AOL LAUNCHES 8.0 AND BANS POP-UP AD SALES

Estimates Cost of Pop-Up Elimination At $30 Million

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NEW YORK (AdAge.com) -- As part of today's official launch of a new 8.0 software, AOL Time Warner's America Online announced that effective immediately it was banning sales of pop-up ads to third-party marketers.

Newly installed AOL CEO Jon Miller told a packed house at Lincoln Center's Avery Fisher Hall here that feedback from AOL's 35 million worldwide subscribers persuaded the company to cease using pop-ups except for some of its own internal promotions.

Contracts to end
Mr. Miller said pop-ups would continue to appear throughout the service for as long as it takes for all current third-party pop-up ad contracts to run out. He estimated that the move to eliminate such ads would reduce 2003 profits by $30 million on an EBITDA basis. (EBITDA is an accounting concept that refers to division profits before the deduction of various corporate expenses -- earnings before interest, taxes, depreciation and amortization.) AOL earnings on an EBITDA basis for the current year's first six months were $906 million.

Mr. Miller said the online

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service would shift its ad sales efforts to emphasize "contextual advertising," which he said would include sponsorships and other forms of marketing promotions.

1.7 million downloads
The company reported that since midnight, when its version 8.0 became available online to members, some 1.7 million downloads had been logged. The service has 26 million subscribers in the U.S.

Hosted by AOL Time Warner Chairman Steve Case, the day's glitzy publicity event featured a variety of entertainers as well as a surprise visit from AOL Time Warner Vice Chairman Ted Turner. "Watch out Bill Gates and Microsoft, here we come," Mr. Turner told the crowd.

However, Mr. Case was not in the room when Mr. Turner made his appearance. Instead, he was introduced by AOL Time Warner CEO Richard Parsons.

Advocating Case's ouster
Mr. Turner has been a leading advocate in a lobbying effort to have Mr. Case ousted.

Microsoft Corp.'s MSN will lauch its new 8.0 software and a $300 million marketing campaign Oct. 24.

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