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AOL tests AOL.com feature

The online giant quietly launches a beta version of a personalized news service on its AOL.com site, the latest step in the site's redesign process.

AOL.com, the Web site and portal progeny of online service America Online, has quietly launched a preview version of its My News section, the latest step in the site's redesign.

The new service features headlines grouped into categories such as Top News, Business, Entertainment, Sports, and Technology. News services featured on the site include the Associated Press, Reuters, and SportsTicker, which is a service of ESPN.

"This is the stepping stone of their remaking of AOL.com," said Kate Delhagen, an analyst with Forrester Research. "Clearly they're headed in the repositioning, realignment stage. They want to stage things, and get things right before they launch the AOL.com portal."

An AOL spokeswoman said My News is currently in beta, and that its rollout marks a general evolution of new features on the Web site. She declined to give details on how long the beta period would last or when the site's redesign would be completed.

"Welcome to the preview version of My News!" reads the welcome message on the site. "Bear in mind that this is only the preview version of My News, meaning that we've only just gotten started!"

The greeting also notes that future additions to the site will include horoscopes, an advice column, crossword puzzles, and a news wire by Bloomberg.

AOL.com also offers personalization features that are common among portals, such an investment resource that provides stock quotes and financial information, weather reports, and sports box scores. Personalization features are offered after the user registers with the site.

AOL.com is currently one of the most visited sites on the Internet, according to statistics by Net research firm RelevantKnowledge. The site's traffic has been helped in part by the 12 million subscribers to AOL's proprietary online service, who get AOL.com as their default home page when logging on to the Internet.

The Dulles, Virginia-based company has been building up AOL.com for the past year, and has slowly beefed up the site's free offerings to include email, a Net search engine, and 16 content channels, among other features.

The soft launch of My News could represent a shift in the firm's Web strategy as it leverages its high traffic volume and advertising clout to challenge the leaders in the portal race. While AOL has relied heavily on generating revenue via the $21.95 per month subscription fee to its proprietary service as well as lucrative partnerships, the redesigned AOL.com site might be the company's play to take a slice of the Web-based advertising and commerce pie.

AOL, which has gained significant membership with its one-stop-shop model of offering access plus services and content, faces increasing competition from portals that are teaming with access providers. For example, Yahoo and MCI Communications offer cobranded Net access, and AT&T bundles access with portals Excite, Lycos, and Infoseek.

But there is the fear that the transition from proprietary service to portal player will not be a smooth one. If AOL continues to be concerned about "cannibalizing their traditional subscribers, I think it will put them in troublesome position," said Jupiter Communications group director Mark Mooradian.

AOL's straddling of two business models--one in the proprietary space and one in the free Web space--may put it in a bind about where to focus its resources.

"If you look at the number of users they control in the industry and number of dollars they spend on marketing, the real question is when will AOL divert a lot of these marketing dollars from their flagship service to AOL.com?" Mooradian added.