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AOL testing service upgrade

America Online starts testing a feature that lets customers dial in to the Net without launching AOL's content-heavy software, part of a campaign to win back the hearts of online consumers.

America Online has begun testing a feature that lets its customers dial in directly to the Internet without launching AOL's content-heavy software, part of the company's campaign to woo back online consumers.

The feature, called AOL Dialer, is part of an overall update of the online service. Code-named Tahiti, the update will include other features such as animated instant-messaging icons as well as new service controls. A company spokeswoman said Tahiti will be an incremental step in the AOL software's evolution, rather than a giant leap.

"We haven't determined how we will roll these features out and how they will be branded," said AOL spokeswoman Anne Bentley. "These are new features that we're testing, and enhancements to the service."

Bentley did not offer a time frame for Tahiti's release and said AOL has not yet determined the actual name for the upgrade.

The Tahiti tests come during a critical time for the online service. AOL's dial-up subscriber base has declined by nearly 2 million subscribers over the past four financial quarters. Much of the drop is due to subscriber defection to broadband and the decline of promotional and free members. In the quarter ended Sept. 30, AOL reported a 688,000-member decline and a 33 percent drop in advertising revenue from the previous year.

AOL has tried to stem the tide by accelerating its product development efforts. In the past year, it has recast its service as a premium add-on for broadband users by bolstering it with streaming video and exclusive editorial content. AOL now offers its service via dial-up for $23.90 a month, via DSL (digital subscriber line) for $55 and as an add-on to customers using a third-party broadband provider for $14.95.

AOL is also testing a discount dial-up service under the Netscape brand, which will charge people $9.95 a month for unlimited dial-up access. The difference is that Netscape will not come packaged with content and features from the AOL service, but it will instead include an e-mail address, links to Google search pages and some news links.

As for enhancements to its flagship service, AOL has been trying to infuse new life into its software after years of stagnancy. The Web giant in July released the latest version of its software, dubbed AOL 9.0 Optimized. The service includes Web page caching software, flashier graphics and new features for its e-mail and IM clients, among other additions.

But the biggest transformation for AOL in recent years was its launch of AOL 8.0 which, on the surface, was a dramatic departure from its previous forms. The service included a more graphic-intensive look and feel and eliminated pop-up advertisements.

Details of Tahiti were first reported by Web site BetaNews.