On Advertising.com, subscription services and the long-awaited demise of Rainman.

In part one, AOL chairman and CEO Jonathan Miller talked about the company's renewed vigor, and its plans to get its "fair share" of ad revenues before capturing new market share. Miller will be the opening keynoter at the iMedia Brand Summit in September. This is part two of my conversation with him about the state of the industry, today's AOL and what's next.

Watters: How does Advertising.com and that integration fit into [growing your share]? What do you hope it will do for you?

Miller: Let's talk about the picture of advertising. Online it's really in two broad parts, which is brand advertising or CPM driven, and pay for performance, which is search. What Advertising.com does is another version of pay-for-performance advertising. In this case, it's really built around customer acquisition.

The reasons we liked it are: one, at the end of the day, people are advertising to get customers. That's what you do. That's why you advertise. So it goes to the heart of that. So that was one good thing.

The second is that they could take a lot of inventory that we are under-utilizing today, and they could make our utilization of that inventory much better -- optimize it, as they say. So that would have an immediate lift to our position.

The third is that they operate well beyond the AOL service. By definition, they have a true third-party business. So we get to participate in this form and the growth of performance-based advertising Webwide.

So, let me contrast that to our position in search. In search, as you may know, we have a deal with Google to provide both algorithmic search and sponsored links. It's fine. It's a great deal. But the economics of it to us only relate to the search traffic that's on AOL, by definition.

What Yahoo! and Google do is really participate in the growth and search throughout the Web. So with Advertising.com, we can do that in the area that they are engaged in, the customer acquisition area. So it allows us to participate in the overall growth of that sector Webwise.

Watters: The Netscape Network properties used to be thrown in as kind of an add-on in deals. Has the way AOL is selling those properties changed? What are some of the benefits to marketers in that, and are you still selling them as a packaged deal with AOL?

Miller:  Good question. I think it's important to where we're going that the actual name of the department that does the selling is the AOL Media Networks. So the concept that we have is to sell across our properties, which are both our owned properties under AOL, Inc. -- which include the AOL brand and Netscape brand, for example -- but also other properties we represent, such as a slew of Time, Inc., and some of the Turner stuff.

Part of our belief is that, in all honesty, none of those by themselves will equal the draw of, say, Yahoo! or maybe MSN or Microsoft generally. But the collection of properties and being able to sell across it, we believe we can maintain great if not the greatest scale, and if you add Advertising.com in there, again, if we have that kind of reach.

So one is really a strategy to sell across a whole network of stuff, and then to do that well, we've been emphasizing much more and will do as we go forward from the kind of multibrand aspect of it. So it's actually an ambitious thing.

Watters: What number do you use to describe the size of that network? When I was at Netscape, we used a number somewhere in the neighborhood of 70 million by the time you take everybody's registered users.

Miller: It's definitely more than that. I hate those kinds of things. Everybody can count whichever way they want to count and come up with whatever number they want. Let me put it this way. The number that people give me around here is 110, but in all honesty, I don't like any of those numbers, neither mine nor our competitions'.

Watters: We should talk about the subscription services -- your "Superstore on the Web."

Miller: In that area, when I arrived, we really had essentially one product, which was a narrow-band product for just under $24 a month, and we've been in a process of broadening out the product line to meet the market. As the market has evolved, we need products to evolve with the market. So we introduced broadband products and now premium services, such as anti-virus and some voice services.

So it's a couple of steps, in my mind, down a journey that is a long journey of becoming a truly multiproduct company that has products to serve a variety of segments to the audience. The way I would think about it and recommend thinking about it is it's the equivalent of going from Ford, when it was just a Model-T company, to General Motors. We want to go from being Ford to General Motors. So that's the idea behind the subscription superstore.

Watters: AOL has always been a leader in integrated marketing -- it grew on direct mail, TV bus cards, print and those ubiquitous keywords. What can other brands learn from that, and what have people not yet recognized about AOL that you want the brand marketers to see and know?

Miller: I think that the things that you point to -- and the stats bear this out in terms of time spent and so on -- really, we have an overall intensity to the interaction that we have with the audience and our users. They tend to spend more time on the service than our rival services and do more things. So there is just a level of engagement that we think is different about our service versus the others out there, and it plays out in lots of different ways.

If you looked at the recent media metrics results on a channel-by-channel basis, they're startled at frankly how well we're doing, considering that we don't address the entirety of the Web audience. So like No. 1 in personal finance, two in news, and we've just kind of moved up in all these areas.

In fact, even though our narrow band base is shrinking and will continue to shrink, the level of engagement is actually going up. First of all, it's gratifying. Second of all, it's very important because it creates a better marketing environment.

Watters: It sounds like the move to full-HTML publishing from the proprietary Rainman system is on schedule for the end of the year?

Miller: Remarkably, it is. I believe the number is 82 subsystems that are being converted one by one, and it seems to actually be occurring according to plan, which if everything in life went that way, it would be just fine. But that's one that's really going ahead, and it's obviously key to our ability to commoditize.

In closing I asked him if there would be a public funeral for Rainman, which was a proprietary publishing system that drove people inside and outside the company crazy. He laughed, and said he'd look into it.

But seriously, what does all this say about where AOL is? It tells me (and full disclosure -- I was at Netscape and AOL during the Pittman years), that the company is back on track and doing what it does best: re-focused on the member experience, creating and sustaining communities of users across an wide range of interests, and delivering massive, engaged audiences to marketers.