America Online shifts from advertising revenue strategy

NEW YORK - AOL Time Warner's strategy for reviving its online business is based around attracting new subscribers rather than pushing up advertising revenues, chairman Steve Case has told investors.

At a meeting with analysts, Case -- who is clinging on to his role at the media giant by his fingertips -- has said that America Online would lift revenues by attracting new users, upping charges and offering premium services to encourage users to spend more money.

"Advertising is an important component of the medium. But I don't believe advertising is the primary opportunity for AOL," Case said at the Goldman Sachs media conference in New York.

AOL Time Warner was one of the companies rocked by accounting scandals this year, when it emerged that revenue booked as advertising income for America Online was not, in fact, generated from ad sales.

Case is facing the prospect that AOL Time Warner will be carrying forth his plans for the company without him.

There is much pressure from investors, and reportedly even from CNN founder Ted Turner, for Case to step down as the company struggles to make its two-year-old and much-hyped merger of new and old media work. Case has already lost one of his closest supporters, following the departure of AOL chief Robert Pittman, who paid the price for AOL's poor performance.

At the media conference yesterday, Case avoided commenting on his future with the company.

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