To the 20.8 million subscribers still using America Online, Time Warner (NYSE:TWX) has not forgotten about you. This morning, a new welcome screen is greeting users as they log in, touting the service's Video Search beta and streaming digital audio content courtesy of its partnership with XM Satellite Radio (NASDAQ:XMSR).
Stylistically speaking, the screen's new look resembles cluttered multimedia eye-candy portals like Microsoft's (NASDAQ:MSFT) MSN.com or America Online's own AOL.com. However, the buttons for AOL Radio and AOL Video Hub truly stand out, as America Online tries to promote the practice of serving up chunkier bandwidth to its visitors.
AOL promises the largest collection of licensed video content on the Internet, with over a million streams on demand. Just as Google (NASDAQ:GOOG) and Yahoo! (NASDAQ:YHOO) have been building out their video search functionality lately, it's what AOL needs to do to stay relevant given the established base of broadband surfers.
Members of AOL peaked three years ago with 26.7 million domestic users. Cheaper dial-up services, speedy DSL, and cable modem residential connections have not been kind to AOL's retention rate. Sporting declining numbers every quarter, even as more consumers migrate online, isn't a badge to wear proudly.
That's why America Online has been repositioning its AOL.com site as a catchall portal. However, deals like the one with XM, to stream the satellite radio purveyor's music to AOL's paying subscribers, show that AOL still wants to be taken seriously as an ISP.
Oddly enough, as bad as things may seem for Time Warner these days, the shares have actually beaten the market since being recommended in the August 2002 issue of Motley Fool Stock Advisor. Those results have been helped by the company's sharp improvement in online advertising over the past few quarters. That's why Time Warner can't neglect AOL.com -- and America Online itself.
So bring on the new welcome screen! It's certainly better than standing still. It's also a whole lot better than Plan B: replacing its "Goodbye" logoff sample with "Leaving so soon? Please don't go. We can work it out. I can change!"
Longtime Fool contributor Rick Munarriz is proud to be one of those 20.8 million AOL subscribers. He does not own shares in any of the companies in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
