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AOL Updates Software, Curbs 'Pop-Up' Ads

October 16, 2002|From Bloomberg News

NEW YORK — AOL Time Warner Inc.'s America Online on Tuesday introduced software with features for high-speed Web access and will eliminate most "pop-up" ads, the latest efforts by the No. 1 Internet service provider to reverse slowing growth.

Pop-up ads, or advertisements that spring up on customers' computer screens, are being cut because an increasing number of users said they don't like them, America Online Chief Executive Jonathan Miller said.

America Online's new Version 8.0 adds features meant to attract consumers who want high-speed Web access, a potential growth area beyond the service's current 35 million users. America Online typically debuts software in the fourth quarter to attract customers before the holiday computer-buying season. Analysts said it's difficult to link sales and new software.

Shares of New York-based AOL Time Warner rose 81 cents to $12.13 in New York Stock Exchange trading. They've declined 62% this year.

The Internet service had projected that pop-up ads next year would generate $30 million in earnings before interest, taxes, depreciation and amortization, or EBITDA, Miller said.

The company intends to recover that by tapping new revenue sources, even though it expects ad sales to decline in 2003.

America Online will continue to run pop-up ads until current contracts expire, Miller said.

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