You’ve Got Mail: AOL Rolls Out New 5.0 Online Service

In an attempt to maintain and expand its base of nearly 20 million subscribers, business-to-consumer e-commerce powerhouse America Online will introduce the much-touted 5.0 version of its online service today.

Despite the fact that many analysts predicted a decline in AOL’s fortunes as more people came online, the opposite seems to have occurred. AOL has maintained its number one position, which some observers attribute to its marketing persistence and user-friendly software.

Starting today, the Dulles, Virginia-based online service provider is expected to flood mailboxes with free disks of its new program. The software can also be used with non-PC devices such as TV setup boxes and cell phones.

Lineup Of New Features

AOL 5.0 offers a lineup of new features, including a calendar that lets users schedule personal appointments alongside such events as a TV show. Since AOL stores the calendar’s events on a central server rather than on the user’s hard drive, it will also be accessible from handheld devices.

The new program also has the ability to detect the connection speed of the user. This feature allows AOL to automatically reconfigure itself, offering video clips if a user is found to have a high-speed connection. Additionally, AOL 5.0 will be able to determine if a user is accessing the service from a non-PCdevice — so that it can deliver only viewable information such as stock quotes or e-mail.

AOL Anywhere

Company officials added that the enhancements made to AOL 5.0 are part of its “AOL Anywhere” strategy, which is designed to expand its range of penetration to other non-PC devices.

As evidence of this strategy, AOL is developing an interactive service called AOL TV that operates on television set-top boxes. It has also teamed with Hughes Electronics to make a box that works with Hughes’ satellite TV service. In addition, AOL has announced a deal with 3Com Corp. that will make AOL e-mail available on 3Com’s Palm series of handheld organizers.

Creating Brand Loyalty

Some analysts believe that the added functionality of AOL’s new 5.0 version underscores its success in creating brand loyalty. One of the new services being offered as part of the package, “You’ve Got Pictures,” allows users to receive via AOL digital copies of photographs processed by Eastman Kodak Co. The service costs about $6 (US$) for every roll of film that is developed.

Industry observers point out that it is this kind of feature that keeps users hooked to AOL’s service. However, it is also the type of service that appeals to those who are new to the Internet — thereby attracting more subscribers.

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