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June 4, 1997updated 05 Sep 2016 12:13pm

AOL, BACK IN THE HUNT FOR NEW CUSTOMERS, EXPANDS NETWORK

By CBR Staff Writer

America Online Inc is ready to grow again, and has been expanding and upgrading the network which was overloaded to the breaking point in December and January, leading to legal action, fines and a moratorium on soliciting new subscribers. The Dulles, Virginia company earmarked $350m in January to improve its network and install about 150,000 new modems with the goal of increasing the capacity for daily member sessions to 16 million by early summer (CI No 3,081). Since January 1, AOL says it has added 100,000 new modems and increased it capacity for daily sessions by 3 million to 13 million. The capacity for simultaneous users at peak times has been upped 47% to 360,000. Also, new access lines have been added in areas that were plagued by busy signals after the introduction of flat-rate pricing last December. As part of the settlement of class-action suits stemming from the tie-ups the subscriber boom caused, AOL was not allowed to advertise or solicit new subscribers during the month of February but, a spokesperson says, the company waited until May to resume marketing activities as it was committed to improving service for existing members first. The lack of marketing activity no doubt helped AOL to post a third-quarter profit (CI No 3,154) in spite of charges related to the lawsuits and analysts’ expectations of a loss of $0.07. The company spent a hefty $146.8m on advertising last year and this year’s advertising bill is projected at around $120m. The next version of AOL software, code-named Casablanca, will be ready to preview at the end of the summer and should be available as AOL 4.0 in October. It will come with enhanced multimedia capabilities, including AOL’s push technology, called Driveway, which gathers information from the internet while users are logged-off.

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