• Recommend:
• 0 Comments

AOL Offers All You Can Eat Internet Access

Fixed rate now includes unlimited access; company completes restructuring.

By Courtney Schlisserman (Medill News Service), PCWorld   

%dquotYou can now get the big brand product for the price of the generic,%dquot said Robert W. Pittman, president and chief executive officer of AOL Networks, the Internet Online division of America Online. Pittman was referring to additional services AOL provides, including chat rooms, some publications and e-mail.

The company will also offer a %dquotbring your own access%dquot fee of $9.95 a month for those who use separate Internet service providers (ISP) and a trial rate of $4.95 for three hours of service.

However, some analysts see AOL%squots move as a sign of %dquota little too little a little to late.%dquot

%dquotEveryone is charging $19.95,%dquot said John Robb, an analyst at Forrester Research in Boston. %dquot[AOL Chairman and CEO] Steve Case is just reacting. He%squots trying to keep the people from leaving.%dquot

AOL has been under pressure recently to change to a flat rate price from $9.95 a month for five hours of access, and $19.95 a month for 20 hours. Earlier this month, Microsoft unveiled a product that provided limited Internet access for $19.95 a month and would be sold on top of other Internet service providers. CompuServe charges $19.95 a month for SpryNet, an Internet access provider, and $17.95 a month for WOW, a service along the lines of AOL. In addition, ISP AT&T charges $19.95 a month to its long distance customers and $24.95 a month to non- customers.

%dquotMicrosoft was the straw that broke AOL%squots back,%dquot said Mark Maradian, an analyst at Jupiter Communications in New York. %dquotThe company was stuck in a situation where it had to say %squotYeah, we should have done this six months ago%squot,%dquot he said. This was not an easy decision; AOL is facing a situation where it could break even or lose money, Maradian noted.

Peter Krasilovsky, an analyst at Arlen Communications in Los Angeles, was even more forgiving. AOL%squots contracts with more than 400 providers such as The New York Times, could have made it difficult to negotiate a fixed rate, he said.

The price change was announced in conjunction with the final leg of AOL%squots restructuring. The company also announced that its AOL 3.0 software is now available for PowerMac and Window%squots 95 customers. The program integrates Microsoft%squots Internet Explorer 3.0 web browser and Internet search vehicles. As part of this, AOL will fold its GNN Internet access service, a library of web sites which provides content navigation.

The company also announced new partnerships with the Late Show with David Letterman and Rolling Stone Online. A preview of the Late Show link will be on the AOL site until the end of November, when the official site opens.

%dquotIt%squots a whole new show,%dquot said company representative Robin Patton. The site will give consumers a look into what goes on behind the scenes of the Late Show with chat rooms and skits. It may also be used on the television show.