AOL drops pop-up ads

Wednesday, October 16th 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ Pop-up advertising from outside merchants will disappear from America Online as the company attempts to regain the affections of its 35 million subscribers by minimizing the annoying screens.

The announcement Tuesday that the company will stop selling third-party ads coincides with the launch of the latest version of AOL software and is in line with other industry moves to shield consumers from pop-up ads.

The change is intended as a mark of AOL's ``back to basics'' return to focusing on its customers, AOL Chairman CEO Jon Miller said.

``Pop-up ads aren't the way we're going to go,'' Miller said, adding that AOL will continue to run pop-ups and alerts to advertise its own features and services, which include the media and entertainment products of Time Warner.

Also, ads covered by existing contracts will continue for the duration of the contracts and, unlike some of its competitors, AOL is not offering its customers a way to block pop-up ads when they venture beyond AOL pages to visit Internet sites not controlled by AOL.

Earthlink, for example, the No. 3 Internet service provider behind AOL and Microsoft, recently offered its subscribers software intended to enable them to block unwanted pop-up ads from any site they visit.

The AOL decision was fueled by complaints from subscribers who found the ads, which may ``pop up'' onto a user's computer screen at any time, an annoying interference with their online experience, according to a corporate statement posted on the company's Web site.

AOL has projected that it would earn about $30 million from pop-up ads in 2003.

``Across the industry, pop-up ads are seen as a nuisance. If you look at user satisfaction surveys, one of the biggest headaches is pop-up ads,'' said Youssef Squali, an analyst with First Albany Corp. ``This is a change of heart for AOL.''

The latest version of AOL software, AOL 8.0, was also announced Tuesday.

New features include ``MatchChat,'' which lets users locate real-time discussion in their areas of interest, and a host of new e-mail functions.

Microsoft Corp. launched a $300 million advertising campaign to announce its forthcoming MSN 8.0 Internet access software. MSN claims 9 million subscribers.

The new software focuses on improving filtering of ``spam,'' or junk e-mail, and beefs up its e-mail program, which analysts say it one of Microsoft's advantages over AOL.

David Card, a senior analyst with Jupiter Research, says he doubts either company's latest version will significantly change the competitive landscape, but others say AOL is vulnerable and Microsoft, with more consumer-focused how-to content and services, can make some inroads.