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America Online, the Bill Clinton of the Internet, continues to dominate the market for online services, despite developments that its critics were certain would reverse its fortunes. With 11 million subscribers, AOL enjoys a substantial lead over its competition, and even had the gall recently to raise its monthly rate for unlimited Internet access 10 percent, apparently unconcerned that its rivals could make inroads with their lower prices.
It will now cost you $21.95 a month for an AOL subscription with unlimited access to the Internet. You also get AOL’s own services, including its easy-to-use electronic mail system, but nearly every other Internet service provider also offers e-mail, complete with software. Many of these services charge $19.95 a month, but a savvy shopper can get unlimited Internet access with e-mail for as little as $9.95 per month.
For example, Yahoo!, the World Wide Web service noted for its popular search engine, has teamed up with MCI to offer unlimited Internet access through about 300 access numbers nationwide for $14.95 per month. That rate rises to $19.95 after three months unless the customer signs up for MCI long distance service, in which case it remains at $14.95.
On paper, the Yahoo! service should be a serious challenger. Despite its somewhat exotic name, Yahoo! is a major Internet brand name, and it has recently substantially boosted the content available at its Web site with a growing selection of news, stock quotes, movie reviews, sports scores, weather and other information which the user can customize to his or her needs and tastes. Yahoo! also has developed extensive pages devoted to such popular news stories as the Monica Lewinsky case.
Other large Internet service providers also have tried to move in on America Online’s market. Erol’s Internet, which serves much of the Northeast with monthly unlimited rates as low as $9.95 a month, recently teamed with a customizable news and information site called Planet Direct, to offer what’s billed as a full-blown online service, intended to compete with AOL.
Erol marketing director Orhan Onaran thinks the prospects are bright, noting both the recent AOL price increase and the round of bad public relations AOL had last year when it first offered unlimited Internet access and underestimated the demand. The result was serious access problems for many AOL customers and a major public embarrassment for AOL.
Even now, many AOL customers complain that Internet access is painfully slow and express annoyance at AOL’s practice of popping up ads for other products and services which users must click past to get where they’re going. Invariably, a couple of such ads pop up at login and more may appear as you navigate the service. It is annoying to pay for a service and have ads thrust in your face. Other Internet sites have advertising, but it is just part of a page, as in a newspaper or magazine. It doesn’t stand between the user and the content.
But obviously AOL is doing something right; 11 million subscribers can’t all be wrong. Certainly, AOL’s access software, the program that provides access to its own exclusive services, is easy to use and visually highly attractive. Its e-mail system is equally easy to use, freeing the customer from filling in arcane on-screen forms which ask them to identify such things as their “POP” and “SMTP” servers.
As for its Web access, AOL’s software has a built-in browser based on Microsoft’s Internet Explorer. It may not have all the bells and whistles of the latest versions of Netscape Navigator or version 4.0 of Internet Explorer. But it is a perfectly adequate browser, straightforward and simple to use. It is all most users would ever need.
In all, not a bad product, which has benefited from a marketing campaign that places a diskette or CD-ROM containing AOL’s software together with a free trial offer in the hands of almost anybody who has ever owned a computer, bought a modem or bought a computer magazine. Put the disk in your computer’s drive and within minutes you’re up and running (provided you have a modem), sending e-mail and exploring the Internet.
There have been repeated predictions that AOL would fall by the wayside. There was considerable hand-wringing to this effect when Microsoft’s Windows 95 first came out, with built-in access to Microsoft’s own online service, the Microsoft Network. Even AOL did some of the screaming to the government that this was unfair.
It all proved much exaggerated. Now Yahoo! and others are having another run at AOL. They might even prove to be serious competitors. But don’t bet on it.
T.R. Reid is Rocky Mountain bureau chief of the Washington Post. Brit Hume is managing editor of Fox News in Washington. You can reach them in care of the Washington Post Writers Group, 1150 15th St., Washington D.C. 20071-9200, or you can e-mail T.R. Reid at [email protected], or Brit Hume at [email protected].
