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TheStreet Open House

AOL Blogfest

"Brands want to be there,'' says Ari Paparo, vice president of rich media for DoubleClick, an online advertising company that counts AOL as a client. "There is no doubt it.''

Advertisers are still leery about blogs and other so-called user-generated content since their quality can be poor. AOL has tried to address these concerns by having its bloggers adhere to ethical standards and have their posts subject to editing.

Still, AOL has seen some success. Its TMZ.com gossip site, which started last year, was first to report about Mel Gibson's anti-Semitic tirade following his drunk driving arrest. Wall Street, which has long seen AOL as a drag on Time Warner's stock, is hoping that some of that luck will rub off on AOL's other blogs.

The online journals may help AOL lure in more users as it reinvents itself from a subscription business to one dependent on advertising, a move that analysts and investors say is overdue. Blogs alone aren't going to be enough to lure more users to AOL from rival sites, including Google (GOOG), Yahoo! (YHOO) and Microsoft's (MSFT) MSN. Media habits are difficult to change once they've been established.

Time Warner, parent of CNN and Warner Bros., expects to save $1 billion through next year as it quits marketing AOL's fading dial-up access. It's also cutting 5,000 jobs at the unit, which showed an anemic 2% revenue gain in the second quarter.

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