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AOL strikes my enemy's enemy deal with Kingfisher

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AOL Europe has secured an exclusive distribution deal for Netscape Online sign up CDs with Kingfisher, as we reported yesterday. In return, Kingfisher will become "the exclusive retailer for electrical and home improvement products" for AOL Europe and Netscape Online, the brand new free ISP. It's a 'my enemy's enemy is my friend' kind of deal -- Dixon's Freeserve represents the biggest threat to AOL in Europe, while Kingfisher and Dixons are arch-rivals on the electrical retailing side. Our guess is that Kingfisher negotiated a very keen price for its dual anchor tenancies. In the rest of Europe, the retail giant building its own Freeserve knock-off (down even to the name -- Libertysurf), in cahoots with French gazillionare Bernaud Arnaut But in the UK, Kingfisher is effectively admitting that it's too late to build its own mass free-ISP brand. Instead it's committed to helping AOL carry the anti-Freeserve candle. Could there be any further tie-ins between Libertysurf and AOL Europe? Interestingly enough, the Netscape Online CDs will only appear in Kingfisher's 789 UK Woolworth stores -- and not in the retail giant's Comet white goods/brown goods/beige goods chain -- Britain's biggest electricals retailer, after Dixons. Presumably, this is a carrot for Kingfisher to dangle at another time. AOL Europe is promoting Netscape Online with ads containing the apocalyptic message 'The N is Nigh' -– dangerous stuff -– nigh for whom, Netscape? AOL Europe? Netscape Online is aimed at the "value-conscious segment of UK DIY -- do it yourself -- Internet users". So why is AOL Europe promoting the service with £60,000 full-page ads in the Financial Times, perhaps the least budget-minded segment of the British population you could find? Maybe the FT ad is a snob thing, or maybe AOL's media buyers have cottoned onto the fact that the "value-conscious segment" applies to just about the entire home Internet users population. Market segmentation by price does not work any more for British consumer Internet access: paid-for subscriptions are dead, and everyone knows it. Even AOL's 600,000 paying UK customers, who would have to be brain dead -- or at best, very, very lazy -- to continue paying a tenner a month, when they could get connected to the Internet for free. You can help cannibalise AOL Europe's business by popping into your local Woolies in the next few weeks. The co-branded Netscape Online/Woolworths CDs won't be too hard to locate –- you'll find them in the multimedia section. You'll know when the stock's in -- there's going to be display boards outside the stores promoting the free software and special display units inside the stores. ® Related Stories LineOne pokes tongues at Netscape Online Free AOL launches under Netscape banner Daily Net finance news from The Register

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