AOL to go head to head against Microsoft WebTV

America Online (AOL) is set to do battle with Microsoft Web TV as it launches its own television based Internet service.

Dubbed AOLTV the service will be transmitted through set top boxes produced by Philips Electronics and Hughes Electronics DirectTV satellite.

The move is part of its aggressive 'AOLanywhere' strategy to take its traditionally PC based service to hand held devices, mobile phones and directly into consumers lounges via the TV.

AOL declined to comment on when it plans to send AOLTV live or how much it will charge for the service but sources close to the company claim it will be rolled out later this year.

By getting consumers online through their TVs AOL is hoping to keep people connected for longer, which would enable it to increase its advertising rates, say analysts.

Digital video recording capabilities for the AOLTV service will be delivered by Liberate and Tivo. Tivo will offer interactive TVservices on an open Linux platform.