With the launch of Netscape Online, the AOL brand may struggle to survive in a vastly competitive market
AOL has taken the wrapping off its Freeserve-killing free ISP service, Netscape Online. Freeserve will certainly be affected, but it may be the AOL brand which makes it into the obituary notices first. (see Newswire 24 August)
The launch means AOL will now have to juggle three ISP brands: Compuserve, which it bought back in 1997; its existing £9.99 a month AOL service; and Netscape Online. (see VNUNet 20 August)
This means AOL must strive to keep them different enough to avoid internal conflict in the already highly competitive ISP market.
With Freeserve currently claiming 1.32 million accounts in the UK alone, AOL is clearly loosing market share and the decision to launch a free ISP was an obvious forced move.
Netscape Online's target audience is the 25-year-old, Net-savvy male with a passion for music, sport and women. The official line from AOL is that it is aiming for the younger, predominately male, 'DIY' user, but with content deals from lads' magazine Maxim and games magazines, the actual audience is clear.
The decision to distribute the setup disks through high street retailer Woolworths is a strange move. While the store does sell music and electrical goods, the techno-trained males targeted by Netscape Online are unlikely to shop in Woolworths for the latest CDs and equipment.
How a free ISP fits into AOL's strategy is still unclear. The company maintains Netscape Online fits in neatly between AOL's family-orientated service and Compuserve for the busy professional.
It said that while negotiating content deals across all its brands, what appears on each service will be very different, targeted precisely for each audience.
"It's all about targeting and addressing the content very specifically," said AOL UK's new managing director, Karen Thomson.
Some company watchers believe the arrival of Netscape Online and the recent management changes indicate that AOL Europe is gearing up for a major change of strategy, and that it clearly intends to cannibalise the existing customer base for AOL, pinning all its hopes on Netscape Online and Compuserve UK.
Chris Lewis, director of research company Yankee Group Europe, wouldn't go this far, but does believe that the launch of Netscape Online could cause problems for AOL.
"It does put AOL in a tricky position," he said. "Despite its European success, AOL has never gained quite the same recognition that it has in the US, whereas Compuserve and Netscape are both strong pan-European brands."
AOL's appeal was always that it provided content you couldn't get elsewhere. But with similar services - Lineone, for instance - going free, the constantly improving Freeserve and the new content-rich Netscape Online, the amount of unique content on AOL has been drastically reduced.
Andreas Schmidt, president and chief executive of AOL Europe, said that the company wasn’t expecting any AOL users to switch to Netscape Online because they’re for distinctly different markets. "It will target a new piece of the pie, a new market segment," he said.
Schmidt is also confident that the fact that Netscape is synonymous with the Internet is enough to ensure its success.
"This is not Internet access from your butcher or your retailer, this is access from the Internet company," he enthused.
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