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AOL to make some software free

In bid to boost advertising revenue

In a move to increase its online advertising revenue, AOL said today it will make a range of its software and services free for broadband users.

This is the latest move in AOL's ongoing transition to an advertising-supported business model from its traditional subscription-based model. The company wants to bolster a healthy portal and an online advertising business built on content from parent company Time Warner.

With this offer, AOL is hoping to attract new users, as well as retain a relationship with the subscribers who drop their AOL dialup accounts.

AOL said it has retained the email addresses of users who discontinued the service over the past two years, so they'll be able to reclaim them.

The move could bring former users back within AOL's grasp and boost the number of viewers for online advertising campaigns. But users have been dropping their AOL subscriptions. Time Warner reported today that AOL lost 976,000 US subscribers in its second quarter.

AOL now has 17.7 million US subscribers, 3.1 million less than the same quarter a year before. Advertising revenue, however, rose by $129m (about £69m), a 40 percent increase.

The company said it will still offer, but no longer "aggressively" market, its dialup subscription service. The service costs $25.90 (£13.80) for the premium plan, which includes 50GB of storage and premium customer care. AOL also offers two lower-cost plans.

The free products for broadband users will include AOL's communications software, with a local phone number offering unlimited incoming calls. Other features include security controls for parents to manage their child's internet use.

The plan to attract broadband users will be "fully operational" in early September, AOL said.

In the coming weeks the company plans to roll out new products in safety and security, storage, personalised email domains and video and search-related offerings. The overall AOL software package will also be updated.

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