AOL to Offer Free Email

Posted on May 11, 2005

Reuters reports that AOL will be offering free email accounts to users of the web-based AOL Instant Messenger service. While free email from AOL will probably be popular the risk is that they could lose subscribers to the free accounts. Many AOL subscribers hold on their paid accounts just for the AOL email. However, AOL said it will not giveaway AOL.com email accounts as part of the free service. Also, the terms of service on the free accounts might not be as customer friendly as with the paid service. The Washington Post reports on the risk associated with AOL's free email plan:

Analysts said the risk is that AOL may accelerate the steady decline in its subscriber base by causing more people to stop paying for content and services since they will be able to get them for free. "Maybe this will cause the access business to wind down faster before the advertising business picks up," warned David Card, an analyst with Jupiter Research.