AOL’s feed reader, which competes with Bloglines, Google Reader and other browser-based feed readers, was launched in 2005 but is little known in tech savvy crowds. It’s serviceable and has a fast load time, but it hasn’t differentiated itself from the crowd enough to get a buzz going about the product. We mentioned it in passing in November 2006, but otherwise haven’t covered it. The site has about 1.5 million active users.

They are now preparing to release a new version, however, that has some excellent features.

Google took a similar approach with their product. It was nothing to write home about when it first launched in October 2005, but the company released a new version in 2006 that was widely applauded. Today they have significant market share and the product accounts for 34% of our RSS readers - 150,000 people get TechCrunch through Google Reader.

I saw a demo of the new AOL product at their offices here in Silicon Valley. They product will be called myAOL Favorites.

It’s still fast. They’ve added support for rich media and useful Ajax tricks to make organizing feeds easier. They’ve fixed problems like lack of OPML support as well.

But what I like best about it is that they’ve integrated a new bookmarks product in with the feed reader. The folders are integrated into a single view. Feeds in one folder area in the left sidebar, bookmarks in another.

I’m looking forward to testing it myself when they’re ready to go into beta sometime in the next couple of months. I’ve posted a couple of pictures that I took during the demo below. They didn’t say I couldn’t post them, so here they are.