AOL to launch free Net access in UK
Leveraging Netscape brand -- but will newbies recognise it?
AOL today finally coughed to planning a free Internet access service, to be called Netscape Online and launched in the middle of August. The service, which was to have been announced last month until scooped by German daily Der Spiegel will offer its own range of content through a Netcenter-style portal. AOL said the service will complement both AOL and CompuServe by targetting the "newly emerging 'value' market". Pure spin, of course, since all the evidence suggests that Freeserve, the free ISP whose launch prompted AOL's latest move, attracts all types of user, from the experienced surfer to the novice. It's interesting that the company chose Netscape as the brand. Clearly, AOL has needed to find something for its acquisition to do, apart from continue to build browsers, and at last we have it: it's just the brand name AOL wants. As the company says, Netscape Online will offer "pure, high performance Internet access backed by the power of the Netscape brand". Hang on a minute, though, how many "newly emerging" Internet users will really appreciate "the power" of the Netscape brand? Not too many, we suspect. Still, when AOL starts mailing out millions of Netscape Online CDs this summer, perhaps that won't matter too much. What will matter is to what extent the service will compete with Freeserve and/or cannibalise the existing AOL and CompuServe user base. In detailing Netscape Online, AOL Europe's president and CEO, Andreas Schmidt, said AOL will continue to provide premium content for mainstream users and the CompuSpend will soon be refocused (again) on professional and "emerging" market sectors. But with the widespread interest in free Net access from all kinds of user, it's hard not to imagine both services will continue to lose users to the free ISPs. True, Freeserve's churn rate seems rather high, but that appears to be a sign of users moving to other free ISPs rather than to the likes of AOL and CompuServe. Many will come over to Netscape Online, but there's no reason to suppose they'll stay there any longer than they stayed at Freeserve, though they'll undoubtedly see many, many plugs for AOL and CompuServe. With Internet access expanding at such a rate, that may not matter either. All three services "have the critical mass necessary to generate substantial advertising and commerce revenues", said Schmidt. So AOL presumably figures what it loses on subscriptions it will make back in advertising. Unless, of course, advertisers baulk at Netscape Online's churn. ®
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