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AOL drops Dow Jones

The online service declines to renew the contract of the Dow Jones Business Center, one of its most-visited areas.

    Usually when America Online (AOL) partners leave the service, they do so quietly. But when AOL decided to drop the Dow Jones Business Center, the Center's editor posted a letter informing its apparently loyal members and took the online giant to task for its decision.

    And so far, members have responded.

    Timothy Andrews, editor of online services for Dow Jones, posted a notice at the Dow Jones area on AOL Friday afternoon, saying AOL will not renew its contract and inviting AOL members to "read our news on other online services or on the Web." The center also sent out the letter to the more than 100,000 people who subscribe to a twice-daily market update.

    Dow Jones is only the latest partner to be severed from the online service. Ever since AOL changed its revenue model last December, charging members flat fees and relying on advertising and transactions to make up for the lost hourly fees, it has been paring down its service to have fewer offerings that generally bring in more revenue.

    And the decisions, as this case illustrates, are not always popular with members.

    The feedback has been overwhelming, Andrews said.

    By mid-afternoon on Monday, Dow Jones had received several thousand responses to the letter, only three of which were negative. The majority bemoaned the fact that the area will disappear from AOL. Some posting on the public message boards vowed that they would switch services to continue getting Dow Jones.

    "I have just recently been active in the stock market and have found Dow Jones Business Board very informative," said one message. "Sorry I will have to find another online service that will carry the Dow Jones. We have been with AOL a very long time--I guess it is time for change."

    "Yo, Steve Case!" began another. "This is a MISTAKE. Please reconsider this decision. What is the rationale for this decision??? What are you thinking???"

    Others were more succinct: "The only reason I am with AOL is their financial section. Now if they intend to dump DJB then I intend to dump them."

    According to Andrews, the center draws more than 100,000 unique users per day, making it one of the top ten destinations on AOL.

    But both AOL and Dow Jones officials agree that the old Dow Jones model no longer fits within the new AOL business model. In the old days, AOL paid for content to lure members. AOL would then make a portion of the hourly fees that users paid to access popular content. But when AOL went to flat-rate pricing in December, it eliminated hourly fees as a source of revenue and started relying more heavily on advertising and transaction fees.

    "We have been looking ahead to streamlining our service in a way that makes sense," Goldberg said. "It's all part of the programming strategy that we're going for. We're making the service more intuitive and more contextual."

    "Their business model has changed," Andrews said. To adapt, Dow Jones would have to generate most, if not all, of its revenue from advertising and transactions. In the old days, AOL paid Dow Jones for its content. "The [new] economic model just didn't work for us. Our principal focus is delivering quality news from the Dow Jones Business Center. We didn't see we would make a fair return from principally advertising and transaction revenues."

    Both Andrews and AOL spokeswoman Wendy Goldberg said, however, that it is possible that Dow Jones will appear on AOL in some other form.

    Meanwhile, AOL is in the process of launching a new channel system. The Dow Jones Business Center will be gone by the end of the year, but AOL's business channel will have partners such as Reuters, Worth, the New York Times, Motley Fool, Newsweek, Briefing.com, and Business Week, Goldberg said.

    The business center, as it currently exists, will be gone come January 1.