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A reinvented AOL is luring big-time suitors

NEW YORK -- A year ago, America Online Inc. was seen as an ailing dinosaur of the dial-up era, its Internet access business fading fast. Now that it's tapping into the online advertising boom by opening up its content to anyone who wants it, AOL is a hot property being courted by powerhouse suitors including Microsoft Corp., Google Inc., and Comcast Corp.

Google and Comcast are said to be in talks about taking a joint stake in AOL for its Web portal. That follows talks between Microsoft and AOL parent Time Warner Inc. about a possible partnership with the MSN online business.

Credit AOL's decision to abandon its strategy of exclusivity and unleash its rich array of offerings -- concerts, news, sports, and e-mail -- to the World Wide Web for free, a model Yahoo Inc. drove to become the Web's top brand.

AOL's new strategy lets it tap the growing Internet advertising market, which jumped 26 percent to a record $5.8 billion for the first half of the year. And that's only a fraction of the overall ad industry, meaning there's plenty of room to grow.

Time Warner chief executive Dick Parsons told an investor conference last month that accelerating AOL's transformation into an ad-driven business was a top priority, the best way to add value to Time Warner's slumping share price.

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