America Online has reported heavy losses for its second fiscal quarter and announced it is to start chargingcompanies $55,000 (#34,375) a year for belonging to its Company Connection service.
The company lost $154.8 million for the period ended 31 December 1996.
The loss included a $74.3 million restructuring charge. Revenues for the quarter were up 64% to $409.4 million, from $249 million a year ago.
The planned charge for the Company Connection Service has been criticised as a fix-it for America Online's beleaguered flat-rate scheme introduced last December. Earlier this month, the company agreed to refund customers who had experienced problems connecting to the service. The second quarter figures included a $24 million charge to cover the cost of the refunds.
Company Connection is a forum area of the America Online service where users can select vendors and access files, download upgrades, send Emails and so on. It has previously been free to vendors, which include Creative Labs, Matrox and Cirrus Logic.
Some suppliers believe AOL's decision to introduce a fee is an attempt to claw back revenue lost through the flat-rate scheme.
Jeff Baudin, a forum leader in the Company Connection area, and president of MicroMat Computer Systems, is urging companies to boycott the forum and accused America Online of "betrayal". He has sent letters to Company Connection members, which run into their thousands.
America Online UK was unavailable for comment.
Convention has it that you shouldn't kick a man when he's down, but even when America Online is flat on its back it still hacks people off. The company needs to maintain stable and friendly relations with business partners but doesn't seem to have grasped some of the more basic concepts of business etiquette.
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