If you are one of the 21.7 million remaining America Online accountholders, you no longer need to wait for family members with screen names under your master account to log off before you can log on. That's because the Time Warner (NYSE:TWX) subsidiary introduced its "Everyone on AOL" feature over the weekend, which allows up to seven screen names under a single account to log on at the same time.
Sure, there are some caveats. Only one person can log in using a dial-up connection; everyone else must have broadband connectivity. While all of the screen names can be on simultaneously, they cannot originate from more than two different network locations. Still, it's a sound move for Time Warner. Ever since AOL's popularity peaked with 26.7 million domestic members 30 months ago, membership levels have been gradually eroding.
With conventional broadband-based ISPs embracing the home networks and their simultaneous connections, this was a logical step for AOL. It will give subscribers one less reason to bolt after being spoiled by the speedy cybersurfing experience of their DSL or cable modem hook-up. Between migrating so many of its proprietary offerings toward browser-fueled landing pages, and the clunky embedded ads that slow down the dial-up experience, America Online has been practically funneling its users toward broadband connectivity lately. It's good to know it has a plan to keep the converts close.
The move also makes perfect financial sense. This past quarter found the company suffering an 8% dip in subscription sales, yet still coming back with a 45% spike in advertising revenues. Even if you whittle that sum down to the service's own organic gains, you will find that paid search is the key to AOL's improving profitability and that means keeping its customers on longer.
No, AOL isn't the next Yahoo! (NASDAQ:YHOO) or Google (NASDAQ:GOOG). It blew that chance years ago. Yet it has no problem piggybacking on the success of Google the way companies like GuruNet (AMEX:GRU) -- AOL's search feature spits back sponsored ads from Google with Time Warner collecting its share of the proceeds.
So, yes, Everyone on AOL seems like a customer-friendly plan, but it's also an acknowledgment that increased traffic can be a very good thing for an online operator these days. Now if only it could do something about Time Warner's sluggish share price.
You've got related headlines:
- Time Warner produced a really decent quarter thanks to the health of online advertising at AOL.
- The company is so confident in its future that it is initiating a dividend policy.
- No, it's not too late to save AOL.
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Longtime Fool contributor Rick Munarriz has been an AOL subscriber since 1992 and he thinks this plan is so much better than the Everyone Off AOL plan. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
