Sign in Subscribe
Internet services

AOL Enters UK Free Internet Market with Netscape Online, Casts Doubt on Business Model

Strategic Insights

— 1 min read

The world's biggest internet access provider, Online, is set to launch its own free service in the UK, while maintaining its paid-for AOL and CompuServe brands. Called Netscape Online, the new free service aims to capitalize on the success of Freeserve, which has become the biggest internet access provider in the UK. However, AOL appears to be cautious about the viability of this business model, with its president, Andreas Schmidt, stating that many free ISPs may struggle to attract electronic commerce and advertising to survive. Meanwhile, AOL's UK managing director, David Phillips, emphasizes that Netscape Online will complement AOL's existing brands, rather than compete against them.

Key Takeaways:

  • AOL is launching its own free internet service, Netscape Online, in the UK, while maintaining its paid-for AOL and CompuServe brands.
  • The new service aims to capitalize on the success of Freeserve, which has become the biggest internet access provider in the UK.
  • AOL president, Andreas Schmidt, has cast doubt on the business model, stating that many free ISPs may struggle to attract electronic commerce and advertising to survive.
  • AOL has about one million subscribers in the UK and more than 20 million subscribers worldwide.
  • Netscape Online will be geared towards value-oriented consumers, who are more likely to be male, younger, and single.
  • AOL's UK managing director, David Phillips, emphasizes that Netscape Online will complement AOL's existing brands, rather than compete against them.
  • Freeserve has 1.32 million active users and is expected to be valued at up to $1.5 billion when it is floated next month by its parent company, Dixons.
  • AOL has acquired Netscape for $2.6 billion last year.

Statistics:

  • 100 internet service providers (ISPs) have launched free access services since Freeserve moved into the market last year [1].
  • AOL has about one million subscribers in the UK and more than 20 million subscribers worldwide.
  • Freeserve has 1.32 million active users.
  • AOL 5.0, new software for fee-paying subscribers, will be launched in the autumn.
  • Netscape Online will go live in mid-August.

Sources:

  • BUSINESS STAFF AMERICA Online
  • [1] According to Andreas Schmidt, President of AOL Europe.

Read more