AOL Relying On Mobile To Recover Ground Lost On Online?

AOL (NYSE: TWX) has long been tweaking online properties to make them more usable on mobile — recent developments have included a revamp of its mobile search, making it more mobile-keypad friendly and integrating results from the likes of MapQuest, City Guide and Moviefone. What’s quite interesting is that AOL’s strategy of mobilising all these online brands really seems to be paying off, says a rather glowing article in BusinessWeek. Hitwise stats reveal that AOL’s mobile internet site gets more US traffic than Google’s mobile internet site and double that of MSN — although it’s fair to bet that a lot of mobile Google (NSDQ: GOOG) users have the search integrated into their handsets. And Telephia says people spend more time with AOL than they do with Yahoo (NSDQ: YHOO), a boost to AOL’s new business model, which places a heavy emphasis on growing advertising revenue. David Gill, Telephia analyst: “Their audience is highly engaged, and advertisers like that.”

It’s not a new idea but it’s worth repeating for others looking at mobile content: the brands that have built up strong reputations in other media for providing information seem to be the most natural places for people to go on mobile phones for information, particularly in these early days where most mobile-only brands have yet to pick up critical mass. Ironically, AOL is not doing nearly as well in its much more core business of online traffic and ad sales.

On the horizon: AOL is planning to release a mobile portal integrating all of its online assets; currently users access their mail other services through separate sites. Like its rivals, the company also wants to pre-load software and links to its mobile services directly onto phones; today most of its quick links are forged through deals with mobile operators and their portals. BW reports that AOL is already in talks with HTC for this (AOL neither confirms nor denies the rumour).

The article highlights the role that AOL’s rivals in the Internet world may play in growing AOL’s ad revenues, given the amount of traffic AOL seems to be generating. Google, a 5 percent owner of AOL, and MSN could both feasibly use AOL inventory as an outlet for their own mobile ad sales. Both “will be writing huge checks to get that deal done [soon],” speculates Matthew Booth, an analyst with the Kelsey Group.

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