AOL Mobile maintains a streamlined and focused strategy, far from other wireless data flights of fancy.

From the creators of “You've got mail,” there's now “You've got mobile mail.” AOL Mobile's immediate goal is simple: Mobilize current e-mail and instant-messaging content used by AOL's (www.aol.com) 30 million customers.

Clearly, this is the first step for AOL Mobile in imprinting the mother company's corporate mission: “To become the world's most respected and valued company by connecting, informing and entertaining people everywhere in innovative ways that will enrich their lives.”

By first connecting current members, Lisa Hook, AOL Mobile president, hopes eventually to carve out a significant piece of business that will lead to informing and entertaining mobile members as well.

Current AOL members spend 60 to 70 minutes a day online.

“That's almost 23 hours a day they aren't online, which is a huge upside opportunity to talk to our members more if we can reach them in appropriate places,” Hook said.

Further, company statistics reveal that 43% of its members access AOL when they are away from their home PCs.

“What is the latent demand on top of that 43% for access to AOL when you are away from home? It's significantly higher,” Hook asked and answered. “From a business point of view, there's an opportunity to reach people more than the time they're spending with us on their desktop PC, and from a consumer point of view, we know they want access to AOL when they're away from home.”

And the most logical way to get it to them, according to Hook, is to partner with mobile carriers. That's what AOL Mobile has been doing over the past year.

It has signed agreements with AT&T Wireless (www.attws.com), Sprint PCS (www.sprint.com) and Voice-Stream (www.voicestream.com). In general, the agreements provide members with access to AOL's most popular services, such as e-mail, and features through Internet-ready handsets. Subscribers also can instant message other AOL members.

However, earlier this summer, AOL Mobile expanded its relationship with AT&T Wireless beyond simple messaging. The two companies are developing a new mobile service that customizes and co-brands AOL's desktop experience. It will launch with the introduction of AT&T Wireless' GSM/GPRS network later this year.

Prior to service rollout, AOL members and AT&T Wireless customers will be able to select a special version of the Digital PocketNet phone that will have access to the existing AOL Mobile service, including e-mail, instant messages, stock quotes, weather, sports scores, news shopping, travel and entertainment.

“With AT&T, we have a relationship to create a co-branded product that we hope will really transform mobile data in the United States,” Hook said. “It's going to be on their GPRS network, which means we will be always-on, providing a tremendous difference from the circuit-switched environment.”

Aborted Take-off

Hook looks at future network capabilities and believes that after the initial fussing and fumbling, wireless data's time might be arriving. She admits that all of the industries involved in delivering wireless data thus far “oversold the proposition by calling it the wireless Internet.”

“Mistake No. 1 was in positioning,” Hook said.

That's where focus-group work with AOL members comes in handy.

“If we hand a phone to someone and say, ‘Hey, hit AOL on your phone; it's the wireless Internet’ and let them play around, they are incredibly unhappy, and they would never go back. If instead we say, ‘You can get your e-mail on this phone,’ and sell the value proposition as specific features without any notion of browsing the Internet, the customer satisfaction is extremely high.”

Beyond focus groups, Hook heeds the lessons of other carriers, ISPs and mobilized solutions. She pinpoints the Japanese experience as an important illustration of the network driving usage. The always-on functionality that comes with GPRS or 1XRTT eliminates the need for subscribers to sit and wait for a circuit-switched connection to be established.

“With always-on, one click and you're there,” Hook said. “It allows people to dip in and dip out for these quick 15-second, 30-second applications that have really been the driver for the i-mode guys.”

Membership Drive

AOL Mobile's approach is unique because most companies chasing wireless data see the enterprise as the early adopters, heavy users and ultimately the keys to success. However, Hook sees the consumer as the demographic to pursue.

“The high-end corporate market is already fairly competitive,” Hook says. “There are a number of folks there. We can be part of that, but we are really focused on very broad mass market.”

Hooks points to the nearly 30 million household accounts, which currently represent approximately 58 million subscribers.

“If I can satisfy even a small percentage of that 58 million, then I have a fairly big business opportunity.”

Undoubtedly, the consumer market is a tougher nut to crack. On average, the corporate-enterprise customer usually is more electronically savvy and adaptive of new technologies and services. The consumer mass market, on the other hand, wants innovation but needs simplicity. That is where the AT&T Wireless relationship will bear fruit if all goes according to plan. The goal is to make it as easy for members to navigate wirelessly as it is to navigate on their home PCs.

“We're hoping we'll be able to define the user interface on the device so simply and so cleanly that it will be intuitive for people to click on their e-mail, click on their applications, reprogram their phones,” Hook said. “That's a huge effort right now.”

Once the company has succeeded in connecting its members wirelessly, it will begin its mission work of entertaining and informing. Thanks to the merger with Time Warner, AOL Mobile now has a huge library of copyrighted material to draw upon. For entertainment, it owns a huge arsenal in the realm of ring tones, games and cartoon characters.

According to Hook, these small add-on applications that can be downloaded onto phones are tremendous value-drivers for the carrier partners. It's also a way to encourage members to start relating to and using their phones differently than they have in the past. The fact that those applications are phenomenally popular in Europe offers hope.

“I do think there will be a fad — but we feel pretty lucky in that entertainment is one of our core businesses, so we can both fulfill existing desires as well as define the next fad.”

Economic Weakness

Another critical condition of the consumer market is economically driven. Consumer businesses usually thrive as long as consumers are spending money. What happens if consumer confidence drops precipitously, and consumers begin tightening their belts? So far Hook hasn't noticed any consumer weakness.

“We blow through our next million customers with increasing speed these days,” Hook said. “What's been happening as a result of the general economic downturn is that the free ISPs are going out of business because they never had a business model.”

With fewer ISP competitors, there are more consumers to spread around. That combined with carrier successes makes Hook's day.

“If you look at our carrier partners and those that have released their quarters, these guys are still adding subscribers at numbers above what Wall Street expected them to do,” Hook said. “So amazingly, the economy seems to have no effect on cellular membership increases.”

“I am huge fan of these guys. They had a very tough industry with incredible capital requirements going through massive network changes and have still been able to add customers at these increasing paces. It's phenomenal.”

Where the Rubber Meets the Road

It's difficult to measure whether this strategy has been successful for AOL Mobile to date. The company will not disclose the terms of its revenue-sharing agreements or the number of members who have gone mobile via their carrier partners. Hook only will say that the number of unique visitors and the number of instant messages sent daily is large and growing.

“For our carrier partners, that creates data traffic and data transport revenues that weren't previously there,” Hook said. “For the carriers, it's both a revenue opportunity as well as, we hope, an opportunity to add new customers and retain those that they have.”

With the luxury of a powerful brand, the reach through major wireless carriers and the plan to mobilize content and offerings, AOL Mobile seems to have a handle on its course. Implementation and follow-through of wireless strategies have been the Achilles Heel of many other companies that attempted to mobilize content.

According to Hook, the top three challenges for her team in the coming 12 months are “execution, execution, execution.” Undoubtedly, it's the execution that will determine whether AOL Mobile experiences a bumpy ride or smooth sailing.

Mobile Enumerator

Every day, AOL's 30 million members send up to 650 million instant messages and 225 million e-mails. AOL Mobile hopes to capitalize on these numbers by expanding the medium's role using the AOL Mobile Communicator.

At press time, AOL released version 1.1 of its software for the device, improving its 2-way messaging capabilities. The software offers faster display of e-mail messages, time and date stamps on instant messages, more customization of “away notices,” easier navigation and better indication of low coverage areas.

The company also slashed the price of its handset from more than $300 to $99.95. It increased its monthly service plan from $19.95 to $29.95 a month for unlimited use.