The Battle for Web Supremacy: Four Giants Clash for Dominance

Strategic Insights -

Four technology giants - RealNetworks, Microsoft, Yahoo, and America Online (AOL) - are engaged in a fierce battle to aggregate and deliver news, information, and entertainment over the Web. AOL, particularly, is struggling to adapt to the shift from dial-up to broadband services, while Microsoft and Yahoo are vying for a foothold in the broadband market. Meanwhile, RealNetworks is strengthening its position with a range of content offerings.

Key Takeaways:

  • AOL has beefed up its content with the addition of an online sports news video program in conjunction with Disney's ESPN and a new AOL food channel with recipes and other content from magazines such as Cooking Light.
  • America Online and MSN are attempting to transition from pure Internet service providers to comprehensive online content providers, but face stiff competition from broadband pipe owners, including phone and cable TV service providers.
  • AOL's monthly fee for broadband is $54.95, while competitive pricing from telcos and dial-up providers has dropped to as low as $30 a month.
  • EarthLink is offering "no frills" dial-up services for less than $10 a month, posing a threat to AOL's dial-up business.
  • Industry rumors suggest that Time Warner may consider reevaluating its ownership of AOL, with possible merger or joint venture discussions with Deutsche Telecom's T-Online Internet subsidiary.

Statistics:

  • AOL's free cash flow is expected to exceed $1 billion in the current year.
  • The monthly fee for AOL's broadband service is $54.95.
  • Competitive pricing for broadband services has dropped to as low as $30 a month.
  • EarthLink's "no frills" dial-up services cost less than $10 a month.

Sources:

  • Suddeutsche Zeitung
  • T-Online Internet subsidiary press release
  • AOL's financial reportsisclosed