Nine years ago I wrote a column about the future of the three great subscription online services--CompuServe, Prodigy and America Online. In the age of the Internet, I argued, their business model was doomed. People would not pay for content locked up in proprietary "walled gardens" when a wealth of similar information was available free on the Net. I called the trio "dead men walking." I got only two out of three; AOL kept growing. For years, whenever I saw Steve Case, he'd gleefully bring up my premature obituary.

Clearly I underestimated Case's ability to overcome his company's challenges, and even convince a media giant that AOL could continue to defy commercial gravity. Now, of course, the Time Warner merger is viewed as a colossal disaster--and the bell is finally tolling for AOL's business model. Subscribers are fleeing like beachcombers after a shark warning--down to 22 million, from a high of 27 million. Barry Diller recently said he spurned an offer to buy AOL for $20 billion, a sum analysts reportedly say is more than twice its worth. Compare this with Yahoo's $50 billion cap, and it's no surprise that AOL's new strategy is... trying to be Yahoo. Its new plan involves tearing down the garden wall, opening up its content and building its Web into a "next-generation high-speed Web portal."

Not that AOL CEO Jon Miller is going to stop collecting fees that "pay the rent." Giving away the content won't hurry the exodus, he says, because subscribers stay mainly for ISP access, parental controls, security features and customer service. (A cynic might add the following three: 1. inertia; 2. haven't-got-broadband-yet; 3. don't-know-that-you-can-get-AIM-instant-messaging-free-even-if-you're-not-an-AOL-subscriber.) But Miller knows the future depends on huge Web audiences and the ad revenue that comes with that.

Can it be done? To hear AOL executives talk, they're almost there now. They say that their Web properties--from the site to services like MapQuest, Moviefone and AIM--draw about 110 million unique users a month, not far from the 118 million gathered by Yahoo. "AOL is already one of the few big Internet brands," says Miller.

He hopes to build on this by getting more mileage from the users of his disparate sites. For instance, AIM users are being encouraged to adopt a new Web-mail service that uses their IM names as an e-mail address. But the centerpiece of the effort is the expansion of the former backwater page to a full-fledged portal. In the next couple of weeks it will become a redesigned site that essentially gives away the goodies that previously only subscribers could access: online radio stations (including XM Satellite Radio channels), news, photo services, AOL CityGuide listings and blogs. Users can choose an opening page based on video streams, a category AOL hopes to dominate (helped by its exclusive on the upcoming "Live 8" concert). It will offer users an enhanced new Web browser (inexplicably built on Microsoft's Internet Explorer rather than the more secure Netscape/Mozilla code that AOL paid for), and it will collect feeds from one's favorite Web sites.

Competitors contend that the once mighty online service will find life tougher outside the walled garden. "It's the right strategy, but years late," says Hadi Partovi of Microsoft's MSN portal. Yahoo spokesperson Joanna Stevens says, "Being free isn't the significant factor--a long history of feedback from the public makes our services compelling and relevant." They have a point. But having once counted out AOL, I'm reluctant to do it again. Especially now that its business model is no longer a death sentence.