AOL, Road Runner Ink Cable Deal

America Online and Time Warner Cable Monday announced a deal that will bring a custom version of the AOL service to Road Runner broadband users. As part of the deal, the new Road Runner homepage will optionally be the AOL.com portal, and AOL will manage the search and advertising opportunities for the new service.

"This agreement provides another way for America Online to extend the subscriber lifetime of AOL dial-up members who want to move to broadband," said AOL CEO Jonathan F. Miller. "This partnership will also make it easier to reach a new pool of broadband consumers and monetize an even bigger broadband audience through advertising, search, commerce and select premium services."

AOL has been far behind MSN in conversion rates of upgrading dial-up users to broadband, as it had no clear way, or partners to do so. Also, the company has been seeing a steady decline in members over the past year due to broadband. A partnership with Time Warner Cable could help to even the score, and possibly slow AOL's subscriber loss in areas that Road Runner serves.

"Time Warner Cable should accelerate its acquisition of high-speed data subscribers, while AOL should enhance the lifetime value of its member base and maximize its revenues from online advertising, search, commerce and premium services." Don Logan, Chairman of Time Warner's Media & Communications Group, said.

The service should roll out to all Road Runner subscribers over the next few months. Pricing will vary according to connectivity speed, and the companies will test out several price points in the initial markets. Both AOL and Time Warner Cable will share revenue generated from the partnership.