AOL INC. (AOL)

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AOL Unveils Upgraded Online Service'

By Reshma Kapadia

NEW YORK (Reuters) - AOL Time Warner Inc. (NYSE:AOL - news) unveiled the latest version of its online service on Tuesday, integrating personal data, more content from its Time Warner assets and its online radio service a day after rival Microsoft disclosed a new version of its MSN service.

With the new AOL 7.0 version of the software, the nation's largest Internet services provider uses a member's zip code to provide such information as local weather, news and movie listings.

Analysts said the latest upgraded version is essentially a tweaking in terms of what users will see.

``We are not starting a new Web site,'' Jonathan Sacks, president of AOL Interactive, said in an interview. ``Every change we make (is) incremental because it upsets the audience.''

Local programming will be threaded throughout the service and its many channels, such as shopping and music.

AOL also tinkered with some core features, such as instant messaging, e-mail and buddy lists, but the changes are small. The version also offers ``AOL Box Office,'' which offers access to tickets for concerts, games and other events, expanding a deal with Ticketmaster.

AOL 7.0 also adds high-speed content such as news reports, sports highlights and short video clips from Time Warner properties Warner Brothers, HBO, CNN, as well as information from CNET Networks Inc.(Nasdaq:CNET - news), CBS News and the National Basketball Association, throughout the service rather than keeping it in a separate window.

The move comes as AOL begins offering high-speed Internet service over Time Warner's cable systems. The company plans to offer the service in 20 markets by the end of the year.

Jeff Kimball, executive director of the AOL Brand Products Group, said several million subscribers have high-speed connections.

Some industry analysts have wondered when AOL will create personalized services for its users such as a version for news junkies and another for music lovers. Kimball said it was not out of the realm of possible, but said the company was not currently considering such a feature.

AOL Time Warner plans a multimillion dollar print and television campaign in an effort to counter Microsoft Corp.'s MSN (Nasdaq:MSFT - news), which is aggressively trying to chip away at AOL's market share.

AOL has 31 million subscribers, compared with MSN's nearly 7 million. MSN Monday unveiled a new MSN 7.0 version of its service, which will be available on Oct. 25. It features changes to its Web sites and services, including its free Hotmail electronic mail.

One of the biggest changes to the MSN service will be .NET Alerts, which send information such as traffic conditions to an e-mail account, mobile phone or instant messenger.

The software giant said Monday it will also offer high-speed access to 90 percent of DSL-capable U.S. homes by early next year after signing pacts with major telephone companies -- similar to the ones AOL has with phone providers.

Shares of AOL Time Warner closed flat at $33.50 a day before the company posts its third-quarter results.

Analysts expect its AOL and cable units to drive much of the growth, helping offset the sharp downturn in advertising spending that will likely weigh on its networks and publishing units. They will closely study AOL Time Warner's revenue, which fell short of many analysts' estimates in the previous quarter.

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