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AOL sweeps 3.5m dial-up users under web biz rug

Is CEO Tim Armstrong brushing away old tech?

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AOL is folding its dial-up business into the company's web services division, in a move that boss Tim Armstrong hopes will simplify its structure.

At the height of its popularity, AOL had more than 25 million dial-up subscribers in the US. That figure has significantly fallen, forcing the ailing firm to shift its strategy over to web services and, more recently, online publishing.

Armstrong, in an interview with Bloomberg yesterday, said he was creating four new divisions for the company. He is putting in place a web services group, advertising, local services and the Huffington Post media group.

The dial-up internet access biz, which still has a not-to-be-sniffed-at subscriber base of around 3.5 million paying customers, will be slotted into the web services wing along with AOL's instant messenger product.

And here's the fun bit: Execs in that group will report directly to AOL's chief bean counter Arthur Minson.

Arguably, that move could lead to a spin-off of those assets down the line, if that wing of the business fails to bring in revenues for Armstrong.

He told Bloomberg, however, that no such plans were in the pipeline.

“We had AOL services split up between multiple groups,” said Armstrong. “We have decided that putting them into the same structure, with the same cohesion, will help us with everything from registration services all the way to the experiences we offer in mail and the home page.” ®

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