January 31, 2005 8:55 AM PST
Time Warner packages AOL with Road Runner
The media conglomerate said the package will offer a custom version of AOL to paying customers of Road Runner, which is marketed by AOL's Time Warner Cable subsidiary. The move comes after years of speculation that Time Warner was working on ways to combine the strengths of its various Internet service provider businesses, and arrives after several rounds of redesigns to the Road Runner home page in an effort to make the service more customer-friendly.
Time Warner said that both subsidiaries will push to move existing subscribers to the new offering in the coming months. In addition to the specially created version of AOL, which will be tailored specifically for broadband users, the package will include 10 hours of monthly dial-up Internet service.
The company said the broadband package is expected to roll out over the course of the next several months. Road Runner will continue to be made available as a stand-alone service for subscribers who aren't interested in adding AOL.
Pricing for the combined package will depend on customers' connection speeds. Time Warner said it will test a number of price points as part of its initial rollout. AOL will sell advertising for both the new offering and RoadRunner.com. Time Warner Cable will manage billing and customer care for broadband services.
Don Logan, chairman of Time Warner's Media & Communications Group, which oversees both business units, said the combination of the AOL portal with Road Runner's ISP services should improve the company's chances of drawing new broadband Internet customers.
"Time Warner Cable should accelerate its acquisition of high-speed data subscribers, while AOL should enhance the lifetime value of its member base and maximize its revenues from online advertising, search, commerce and premium services," Logan said in a statement.
Under the effort, the cable business will provide an unspecified share of subscriber revenue generated by the program to AOL, which will in turn give a piece of its advertising, search and other revenues to Time Warner Cable. The company said AOL also will begin looking to market additional services to Road Runner subscribers. Time Warner said the two subsidiaries will combine marketing efforts to help promote the package.
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