Summit News

AOL to expand in 14 global markets

NEW YORK (Reuters) - AOL plans an aggressive global expansion this year and will introduce a new version of its popular e-mail service this summer to include its AIM instant messaging platform, the chief executive of Time Warner Inc.’s online division said on Wednesday.

The company plans to refresh its Web portal and launch new ones in 14 countries over the next 18 months in a renewed focus on global markets, CEO Randy Falco told the Reuters Global Technology, Media and Telecoms Summit in New York.

AOL, which sold off its European dial-up Internet businesses in 2006 in an overhaul aimed at boosting online ad sales, plans to target new markets with its free portal.

This year, it has launched portals in India, Austria and the Netherlands. It will launch revamped versions in France, the UK and Germany, with more markets to come.

“I want to move as fast as we can,” Falco said.

AOL is also testing a new version of its e-mail service and expects to launch it widely on its Internet portal page around the end of July.

“I thought we were a couple of generations behind our customers on a very important product,” Falco said.

AOL aims to maintain a steady stream of new products to keep users on its sites. In an era of burgeoning new media outlets, failing to refresh technology poses a major business risk, he said.

“It may not hit you that year, but it ultimately will hit you,” Falco said. “You’ll suffer from bad development and not having products in the pipeline.”

AOL LLC Chairman and Chief Executive Officer Randy Falco speaks during the Reuters Global Technology, Media and Telecoms Summit in New York, May 16, 2007. REUTERS/Keith Bedford (UNITED STATES)

E-mail is a key component of AOL’s strategy to capitalize on a surge of Internet advertising, as such accounts direct 52 percent of users’ page views on its sites.


The company plans to establish an office in the China region to explore re-entering the market, but only after it has completed a thorough evaluation. Falco said it was unlikely AOL would launch a service in China next year.

China has bedeviled media and online executives for years, most notably News Corp.’s Rupert Murdoch, who sold his stake in a China-focused TV broadcaster to China Mobile, but retained a 17.6 stake in Phoenix Satellite Television.

That has not stopped interest in the region. News Corp.’s MySpace launched a venture to test a version of the popular social network site with the venture capital arm of publisher IDG and a Chinese investment company.

AOL’s 2001 $200 million venture to bundle its services with computers from Chinese PC maker Legend was abandoned, though it now operates a Chinese-language portal for American audiences.


Of the 35 types of services it offers, Falco said AOL ranks among the top-four providers in about 40 percent of them, with entertainment services a key strength. The company’s goal is to be among the top three or four in all the categories, he said.

Bolstering AOL’s social networking, news and sports services are current priorities for improvement, Falco said.

“Social networking exists today because of AOL, and they lost their way,” Falco said. “We have to work hard on getting social networking aspects back into our portals.”

Time Warner shares closed 1.6 percent higher at $21.60.

Additional reporting by Michele Gershberg