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August 4, 2006

AOL Decides to Compete, Gives Away 5 Gigabytes Storage Accounts

AOL is busy these days.  First the recent announcement that it would offer free email and other services to broadband users, while still charging dedicated dial-up users.  That makes sense.  Hi-speed users have plenty of places to go on the web that wouldn't otherwise include AOL, and the dial-up people have to start somewhere.  Then the company announced that it was shedding 5,000 jobs.  Time Warner needs a leaner money-making machine here. 

The latest news is that AOL is offering 5-gigabyte digital storage lockers.  That includes storing any type of document, no charges for uploads, a drag and drop interface, and permission based access by others.  What drives this beyond low storage costs?  Advertising.  Every online tech giant lusts after the numbers that Google brings in with its advertising supported free services and ad placements.  It's a great model to follow but hard to get right.  Just ask Microsoft. 

Google, Yahoo and Microsoft continually up the ante on each other, whether its blogging feature, photo storage, free email, calendaring and other online amenities.  AOL usually never comes up in the conversation.  Five gigabytes is the most storage that any one of these companies has ever offered.  Yahoo and their telco partners don't give anything nearly close in that amount of space even to the paying customers.  Five gigabytes should attract a few eyeballs and probably a few competitive responses.

Stories are in Fox News, ZDNet, Playfuls, and Digital Trends.

August 4, 2006 | Permalink


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