Under the deal, Time Warner would share subscriber revenues with AOL, which would share revenues from its advertising, search, commerce and premium services. Both companies are subsidiaries of media giant Time Warner Inc.
"This is a revenue-share model that's totally different from what we've done before with Time Warner Cable," a spokeswoman for AOL said.
Before the latest partnership, Time Warner Cable subscribers could get AOL for $14.95 a month, under the latter company's "Bring-Your-Own-Access" plan announced last year for broadband subscribers. Under the new deal, Time Warner subscribers would get AOL at no additional charge.
The new offering is expected to roll out across Time Warner Cable over the next several months.
Under the deal, Time Warner would manage the subscription billing and customer care for its services, and AOL would manage and sell advertising and search inventory for the new offering and Road Runner.com, which is Time Warner Cable's web site for broadband subscribers. Road Runner is the brand of Time Warner's high-speed service.
AOL and Time Warner plan to work together in getting subscribers to switch to each other's services. AOL will provide a customized version of its portal, which will include all its free and premium services; and it will bring 3 million dial-up subscribers who may one day look for a high-speed connection.
Besides its traditional subscriber-based service, AOL has launched the AOL.com portal, which competes with entertainment sites from Yahoo Inc. and Microsoft Corp. In moving beyond a paid-subscription model, AOL is aggressively looking to expand its offerings for advertisers.
Earlier this month, AOL released a beefed-up version of its search engine on its paid service and its portal, and announced upcoming features to attract advertisers. The features included a pay-per-call service that would list an advertiser with a telephone number in a section separate from the general search results. Site visitors who call the number would be patched to the advertiser, which would be charged based on the number of calls.