America Online began testing new features for an upcoming version of its proprietary service, including support for its own multimedia formats in its video and audio playback software, sources close to the company said.

The features were made available on Monday in the second beta release of a software upgrade tentatively called AOL 9.0 and code-named Blue Hawaii. They include a media player that adds support for a new streaming media format developed in-house by AOL's Nullsoft division. Other highlights include a new e-mail interface with a spam folder built in, and a Web page accelerator dubbed "Velocity."

AOL is expected to test features throughout the summer as it prepares the official release of the software, although details of those coming enhancements were not immediately available. Previously, AOL introduced a new "skin" feature that lets members alter the look and feel of the service and gives support for Apple Computer's QuickTime multimedia formats.


An AOL representative declined to comment on the latest beta test.

AOL 9.0 is a critical software upgrade for America Online, which has seen its grip on the dial-up Internet access business weaken in the face of broadband and discount rivals. AOL in April said its U.S. subscribers declined by 289,000 from the previous quarter, the second consecutive quarter of declines. Meanwhile, after years of denying the online advertising decline, AOL this year said it expects its online advertising revenue to plummet between 35 percent to 40 percent.

AOL's revitalization plan has focused on making the service more appealing to its users, some of whom have criticized AOL for falling behind the curve on key features such as spam filtering. The new beta also focuses on enhancing AOL's media-playback software, a strategic technology for the company as it seeks to appeal to broadband users by making high-quality multimedia content one of its core offerings.

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