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March 14, 2006

AOL Announced That Video Is Core Part

posted by MR WAVETHEORY at 3/14/2006 10:35:00 PM

AOL announced that video is a core part of its online growth strategy. AOL clearly sees itself competiting with Google. You may recall that Google Video is a direct competitor to AOL Video. It is surprising to see that there is no mention of Google as an advertising partner since Google is currently AOL's largest source of advertising revenue. It looks like AOL is done using Google and now plans to go stag. This only makes sense since AOL owns a treasure trove of online content that it produces via TimeWarner, while Google has no content production capabilites of its own. Watch out Google - your largest partner is turning into your largest competitor.

AOL said it plans to launch on Wednesday one of the biggest free video services on the Internet, serving up vintage shows and short clips backed by online advertisements.

The service, called In2TV, will launch with four advertisers -- Intel Corp., (INTC.O: Quote, Profile, Research) Kia Motors Corp., (000270.KS: Quote, Profile, Research) Kraft Foods Inc., (KFT.N: Quote, Profile, Research) and Hershey Co. (HSY.N: Quote, Profile, Research)
"It's from the strength of the online advertising market that we can bring free on demand (videos)," Kevin Conroy, executive vice president of AOL Media Networks said in an interview.
In2TV will feature thousands of shows from corporate sibling Warner Bros., which owns the rights to shows that include "Welcome Back Kotter", "Kung Fu" and "Growing Pains."

AOL now sees video as a linchpin to the company's turnaround after its online presentation of the Live 8 global concerts last year were watched by more viewers than those on TV. Free videos will make up the bulk of its growth, Conroy said. "The real volume of activity is in the free streaming (video) model," he said.

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