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AOL mulls sale of European access business

Maybe, maybe not...

The smart choice: opportunity from uncertainty

AOL may be prepared to flog the internet access part of its business in Europe, but insists its whole operation is not up for sale.

Comments made by chief exec Jonathan Miller yesterday have helped shed light on AOL's future strategy in Europe following the review of its business by bankers Citigroup.

Speaking yesterday, Miller said the firm "needs to be on the web in Europe" and that the business had "a very good future". He added that the "goal is to extend our presence on the web in concert with any potential partners" - a clear signal that the firm sees advertising and paid-for content as a key revenue stream for the future.

By beefing up its web portal, packing it with content (some free, some fee based), and driving people to the site, the theory is that it becomes a magnet for advertisers, driving up revenue.

Miller said the company "may or may not stay in" the access side of the business. That's because falling prices and bundled offerings that include "free" broadband mean the telecoms side is becoming increasingly competitive.

AOL's "maybe, maybe not" approach signals just how tough it is out there - especially with the likes of Carphone, Sky, NTL (Virgin) and BT in the frame.

It could flog it to the highest bidder. Or it could hook up with a partner prepared to invest in the access/telecoms side of the business - Vodafone and O2 have already been mentioned. Then again, with more than a million broadband subscribers in the UK already, AOL could decide to hang on and wait and see. ®

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