AOL programs back new business model

AOL unveiled five new online programs on Tuesday in support of its revamped strategy to focus on deriving advertising revenue from original content served up on its AOL.com portal.

The programs were introduced by new CEO Randy Falco Tuesday at AOL’s First Look event in New York, part of the Up Front event where television producers present new shows to prospective advertisers. It was Falco’s first major public appearance since he took the helm of the company from Jonathan Miller in November, after Miller was fired abruptly.

AOL, plagued for several years by both image problems and the loss of its former staple of online subscribers to broadband providers, is in the middle of a transition from a subscriber-driven business model to one fueled by online advertising.

The new programs, for which AOL is seeking corporate advertising and sponsorship so they can be delivered free to users, are integral to its new business model, said Kathy Kayse, senior vice president of sales and partnership alliances at AOL.

“We [have] a new business model where all of our properties are free on the Web, and this definitely supports that strategy,” she said in an interview before the First Look event Tuesday.

Speaking during First Look, Falco also promoted AOL’s new strategy to provide portal content and programming that will help advertisers reach customers and made a clear pitch to those advertisers to leverage AOL’s new position.

“AOL has everything an advertiser could need,” he said, counting “innovative programming,” including the ones launched Tuesday, among its assets. He said AOL reaches nine out of every 10 online users and that it also has “an enormous and loyal audience” that advertisers can reach by partnering with the company.

The new programs AOL is introducing Tuesday, along with a variety of co-producers, are:

* Ye Olde Shrek the Third Royal Tournament, a game based on the third Shrek movie, scheduled for a mid-May release, that lets online fans of the movie play 25 Shrek games over a six-week period for prizes;

* Gold Rush Goes Hollywood, a follow-up to last year’s successful AOL Gold Rush online program, where players compete for cash prizes by answering questions about pop-culture trivia;

* The Ellen DeGeneres Show Tie-in, a partnership with Telepictures Productions that lets fans of the talk show create and share stories of their hometowns online that will be featured in a recurring segment on the television show;

* Million Dollar Bill, a game featuring celebrity host Leeza Gibbons with top players competing on TV while viewers at home play along for a chance to win $1 million;

* iLand, which features former Baywatch television show star Brooke Burke and lets users compete online to win a tropical island with the finalists actually moving to a remote island to build a civilization.

AOL has already signed up Sara Lee as an initial advertiser for Ye Olde Shrek the Third Royal Tournament but is seeking sponsorship for the other programs at its First Look event.

AOL’s launch schedule for the new programs is as follows: Shrek will launch on April 26; the second Gold Rush program will launch in the third quarter; the tie-in to The Ellen DeGeneres Show will launch in the fourth quarter; Million Dollar Bill will launch early next year; and iLand will launch in the second quarter of 2008.

This story was updated on April 17, 2007