AOL looks to premium broadband

Author:
Publish date:

AOL Time Warner Inc.'s preliminary 2003 outlook for its America Online INc. division
isn't a pretty one, as the company expects earnings before interest, taxes, depreciation and amortization to be down between 15 percent
and 25 percent from this year (2002 EBITDA is expected to be around $1.8
billion).

The announcement came during an analysts' meeting in New York, where the
company also introduced a new plan to attack the broadband market.

Lisa Hook, president of AOL Broadband, said AOL will attempt to
position itself as a premium broadband brand to be added on top of other
broadband-access plans (from a cable system or digital-subscriber-line provider) for about $15 per
month.

The bring-your-own-access approach is something the company has offered but
has not made widely known.

The hope is that by partnering with cable and DSL providers, AOL Broadband will be able
to drive subscribers to more than 10 million by 2005.

The reason for the decline in 2003 will be the result of sharp advertising
and commerce revenues, which AOL expects to drop between 40 percent and
50 percent.

It expects subscription revenues to grow, offsetting some of the advertising
and commerce losses.

Related