AOL’s Portal Entrance Afoot

When America Online shifts
from being an oft-perceived dusty dial-up subscription service to a
one-stop-shop Web portal, there may be one area where they
jump right in and compete: video search.

As the media conglomerate moves to an ad-supported model, hoping to snatch revenue from the growing
online advertising market, it is pushing the upcoming launch of its portal.

Aol Portal
Click for a larger view of AOL’s portal.

The portal will offer free access to most of the features that subscribers currently receive, including news, Internet radio, videos of music concerts and articles from magazines published by AOL’s publications at Time.

However, the trick to the sea change, which will begin this fall when AOL
starts parsing content to the masses for free, may be that AOL has positioned itself to compete aggressively with video search. It will need the edge as it competes against other
heavyweights like Google , Microsoft’s MSN and Yahoo in the portal arena.

“At a very base level, we are focused on user experience,” David Liu, vice
president and general manager at AOL, said. “And it works very well.”

Liu has reason to be confident that video search will make AOL a front
runner in the race for seemingly never-ending revenue from online
advertising.

With the acquisitions of audio and video search engine Singingfish in 2003,
and its relationships with Time Warner and other company properties, AOL
already has access to 1.25 million video clips and 15,000 video assets,
according to Liu.

Earlier this month the company also inked deals with
13 new partners
, including CBSNews.com, CNN, Hollywood.com, IFILM, Like
Television, ManiaTV.com and MarketWatch, allowing it to feature video
content feeds for its properties.

“People want to control what they watch and when they watch it,” Liu said.

That is one reason the online advertising market continues to grow. With
more viewers moving from television to the Internet, ad dollars are looking
for a new home. Advertisers are following and revenue is only expected to
grow.

Forrester predicts revenue to increase from $26 billion in 2010 from $12
billion in 2004.

As high-speed Internet connections in the United States continue to
flourish, a need for video content is right behind.

Aol Portal
Click for a larger view of AOL’s video search.

Charlene Li, an analyst at Forrester, says the reality is it will take
years before the really good video content will be available online due to
rights management and copyright issues.

“Remember, it took three years between the rise of Napster and the
arrival of iTunes for digital music to make headway,” she wrote on her blog,
referring to Google’s entrance to the video search market.

However, AOL says its new portal will have a leg up on Google, Yahoo and
MSN, because it is designed for use with broadband, says Liu.

The portal will have streaming video and heavy graphics that can bog down dial-up services. Although Google’s Web page carries over 2 million video clips, Liu
says the footage doesn’t deliver the quality that AOL’s portal will deliver.

AOL says its network of brands drives 109.7 million unique views per day,
second on the Internet only to Yahoo, but its organization into a
coherent whole will optimize business.

“We decided we needed to do a better job circulating traffic around the
network we already have,” Kerry Pearce-Parkins, director of product
marketing at AOL, said. She was quick to point out that AOL was not a
declining and antiquated dial-up business but a profitable and growing Web
business.

The new site will offer much of the same products as other portals,
including search, free e-mail, news and weather highlights, personalization
options, music clips and other Web information.

News Around the Web