revamp Look, Mimic Television
In an effort to net part of the population that isn’t as computer-savvy as the rest, the nation’s largest online service will revamp its look and simplify its offerings by trying to look more like television.
American Online, based in Dulles, Va., announced Monday that “The Next AOL” would premier next week with channels and programming that will be updated with news, weather and stock quotes throughout the day.
But mimicking television won’t stop at the topic-oriented channels. AOL wants to sell more advertising and the new version is intended to be more attractive to advertisers, a key part of the company’s plan to boost profits while user fees are stuck at $19.95 per month.
AOL’s Robert Pittman, who heads the company’s online service business, says he expects the new version will bring on about 2 to 3 million who are using services that just allow them to reach the Internet. AOL currently has about 9 million members.
“AOL is not a technology company as much as a media company,” said spokeswoman Wendy Goldberg. “We’ve used channels for some time because it makes it easier to find things.”
AOL users are already greeted by a wide selection of topics when they log in. But in the new version the channels will be more prominently displayed and streamlined. Also, the company says navigating the service will be easier through the new format.
The move toward a television model is the influence of Pittman, who runs AOL Networks and helped launch MTV and VH1. He joined America Online nearly a year ago after running Six Flags amusement parks and Century 21 Real Estate Corp.
Although many users have been frustrated by busy signals getting into AOL, Pittman says most cancel their subscriptions because the service is too complicated. Not only does AOL want to keep customers, but they want them to spend more time online looking at ads. With each “channel”, advertisers would be able to target their audience more precisely.
“Back at MTV, we found that people didn’t see movie and record company ads as ads,” he said. “They were in context. The more we put the ads in context, the more information we give to the members.”
Customers will be able to use the new channels starting next Monday. New software, which promises a tighter integration between the channels and the Internet, is scheduled to be released at the end of the year over a period of several months for several areas of the country.
Pittman said the extended release was an attempt to avoid the data jams that clogged America Online’s networks earlier this year when it switched over to a flat-rate pricing plan. Millions of new users swamped the network, resulting in busy signals, frustrations and lawsuits.
“I think we learned from flat-rate pricing that we don’t do this all at once,” said Pittman.