AOL Launches New Voice Mail Service

UPDATE: America Online has unveiled a new voice mail service for its
subscribers that lets them manage and forward voice mail files digitally, along with their e-mail, in one inbox.

The premium product, which costs $5.95 a month, is part of the ISP’s enhanced broadband offerings it is gearing up to release next week, which will include exclusive video content, software that blocks pop-up ads and other features. AOL has launched a new marketing campaign to trumpet the jazzed-up features.

The new Web-based voice mail product is also available to its narrowband subscribers, and is designed to help expand their messaging capabilities when they’re away from home or the office, a company official said.

The online unit of AOL Time Warner offers a similar voice mail service for its narrowband base called Call
Alert, which it launched in October. So far, about 300,000 narrowband users have signed up for that service, which costs $4.95 a month. Like the broadband voice mail service, it lets users configure messages they want to leave callers, such as “I’m online, send me an e-mail,” or “try my cell phone.”

“This is a great tool, not just for a busy family but also for the small office,
home office segment,” said Jeremy Verba, general manager of voice services for AOL. Broadband subscribers to AOL’s service get seven screen names within the service; the new broadband voice mail service also lets users configure seven different voice accounts, AOL said.

“The streaming .WAV files show up in on inbox, so the user can treat them
the same way they treat e-mail,” he said. “They can sort them, even forward
them, rather than listening in a linear fashion.”

It also lets users retrieve home voice mail messages and e-mail messages
by phone, and use voice commands to hear e-mail and send replies via voice
with spoken commands, integrating aspects of the AOLbyPhone product.

Verba said the product launch involved integration work with local and
regional telephone service providers around the country, including
installing AOL servers in or near telephone companies’ co-location facilities across the country. Subscribers can save about 100 voice mails, or about 3 minutes of streaming files on AOL servers.

Verba said he doesn’t see the voice mail service competing with similar voice mail services already offered by telephone wireline companies. In the narrowband voice mail service, for example, the telephone companies take a cut of the monthly fee that AOL charges. With the broadband voice mail, the service may involve an extra cost from the subscriber’s phone company.

One analyst said the AOL Voice Mail product could actually help promote greater use of the voice mail service over wirelines, which is largely a niche service in U.S. households.

“We’re still a society that functions on answering machines in the home,”
said Aurica Yen, senior analyst with industry research firm Yankee Group. The firm’s data show that
about 18 percent of U.S. homes use some form of voice mail messaging product
from their telephone providers.

“The service could be a good step for AOL because it does build on the bundling proposition that other broadband providers have built in,” she said, such as cable companies that provide data, and increasingly, telephony services along with their video services to subscribers.

The service comes on the heels of other recent enhancements that AOL is pitching to high-speed users, such as MusicNet on AOL, an online music subscription service that lets users download, play, store and record MP3 music files for between $4 and $18 a month.

Another service, AOLbyPhone, is a premium service that lets
users access e-mail along with news headlines, sports scores and smaller
bits of information such as stock prices. AOL rolled out its pop-up ad blocker software two weeks ago.

Wall Street analysts, including Tom Wolzien, senior research analyst Sanford Bernstein & Co., are taking a cautious view about the latest upgrades.

“The question is, what is consumer acceptance for this going to be,” said Wolzien, who tracks media companies. “I think the company has to reprove itself in the online business. I’m not saying I think no one’s going to give them the benefit of the doubt.
But consumers have to see what the goods are in order to see how it’s accepted.”

AOL is moving to make the most of the growth in broadband among U.S. consumers, and looking for ways to keep its huge base of 35 million dial-up subscribers with the AOL service in some fashion when and if they upgrade to high-speed providers.

Research firm Strategy Analytics estimates that 27 percent of all U.S. Internet homes presently use broadband connections, with expectations of more than 70 percent by 2008 — that’s approximately 64 million subscribers or 59 percent of all U.S. homes.

Already, the erosion of AOL’s dial-up base is starting to show. During the fourth quarter it lost 176,000 narrowband subscribers.

Although voice mail is certainly not a new concept to users, Yankee Group’s Yen added, it is increasingly seen as something to be managed along with other messaging systems. “It builds on the messaging services that resonate with consumers. Even among broadband users who use the connection for streaming media, they still mostly use the high-speed connection for e-mail, instant messaging. This is built on that core competency,” she said.

AOL’s Verba said the new service is where the company is adding value to its core membership as well as its broadband-oriented services. “We really view this as an important part of the AOL strategy.”

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