Network: Casting the Net wide

AOL introduced the Internet to millions of users. But now it has to diversify.

THERE MAY be no such thing as a free lunch. But there are such things as free Internet service providers, as British consumers have found out over the past few months; and now there are free computers, as well.

Both are being mulled over by AOL, the world's largest Internet service provider. It is keenly aware that its massive and expanding subscriber base is its greatest asset; that to attract more customers requires increasing ingenuity and investment; and that the word "free" goes down pretty well with consumers.

AOL, for many people, is the Internet. "You've got mail" is an instantly recognisable line that made its way into a film title; the company positioned itself as the Great Provider for the vast mass of people who were venturing on to the Net for the first time, and most of them stayed. But Dixon's FreeServe has knocked the stuffing out of other ISPs in Britain, attracting perhaps 1.3 million registered users, while AOL has 600,000. In short, it got left behind.

The company's Virginia headquarters confirms that AOL is looking at the idea of following suit, perhaps introducing a service under the name of one of its other brands - maybe Netscape, the browser company which AOL owns, or ICQ, its web-based messaging service. It might even do a deal with a telecoms company to offer cheap calls, thereby providing what some officials call "more than free". Nothing will happen for some months, but the company is working on it.

In the US, AOL has done a deal with eMachines, a maker of cheap (under $600) computers, to offer new subscribers to its CompuServe Net service a rebate of up to $400 on a new computer. Some eMachines models go for $400, so effectively you get the computer free. "AOL and CompuServe 2000 software will be integrated into all eMachines personal computers, and will be accessible through icons prominently featured on the eMachines desktop," says the company. You have to sign up for three years - an eternity in Net terms - but it's not a bad deal.

The slogan of "AOL everywhere" is also being boosted by a deal with 3Com, manufacturers of the Palm Pilot, to allow the hand-held devices to send and receive mail via AOL accounts. AOL is also working on ways of keeping people logged on as long as possible. So AOL 5.0, the new version of the company's software that will be put into beta testing soon, has all the latest bells and whistles: a calendar, a new search engine, and a gizmo that detects whether the user has a high-speed connection and reacts accordingly. It also has "You've Got Pictures", developed in partnership with Eastman Kodak, which enables users to share and swap pictures. Drop your negatives off, and you get them back via AOL as digital pictures.

But it is the free PCs which have won the most attention. For many people, getting on to the Net is the main (if not the only) reason to buy. Gateway and Compaq have bundled Internet services with their machines for some time; now, the computers are being bundled with the Internet service. Circuit City and Best Buy, two leading US retailers, are both offering rebates that make the machines essentially free; Best Buy has a tie-up with Prodigy. And Microsoft offers $400 credits with PCs bought at the office equipment shop Staples.

To some extent, AOL is shifting into hardware, though the company prefers not to harp on this: it wants and needs good relations with the manufacturers. More to the point, "AOL everywhere" is not just a slogan for growth: it is a means of survival. AOL's advantage so far has been its ease of access to the Net, its ability to promise a smooth entry into a world that seems forbidding for most users. Its service could reach 30 million subscribers by 2002 from about 16 million members now, and it has also expanded in Asia, Europe and Latin America: it bought a 10 per cent stake in China.com, the Chinese portal, and plans to launch in Hong Kong later this year.

In the US market, it faces intense competition in the race to dominate broadband. AT&T, now set to be the largest cable operator in the US, has teamed up with Microsoft, both of which have their own Internet access arms. AOL will begin testing broadband access via digital subscriber line (DSL), a telephone technology, this year. Last month it invested $1.5bn into Hughes Electronics for ventures with its DirecTV and Hughes Networks Services arms.

But is the company positioning itself for future growth or reacting after the event? As recently as March last year, AOL's chief executive, Steve Case, said that broadband "will happen, but it's nowhere close. If you keep an eye on Main Street, not Silicon Valley, it pays off... Thou shalt not launch before the market is ready."

However, AOL has been written off by the technology press many times, only to show its resilience as a brand, as a product and as a company.

Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

ebooks
Arts and Entertainment

film
Arts and Entertainment
Chvrches lead singer Lauren Mayberry in the band's new video 'Leave a Trace'

music
Arts and Entertainment

music
Arts and Entertainment
Home on the raunch: George Bisset (Aneurin Barnard), Lady Seymour Worsley (Natalie Dormer) and Richard Worsley (Shaun Evans)

TV review
Arts and Entertainment

TV
Arts and Entertainment
Strictly Come Dancing was watched by 6.9m viewers

Strictly
Arts and Entertainment
NWA biopic Straight Outta Compton

film
Arts and Entertainment
Natalie Dormer as Margaery Tyrell and Lena Headey as Cersei Lannister in Game of Thrones

Game of Thrones
Arts and Entertainment
New book 'The Rabbit Who Wants To Fall Asleep' by Carl-Johan Forssen Ehrlin

books
Arts and Entertainment
Calvi is not afraid of exploring the deep stuff: loneliness, anxiety, identity, reinvention
music
Arts and Entertainment
Edinburgh solo performers Neil James and Jessica Sherr
comedy
Arts and Entertainment
If a deal to buy tBeats, founded by hip-hop star Dr Dre (pictured) and music producer Jimmy Iovine went through, it would be Apple’s biggest ever acquisition

album review
Arts and Entertainment
Paloma Faith is joining The Voice as a new coach

TV
Arts and Entertainment
Dowton Abbey has been pulling in 'telly tourists', who are visiting Highclere House in Berkshire

TV
Arts and Entertainment

TV
Arts and Entertainment
Patriot games: Vic Reeves featured in ‘Very British Problems’
TV review
Arts and Entertainment
film review
Arts and Entertainment
Summer nights: ‘Wet Hot American Summer: First Day of Camp’
TVBut what do we Brits really know about them?
Arts and Entertainment
Dr Michael Mosley is a game presenter

TV review
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

    The Silk Roads that trace civilisation

    Long before the West rose to power, Asian pathways were connecting peoples and places
    House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

    The honours that shame Britain

    Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
    When it comes to street harassment, we need to talk about race

    'When it comes to street harassment, we need to talk about race'

    Why are black men living the stereotypes and why are we letting them get away with it?
    International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

    International Tap Festival comes to the UK

    Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
    War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

    Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

    Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
    Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

    'A subversive brothel keeper and Communist'

    Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
    Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

    BBC heads to the Californian coast

    The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
    Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

    Victorian fraudster who shook the Bank of England

    Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
    Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

    Car hacking scandal

    Security designed to stop thieves hot-wiring almost every modern motor has been cracked
    10 best placemats

    Take your seat: 10 best placemats

    Protect your table and dine in style with a bold new accessory
    Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

    Cook not the only one to be caught in The Oval mindwarp

    Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
    Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

    Can Benitez get the best out of Bale?

    Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
    Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

    Beijing witnesses new stage in the Jess and Kat rivalry

    The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
    Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

    Jeremy Corbyn interview: A shrewd operator desperate for power

    His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
    Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

    Isis executes Palmyra antiquities chief

    Robert Fisk on the defender of the ancient city's past who was killed for protecting its future