AOL eyes mobile ad revenue through U.K. portal

AOL launched a new mobile Web portal for the United Kingdom on Wednesday, part of an effort to reinvent itself from an Internet service provider into an advertising and content company.

AOL hopes to persuade the 6.7 million people who visit its U.K. portal from a PC each month to also view it on their mobile phone, where AOL will serve “unobtrusive” advertisements, said Ariel Eckstein, an AOL vice president, during a launch event in London.

The portal offers the same content as AOL’s main Web site, including sports, weather, and e-mail, but optimized for the smaller screen on mobile devices.

AOL tried to make the portal uncluttered to make it attractive to visitors, said Tim Hussain, head of mobile for AOL U.K. It features lots of white space and a three-tab navigation bar. Web pages returned from a search are transcoded using AOL technology to fit into a mobile browser.

But AOL officials acknowleged that the mobile Web faces big barriers. So far, not many people use their phones to access the Internet regularly, and browsing capabilities vary greatly from device to device.

The new U.K. portal can be viewed on phones with the most basic browsing capabilities, according to Hussain, including even version 1 of WAP.

AOL is competing against Google, Yahoo, and Microsoft to stake out a piece of the mobile advertising business, where revenue from the United Kingdom alone is expected to increase from around £64 million this year to £100 million next year, according to Eckstein.

Online advertising has become key to AOL’s growth since it sold off its ISP businesses in Europe, although it still depends on selling Internet access for some of its revenue in the United States. AOL calls its ad sales division “Platform A.”

The company is trying to be careful about how it displays ads. For example, it found that it’s better to put banner ads at the end of a news story rather than at the beginning, since users immediately scroll down past them, Hussain said.

The company will introduce other features to the mobile portal over the next year, such as video and premium content. People in the United Kingdom can’t yet use MyAOL, which is currently available in the United States and allows people to customize their portal, but it will come to the United Kingdom eventually.

To coordinate its mobile advertising, AOL is starting with technology from Adtech, a German company it bought in May. It plans to integrate technology from another company it acquired, Third Screen Media, into its platform by early next year,

AOL is using Google’s search engine. It isn’t displaying sponsored links yet, although that will likely change next year, said Chris Locke, head of mobile for AOL Europe.