AOL 5.0 upgrade keeps it simple

America Online comes out with the latest release of its software next week. Called AOL 5.0, the upgrade offers some new features, like allowing longer screen names and more of them. But mostly it makes it easier to navigate through existing features, by including things like a new channel bar on the welcome screen, and provides easy access to AOL's calendar and much heralded "You've Got Photos" features.

Click here for screenshot And in a move sure to placate stock analysts who have been grumbling about AOL's (NYSE:AOL) apparent lack of a broadband strategy, the company made the software automatically recognize whether a user is on a high-speed connection, so it can offer expanded services like video on demand.

The software will officially be released Tuesday, Oct. 5 -- a little over a year since the last version came out -- but impatient AOL users can go to "keyword: upgrade" to install the new software right away. The download takes an estimated 1 hour 20 minutes over a 28.8K modem and about 40 minutes on a 56.6K modem, though no one ever gets connections that fast.

AOL 5.0 requires a Pentium-class PC with Windows 95 or 98 and 16MB of RAM to run, and requires about 38MB of hard disk space. A Mac version is under development, with no scheduled release date.

Bigger buttons
When users log on, the first thing they'll notice is the new welcome screen, which is bigger and has more buttons than the 4.0 release. On the left side of the screen is a channel bar that offers easier access to AOL's 18 channels including News, Personal Finance, Entertainment and Travel. The lower right-hand corner of the welcome screen has a new area called "My Places," which allows one-click access to up to five favorite areas on AOL.

"The overall goals of 5.0 are several, but number one, we always want to make navigation easier for our members," said Jonathan Sacks, senior vice president and general manager of AOL Interactive Services.

The welcome screen also has links to two Web-based services that AOL is hyping. First is "You've Got Pictures," a joint venture with Kodak that allows people to have their film immediately uploaded onto AOL when it is being developed and printed. Online tools allow users to edit the pictures, make greeting cards or include them in e-mails.

Sacks said that the photo link has been a big hit in early testing of the new site, sporting a whopping 70 percent click through -- or 22 times the average click-through rate on the welcome screen.

"It really does resonate," said Sacks. "People just couldn't believe it."

The calendar connection
The second link is to AOL's Web-based calendar, which has been updated to allow daily, weekly and monthly views. The calendar includes automated entry of entertainment listings, as well as group calendaring -- a feature Sacks said users outside the boardroom will find just as useful as those in it.

"I'm talking about group calendaring for soccer moms when the field was changed," said Sacks. "We can start to solve some of those problems."

Sacks said that AOL plans to offer an off-line version of the calendar in the near future, so users won't have to dial in to see their schedule.

Other features include bringing AOL mail up to speed with the rest of the Internet by allowing "signature files" -- usually a quote or online business card -- to be attached to the bottom of messages. Users will be allowed up to seven screen names (currently five are offered) and the names themselves can be up to 16 characters long instead of 10 -- something Sacks said caused a lot of extra work for AOL.

"It opened up a whole range of pornographic things you can say in 16 characters that you can't say in 10, and we had to block them," he said.

Broadband savvy
But AOL analysts say the biggest feature is the one that is unseen. AOL 5.0 is broadband savvy, sporting the ability to detect whether a user is on a standard modem or using a high-speed cable or DSL line.

"It's a must for AOL to show that they are preparing the soil for broadband," said Ulrich Weil, senior technical analyst at Friedman, Billings, Ramsey and Co. "It goes a long way to get the customer who pays the extra 20 bucks or so -- to give him something extra for that 20 bucks," he said referring to AOL Plus service, which offers AOL over a high-speed line for $39.95 a month, compared to $21.95 for the regular modem access.

"This is a chicken-and-egg argument," said Weil. "Broadband technology is there but customers say, 'Hey! We don't see what we're getting for our money.' "

But Sacks said that contrary to what most analysts believe, broadband is not the most crucial factor in AOL's future.

'We don't live in a world of white-collar people. We live in a world of people who deliver your FedEx package and fix your car. These people are not chomping at the bit to pay $39.95 a month.' -- Jonathan Sacks, senior vice president and general manager of AOL Interactive Services.

"If the analysts think it's a big deal, mazel tov. That's great," said Sacks. "But this is something that the analysts seem to forget -- we don't live in a world of white-collar people. We live in a world of people who deliver your FedEx package and fix your car. These people are not chomping at the bit to pay $39.95 a month."

Weil said that AOL is just being careful with its broadband strategy not to dive into it too quickly, before knowing whether it can handle AOL's vast membership. The last thing they want, he said, is a repeat of what happened when AOL switched to flat-rate billing from hourly charges -- a time when users got so many busy signals while trying to dial in that the company was nicknamed "America On-Hold."

"They know what it's like to have egg on their face," said Weil.

But Sacks shrugged off the criticism -- as well as the doom and gloom forecasts of what free Internet Service Providers and Web-based e-mail will mean to AOL's future -- as more of the same old criticism his company has always faced.

"If you work at AOL long enough, you get used to people rushing you onto life support when nothing's wrong," Sacks said.