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The Honolulu Advertiser

Posted on: Sunday, April 18, 2004

Joining the Web may provide much-needed boost to AOL

By Leslie Walker
Washington Post

WASHINGTON — America Online is uprooting its walled garden and replanting it on the World Wide Web. The move raises the question of whether AOL may one day wind up with fewer walls and more open turf, like the rest of the Web.

AOL executives insist they have no plan to give away their online content and become mostly ad-supported, like Yahoo. Still, something significant appears to be happening under the hood of AOL's technology.

During the past year, the new-media pioneer from Dulles, Va., has built a fancy system to publish its fare not in the company's proprietary programming language called Rainman but in hypertext markup language (HTML), the open standard used to create regular Web sites. AOL fired up the system about two weeks ago.

Already it has moved several channels out of Rainman, including sports, news and personal finance. By the end of the year, all of AOL should be ported to the Web-based system, with a subscription screen still preventing nonmembers from viewing most of its content.

"This will enable AOL to take off," declared James Bankoff, AOL's executive vice president of programming, properties and production. "This is a big enabling strategy for us."

Compatibility problems

While it's not yet clear exactly what the new approach will enable, the change does alter part of what made the company unique. AOL never really was a Web site, even though it had a Web site called AOL.com. AOL's colorful, graphical service existed in a parallel universe on the Internet, created by special software, some of which had to be installed on each subscriber's computer.

When the Web exploded during the 1990s, it didn't take a technical genius to figure out that AOL would eventually face compatibility problems with the rest of the Internet if it persisted in publishing in a different format. Advertisers had to adjust their ads for display inside AOL's funky Rainman system; AOL's content partners had to do the same. Companies were willing to go the extra mile when AOL was the Internet's King Kong, but all that changed after AOL's ill-fated merger with Time Warner Inc.

After proclaiming for years that Rainman was superior to HTML, AOL executives reversed course a year ago and decided to move the whole service to the Web.

So what kind of changes will the new publishing system mean for AOL and its members?

First, AOL pages are becoming more ad-friendly, accepting sizes that have become standard across the Web. Second, the pages will be able to automatically display more personalized content selected by users. Third, the pages already are starting to look and act more like those of Yahoo and Microsoft's MSN, with consistent navigation, fewer new windows and bigger viewing areas.

Moreover, subscribers will soon be able to sign on to AOL.com from any computer without installing AOL's special software and get most of the company's content. As a result, more people will be able to use the service at work, where employers often forbid installation of AOL software.

The at-work boost could be significant. For example, while AOL News was the most trafficked news site on the Internet last month, drawing 23.2 million visitors, only 4.5 million came from work. That was half as many people as Yahoo News drew from work, according to comScore Media Metrix.

Finally, the open Web programming language is making it easier for AOL to redistribute content outside of the company's so-called walled garden. With a few clicks, AOL editors can now share programming with, say, Netscape .com, Moviefone.com and AOL's other siblings in the Time Warner family. Before, sending content to partners required so much manual work it often wasn't attempted.

Battle for survival

To be sure, AOL has never needed help so badly. It is engaged in the fiercest survival fight of its

19-year history after losing 2.2 million subscribers last year and watching revenue tumble 5 percent. AOL's key problem is that its core business was always dial-up Internet access, and subscribers are defecting for discount dial-up plans and faster, broadband access from phone and cable providers.

Jupiter Research vice president David Card said AOL's popular music channel likely will be one of the first AOL will use to tease in new audiences and advertisers.

"They are trying to decide, do we make more money by expanding our reach and selling more ads, or do we make more money by selling subscriptions to a big package with a lot of stuff in it?" Card said. "I honestly don't think AOL has figured out the magic formula yet."