Aug. 2 (Bloomberg) -- Time Warner Inc., the world's largest media company, said it will give away its AOL service to high- speed Internet users, sacrificing subscriber revenue in a bet that online advertising will compensate for the loss.

New York-based Time Warner today also reported second- quarter net income of $1 billion, or 24 cents a share, as higher cable-television sales made up for customer losses at AOL.

The Internet unit will offer its AOL e-mail service and media content free to users with broadband connections, an effort by Chief Executive Officer Richard Parsons to restore sales growth. Revenue at AOL, which has been a drag on Time Warner's earnings for five years, fell 2.4 percent in the quarter as it lost 976,000 subscribers. Online advertising rose 40 percent.