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Microsoft Corp.

America Online's Dominance in the Internet Service Provider Market Declines

Strategic Insights

— 1 min read

America Online, the leader in internet service providers, has seen its market share plateau, while the internet access market remains diverse and competitive. The company has added 5.1 million members in the last year, reaching 17 million subscribers, but its growth rate is slowing. New business models and competitors, including free access and discounted plans, are emerging, challenging America Online's dominance.

Key Takeaways:

  • America Online's market share may be declining, despite adding 5.1 million members in the last year, reaching 17 million subscribers.
  • The company's growth rate is slowing, with some research firms estimating a decline in market share to 21.5% or 39.3%.
  • The market for internet service providers remains diverse, with small local providers growing in number and gaining share.
  • New business models, such as free access and discounted plans, are emerging, led by companies like Netzero and Alta Vista.
  • Industry analysts predict consolidation is imminent, with large service providers like America Online and MSN acquiring smaller companies.
  • Small providers are gaining share due to personalized service and niche offerings.

Statistics:

  • 17 million subscribers for America Online (not specified when this statistic was gathered)
  • 5.1 million new members added to America Online in the last year
  • 21.5% market share of America Online (Cahners In-Stat Group estimate)
  • 39.3% market share of America Online (IDC estimate)
  • 66 million total number of internet accounts in the United States (Cahners In-Stat Group estimate)
  • 37 million total number of internet accounts in the United States (IDC estimate)
  • 1.3 million subscribers for Netzero (claimed by Netzero in the article)
  • 100,000 subscribers for Netzero last October
  • 521% growth in subscribers for Netzero in the last six months

Sources:

  • Boardwatch Magazine
  • Cahners In-Stat Group
  • IDC
  • Jupiter Communications
  • America Online
  • Microsoft
  • AT&T
  • Netzero Inc.
  • Microworkz.com Corporation
  • Earthlink Network Inc.
  • Mindspring Enterprises Inc.

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