AOL envisions becoming a television guide for online video and will initially showcase more than 45 video-on-demand channels featuring free and for-pay video from partners like A&E, Nickelodeon, National Lampoon and the WNBA women's basketball league.
"That's actually a good idea because it increases traffic and increases credibility and is likely to attract a lot more people, which means that AOL is in a better position to sell advertising around those video searches," says CBSNews.com technology analyst Larry Magid.
Clips not featured will still appear through AOL's video search tool, which incorporates technology from a video search startup it bought this year, Truveo Inc. Those could include free, user-contributed video at sites from YouTube Inc. and Google Inc.
A "beta" test version of the portal is scheduled to launch Friday, with the main launch expected later in August.
The move represents Dulles, Va.-based AOL's latest efforts to build on its strengths in online video as it seeks to boost traffic to its ad-supported sites and make up for declines in its subscription business for mostly dial-up access.
"When it come to text searching Google is king but as far as video, audio and other multimedia searches are concerned, it's an open playing field so that even though AOL is a little late to the party it's still possible for them to do well in terms of an online video search," says Magid.
Executives say the new portal has been in the works for more than a year, long before any serious discussions about making free even more of AOL's services, including AOL.com e-mail accounts. AOL LLC and its parent company, Time Warner Inc., plan to announce details on that Wednesday.
AOL historically has emphasized news, chat rooms and other features exclusive to paying customers. The company began the shift to free in late 2004, but only after Google and Yahoo Inc. had a stronghold online.
"It's fair to say we came to market late with a portal," said Kevin Conroy, executive vice president for AOL. "We are focusing here on what's next. We believe we're hitting the market at exactly the right time to take a leadership role in the next-generation portal experience, meaning a video portal."
Earlier this year, AOL won a broadband Emmy for last July's "Live 8" concert special — delivered in seven separate feeds, all without the meltdowns common with early online video events.
AOL later launched with Warner Bros., also a Time Warner unit, the "In2TV" broadband network featuring free viewing of dozens of old television shows like "Welcome Back Kotter," "Sisters" and "Growing Pains."
But AOL faces immense competition.
Apple Computer Inc.'s iTunes Music Store and Google Video offer clips for sale, generally $1.99 for an episode of a television show. YouTube, meanwhile, has become the leader in user-generated video and has at least a year's head start on AOL's own video-sharing site, UnCut Video.
AOL executives say the company won't try to steer AOLVideo.com visitors away from rival offerings, figuring it's better to create a user-friendly experience that would grow the market for everyone, including AOL.
"We want to increase awareness, usage," said Fred McIntyre, vice president for AOL Video. "We want this to be the place people come to start when they think video."