AOL seeks growth in shift from mass site to niches

That forced AOL to change its mission. Instead of locking its news, music videos and other features behind a manicured wall for paying subscribers, AOL began giving away almost everything free through ad-supported sites.

Initially, it tried luring current and former paying subscribers to its free sites. But with ad revenue stagnant, the company is seeking new ways to boost traffic.

"If all you're doing is keeping the people you have, that's not a growing audience," Wilson said.

There are some early signs of success.

According to traffic measurements by comScore Inc., AOL has had seven consecutive months of year-over-year growth in both unique visitors and page views.

For the entire first quarter, page views for AOL's content-focused sites, which exclude e-mail, instant messaging and the general AOL.com portal, grew 22 percent to 9.5 billion compared with the same period in 2007. The content sites had 55 million visitors in April, up 12 percent.

Jack Flanagan, an executive vice president at comScore, said niche sites aren't solely responsible for AOL's growth but have quickly attracted sizable audiences.

The traffic growth, however, hasn't translated to ad dollars, which were flat in the first quarter. In fact, non-search ads on AOL sites declined 18 percent compared with the same period in 2007. The big growth has been in ads that AOL brokers for third-party sites — such as the blogs vying for the same eyeballs as AOL's new niche sites.

Executives have been blunt: AOL made key mistakes integrating $1 billion worth of corporate acquisitions into a single "Platform-A" advertising unit. Its sales forces weren't aligned, and in some cases they were effectively undercutting one another on prices.

With new management, reorganized sales teams and new self-service tools for advertisers, AOL hopes to grow ad revenues on its sites again. The niche sites will be an important part of the mix, said Lynda Clarizio, president of Platform-A.