AOL bets future on broadband
The main element in Miller’s always on vision is, not surprisingly, broadband connections. AOL is playing catch up with DSL and cable providers, including rivals Yahoo and MSN, and for the past several months has been trying to keep its dial-up subscribers in the fold with a marketing campaign for its broadband service. Broadband penetration of U.S. households was close to 60 percent in 2002. Miller said that he expected AOL’s broadband usage to top 50 percent in 2006 or 2007, which puts AOL far behind the overall trends in the U.S.
Miller went on to describe the behavior of always on users, based on a survey of 25,000 AOL members. The research verified what is common knowledge: compared to narrow band users, experienced broadband users consume more information online, buy more products, engage in more community activities, communicate via several online tools, and spend twice as much time online.
Miller said the most important reason for going online was to get information quickly and that broadband users are three times more likely to look for news online than the average user. he noted a UCLA research study, which determined that users who have been online for at least four years online and have broadband connections exhibit the most advanced usage behavior.
Miller admitted that AOL missed the first wave of the always on revolution, but claimed the company will reclaim its heritage with the newest version of the software, AOL 9.0. He demonstrated several new features of 9.0. The new version include improve navigation, 30 customizable content modules, and a zero-click feature, which displays recent e-mails, instant messages or stock information by rolling over the menu item on the ‘Welcome” page. Version 9.0 includes blog software, called AOL Journals, and instant messaging integrates peer-to-peer file sharing. Parental controls have also been enhanced as well as the spam filtering for e-mail, Miller said. AOL 9.0 is due to in the next two weeks, according to Miller.
Miller emphasized that AOL is focused on translating insights about consumer behavior into product design features. He said the industry has gone from Internet boom to bust, and now we are in a building phase. "If we built it, it will be ok," Miller stated. More apt, AOL is banking that a ‘build and they will stay’ strategy to keep some of its 34 million subscribers from defecting.