America Online is spending $340 million in the next four years in expanding its network to grab back market share from Internet-based rivals.
Internet access provider BBN will build a private TCP/IP dial-up network to give America Online enough capacity to manage its burgeoning subscriber list. Currently AOL generates around 35 per cent of all traffic on the World Wide Web. It also hosts many popular Web sites on its own servers. BBN will provide 70,000 extra modems as well as operating and maintaining a portion of AOL's Internet system. It will also provide telecomms circuits purchased from local and inter-exchange carriers.
America Online boasts more than 6.2 million members around the globe. It provides a range of services including email, conferencing and interactive magazines. Since March 1995 it has grown from having 10,000 modems to 170,000 in more than 700 cities around the world.
However, two weeks ago AOL admitted that it was concerned at loss of subscribers to rival Internet services and this investment is sure to be a counter-blow against such new competition.
Said Mike Connors, president of America Online Technologies:"Comprehensive advance planning is a prerequisite when we?re dealing with the largest and arguably fastest growing digital network on the planet. Just this week we hit our heaviest single day of usage ever. There?s certainly no reason to believe this will slow down."
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