AOL may drop member fees

May ax charges for services like having an e-mail account, to entice customers to keep using the offerings.

Time Warner's AOL division may eliminate charges for services such as having an e-mail account, in order to entice customers to keep using the offerings even if they switch to a different Internet service provider, a source familiar with the matter said Thursday.

The strategy talks have been going on for several months and are accelerating, said the source, who asked to remain anonymous.

AOL Chief Executive Jonathan Miller presented the proposal to top Time Warner executives in New York last week,

AOL subscribers have been abandoning the legacy AOL service in recent years. The company has lost nearly 30 percent of its subscribers since September 2002 and has watched as advertising revenues skyrocketed at Google and Yahoo.

AOL's first-quarter 2006 revenue fell 7 percent from a year earlier on a 13 percent drop in U.S. subscriptions revenue, which still represent most of its business. Advertising revenue, meanwhile, rose 26 percent year over year.

Last summer, AOL relaunched its site in order to open up to all Web users content previously available only to paying subscribers.

Currently, AOL members, paying monthly fees ranging from $14.95 to $25.90 depending on whether they use AOL as their ISP, get AOL desktop software that includes applications like a browser, a video player, a toolbar and an e-mail address. Separately, AOL offers Web-based e-mail service, which has always been free.

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