The European Online Market: A Late but Strategic Arrival

Strategic Insights -

In 1995, the World Wide Web exploded onto the scene, revolutionizing the online landscape. Commercial online service providers like CompuServe and Microsoft scrambled to meet the surge in demand, but Europe lagged behind. Compuserve, a US operator, had a significant head start, with over 40% of its European customers in the UK. To catch up, Compuserve launched Sprynet, a low-cost Web service. Microsoft, meanwhile, unveiled a wide-ranging plan to serve Internet users, including a Web browser integrated into Windows 95. Microsoft's move may have been prompted by the success of Netscape Communications, whose browser had become a global phenomenon. European publishers and telecoms operators, however, are now poised to capitalise on their late entry, adopting a more strategic approach by embracing the Internet and bypassing the proprietary US model.

Key Takeaways:

  • Compuserve, with over 3 million customers in the US and 500,000 in Europe (40% in the UK), has a significant lead in the online market.
  • Microsoft's success in online services is threatened by the growing popularity of Netscape Communications, whose browser has a global user base of millions.
  • European publishers and telecoms operators are now adopting a more strategic approach by embracing the Internet, potentially gaining a competitive advantage.
  • America Online has struck a deal with Germany's Bertelsmann to set up a proprietary service in Europe.
  • Europe Online has switched from a proprietary approach to the Internet, potentially gaining a market advantage in family-oriented online services.

Statistics:

  • Compuserve has over 3 million customers in the US and 500,000 in Europe (40% in the UK).
  • Netscape Communications' browser has a global user base of millions.
  • The US market for online services is expected to grow significantly, with family-oriented services alone expected to reach 10 million by 2000.
  • Europe Online estimates a market size of 10 million for family-oriented online services by 2000.
  • The World Wide Web costs little more than a telephone call, making open services more appealing to Europeans.

Sources:

  • The European invention of the World Wide Web took the world by storm in 1995.
  • Compuserve, a US operator, has over 3 million customers at home and 500,000 in Europe, 40 per cent of them in Britain.
  • Microsoft launched Windows 95, which included a Web browser, in early December 1995.
  • Netscape Communications' browser is now used by millions of people, helping the company reach a stock market value of around $6 billion.
  • Europe Online's life so far has been dogged by controversy and delays, but it has switched from a proprietary approach to the Internet.