Time Warner on Wednesday announced it will give away e-mail, software and other Web services for free to high-speed Internet users in a bid to boost online advertising sales.

"This is the next logical step for AOL to capitalize further on the explosive rise in broadband usage and online advertising," said Time Warner President and Chief Operating Officer Jeff Bewkes.

The AOL transition is set to be completed in early September, and the services to be offered for free include e-mail, instant messaging, a local phone number with unlimited incoming calls as well as safety and security features. AOL said it would continue to offer dial-up Internet access but will not aggressively market the service.

The move will further transform AOL, the country's largest Internet service provider--primarily through dial-up--into a Yahoo-style media portal specializing in offering free content and communications. For several years now, AOL has been moving toward focusing its resources on the Web in an effort to staunch losses from subscriber defections and take advantage of the lucrative online-advertising market.

This isn't the first time AOL has tried to reinvent itself to keep up with the Googles and Yahoos of the world.

"AOL has gone through at least four revisions of how it was going to evolve as people connect (to the Internet) via broadband instead of via dial-up," said Joe Laszlo of JupiterResearch.

"AOL's core strategy is still dial-up...but (dial up) is clearly waning and they do need to find a way to stay relevant in the broadband world," he said. "Longer term, the AOL strategy is definitely one of being a media company that maybe makes a little money on the side off subscription revenues."

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