CompuServe is to renege on its strategy of becoming an ISP rather than simply a content provider.
The company is set to unbundle its content from its Internet access operations in the UK, signalling a move away from the ISP market and further into the content arena. The move is believed to be a reaction to increased competition in the Internet access market from the likes of BT.
CompuServe is the UK's number one on-line service provider, with over a 50% market share.
"The basic Internet access business will be dominated by the telecoms companies," admitted Martin Turner, CompuServe's general manager in the UK. "CompuServe is not going to withdraw from the Internet access market.
But we do recognise that there are a lot of users who connect using other ISPs, and we want to open that market to CompuServe content."
The new direction will mean seeking subscribers to services such as news broadcasts for businesses. From September, Internet users will be able to access CompuServe content without having to use CompuServe as their means of connection. Some content will be accessible through a standard subscription, while other services will be priced on a pay-as-you-go basis, said a spokesman. No prices have been set.
"This is part of a trend that we've been predicting," commented analyst Adam Daum of research firm Inteco. "MSN and LineOne have already gestured in this direction, by offering content without Net access. Unbundling content is exactly the right thing for CompuServe to do. It signals the company is heading deeper into the consumer market - or possibly grooming itself for acquisition."
CompuServe has been faring badly lately, posting losses for the last four consecutive quarters. The company has been in talks with rival on-line service provider America Online about a possible merger.
CompuServe insists it is not withdrawing from the Internet access market, but its unbundling moves show the company has realised its future as an ISP is limited. The company should concentrate on its strengths in on-line content provision. This could, in future, lead to an increased role for CompuServe in the push market.
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