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TESS VIGELAND: Time Warner's AOL is giving itself a service upgrade that some are calling a major transformation. It's consolidating all its Web 'zines under a single unit. The new strategy could lead to more advertising dollars.

Marketplace's Janet Babin reports from the Innovations Desk at North Carolina Public Radio.

JANET BABIN: For some, the name AOL still evokes the sound of dialup Internet. The link that got you to that series of tubes and kept you there, inside AOL's walled Internet garden.

That strategy's eroded over the past few years. Now, AOL feeds content across dozens of sites,
reaching 70 million users.

Charlene Li at The Altimeter Group says with its new unit called MediaGlow, AOL is tearing down the walled garden for good, a sign of how much we've matured online.

Charlene Li: And we're sophisticated now, that we don't have to rely on one company, one place, one media site to provide all of that for us.

The change could indirectly increase ad revenue that many analysts say has been in decline. Now that AOL centrally supports its niche sites, Li says advertisers can better target their audience:

Li: Instead of selling generic advertising that anybody could sell, you're gonna sell a unique audience.

AOL says it will develop 30 new websites this year, despite losses last year due to falling ad revenue.

I'm Janet Babin for Marketplace.