Online Wars: Will AOL and CompuServe Become Obsolete?

The movers and shakers behind AOL and CompuServe, today's hottest online services, have got to feel like they popped open a fortune cookie -- and these folks can afford the best take-out -- only to be confronted with that cheeky Chinese curse, "May you live in interesting times." For as much money as can be made running an online service in this modem-crazy climate, these times are so excruciatingly "interesting" that it's a wonder online execs have any hair. Sure, revenues are fat, business and consumer interest is through the roof, and everyone who's anyone has an E-mail address.But how long is this roller coaster ride going to head straight up? "The online services... are enjoying the most transitory of successes," wrote Stephen Levy in the January 22 issue of Newsweek. "Everyday the Net gets closer to filling its ambitious promise, their clocks tick closer to midnight." Online, the key word for the past few years has been Internet access. All the services scrambled to be first to provide the full menu of Net offerings like World Wide Web access, Internetwide E- mail, and those saucy, thought-provoking Usenet newsgroups.Delphi had the lead for a bit, but (yawn) who remembers Delphi? Prodigy rushed to the forefront with the first Windows-based online service Web browser, but has still had a tough time, beset by layoffs and the eagerness of Sears (which co-owns the service with IBM) to kick it to the curb.Many online services are finding it's transform-or-die time. Apple announced plans to pull its eWorld online service this month, and AT&T already dumped plans to fully open the Interchange online service it bought from Ziff-Davis. These two, plus Microsoft's slow starter MSN, are reportedly to re-emerge as giant Web sites. But even services which have ridden the roller coaster to meteoric success like America Online and the more staid CompuServe (each has managed to keep the new member signups rolling in) have reason to worry about the future.These guys owe their bursting bank accounts at least in part to the fact that they offer a fairly simple interface to the Internet for online newbies who don't want to study Unix or figure out what in hell a Winsock is. That gives AOL and CompuServe a nice edge so long as folks stay computer illiterate -- or until someone else makes Web access software that's even easier to use. Plus, there's the very real truth that access to the Net via the gateways provided by the online services can get mighty slow, because users are competing with many others in accessing the main service itself.Take into account that companies like Pipeline or Netcom offer cheaper Net access than AOL or CompuServe, and one starts to realize that the services on top right now may be balancing a bit precariously on their pedestals.And it all got more interesting with the recent news that AT&T will offer Net access at prices comparable to that of Pipeline or Netcom to its customers, starting in mid-March.In response America Online president Ted Leonsis was quoted in the online publication Simba Media Daily as saying that the introduction of AT&T into the fray will force online services to focus on marketing and content rather than Internet access. Prodigy CEO Ed Bennett insisted that the race isn't about technology or software anymore, adding, "We're right in the middle of marketing wars," according to the same Media Daily piece.AT&T has finally delivered the long-expected wakeup call to the online services, announcing that someone else can possibly deliver Net access better and cheaper while marketing to an enormous population -- its phone-service customers, who will be offered the convenience of one service, one bill. The result is that AT&T may become the leading Internet access provider within months. The message for the existing providers? It's time to concentrate again on what makes each online service a special social and educational community -- that's what gave each service its unique identity before the Net wars -- and not on which has the best Web browser.If there's a safe prediction to be made here, it may be that we'll see online services begin to act more and more like television networks, marketing and media-spinning aggressively while trying to make "stars" out of special areas and personalities online. The financial "Motley Fool" area on America Online is already getting some mainstream name recognition, and its "NetGirl" Nancy Tomaisitis is seen frequently commenting on TV shows covering online content.Are these positive developments? That's open to interpretation. Certainly, online content will become increasingly mainstream. We'll probably find less tech support and debates on computing ethics in the online future, and more Friends forums. Techno- heavy CompuServe may either have to redefine itself as the one true online technical channel or blindly immerse itself in the "average Joe" arena in order to survive.People like me who do tech support on the online services have already seen the rise of the "remote control" generation in cyberspace. People don't want to learn how to do something, they just want to click and have it done for them. So whatever content these services do provide will have to be very, very easy to use and delivered fast, or members will just click to another channel or service.Who knows? One day very soon, someone may become an overnight gazillionaire just finding a way to build an interface through which one can one-stop-shop through all the online services much like channels on a cable system. You'll be able to scan the hot chat rooms on America Online while playing DOOM with a buddy on CompuServe.But competition is bound only to stiffen later this year, when Time-Warner is set to debut its high-speed LineRunner cable-modem online service in Ohio. Considering that LineRunner can reportedly be accessed at speeds up to 100 times that of traditional telephone modems, AOL and CompuServe need to build some fast lanes, or prepare to eat some dust. Vroom!


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