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AIM update puts price on new buddies

A test version of AOL's revamped instant messaging software adds a bunch of new icons--but they'll come at a cost once it launches.

America Online has released a test version of its popular instant messaging software that expands subscription-only features, the company has confirmed.

Earlier this week, the Web company quietly posted a link to the AOL Instant Messenger 5.9 Beta. The update adds a batch of personalization features, such as static and animated buddy icons, sound effects and "wallpaper" images for the IM windows, but these will come at a price.

The company will charge $9.95 for a yearly subscription or $1.95 a month to access these features, AOL spokeswoman Krista Thomas said. AIM users can also buy animated "SuperBuddy" icons outright for $1.95 each or $4.95 for three. Existing icons will remain free.

The beta version arrived about the same time that AOL warned that a security flaw in AIM's user status function could be vulnerable to "buffer overflow" attacks. The company asked people to download an updated version of its current AIM 5.5 software.

AIM 5.9 is expected to launch in September, Thomas said. The test release of the update was first reported by BetaNews.com.

The update also places other features behind the subscription wall. AOL already charges for AIM-based video games and business applications in hopes of tapping direct revenue.

The subscription business is part of AOL's overall revenue diversification strategy to supplement its declining dial-up business. The company has already lost more than 3 million dial-up subscribers over the past two years and is trying to stem the losses by launching new businesses.

Its "bring your own access" plan is a $14.95 version of its service that's geared toward broadband users but is cheaper than its $23.90 dial-up ISP plan. AOL has also launched a $9.95 stripped-down dial-up service called Netscape Online in a bid to tap the discount ISP market.

While AOL's dial-up losses continue to mount, the Time Warner division reported more promising results in its advertising business in the last quarter. The company's ad revenue increased 23 percent from the previous year, after declining a staggering 40 percent from 2002 to 2003. Most of these gains came from a paid-search relationship with Google.

Along with the new subscriptions on AIM, the new beta also includes photo sharing capabilities with its "You've Got Pictures" software. Users can send each other photos over IM, or make direct links to a Web-based photo storage page.

The new service also includes an AIM browser toolbar that blocks pop-ups, and features links to games, weather, personals and search.