AOL is also offering 5 gigabytes of free online storage through its Xdrive
unit, more than several times the amount of free storage available at
Yahoo! Briefcase, Apple iDisk and other sites that are usually
limited to 1GB of free storage at most.
Alongside these changes, AOL also launched a vast video portal. Some
programs, like "The Chappelle Show" and "SpongeBob
SquarePants," cost $1.99 to download. Others, such as "The Jamie
Foxx Show," are free.
While few other companies are actually charging to access video
content, AOL, backed by the sizable and video library of its parent,
could quickly become a formidable competitor to companies such as Yahoo!,
Google and even upstart
YouTube -- not to mention Apple's
iTunes, which is hoping to become the clearinghouse of choice for
selling video programming on the Web.
More interesting, perhaps, AOL's push toward free content and
services may spark another round of companies offering even more content
and services free. During the Web's short history, it has seen a few
cycles in which periods of innovation sputter and give way to times
when many of those innovations are offered at the cheapest price
possible, if not free, where they can be supported through ad revenue.
So far, 2006 has been a year in which companies have focused more on
copying and improving on each other's earlier innovations than on
rolling out new, enticing products and services. At the same time,
Internet advertising revenue has continued to grow at a robust rate -- up
38% in the 12 months through March -- setting up conditions for a free-for-all that could present problems to companies counting on premium online services.
Kevin Kelleher
RSS
