Dubbed Netscape Online, the service will go head to head with Freeserve, which has been a thorn in AOL's side since it launched in September last year.
Despite considered assertions from UK boss David Phillips that the free model was no panacea in a time of change, rumours have been circulating about a free service from the AOL camp for months. Netscape Online will go live mid-August.
Netscape Online is designed to complement existing AOL and CompuServe services according to Phillips. If going free is a major U-turn in attitude for the ISP, so is the target audience for its new service. Famed for its 'family values' Netscape Online will target the Loaded generation: young, single, and male. "These new services will be geared toward value-oriented consumers who are comfortable putting together the features and functionality of their Internet experience," said Phillips. "The free-access consumer represents a unique and different market segment -- more likely to be male, younger, and single -- than AOL UK's core audience," he said.
The new strategy goes against AOL's predictions last year, when AOL Studios President Ted Leonsis predicted women would rule the Internet.
Jupiter analyst Nick Jones thinks the specific target of Netscape Online will win users from Freeserve and other free ISPs. "It will take a while to get going but for AOL it is fairly low risk and they will win subscribers from free ISPs," he said. He does not think existing AOL users will transfer. "Netscape Online is aimed at a specific demographic, young male users who want quick and free service. It is another flavour to the AOL brand but if you want all the whistles and bells of AOL you will have to pay," he said.
Ajay Chowdhury, managing director of BT's free ISP LineOne is not so sure the road will be an easy one for AOL's new vehicle. "AOL faces some interesting challenges," he said. "How do they differentiate the AOL brand from the Netscape brand without cannibalising AOL customers? If they put too much content they risk losing AOL subscribers, too little and they won't attract new users. It will be difficult getting the balance right," he said.
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