CIS integration is the challenge for AOL

Analysts clearly liked the look of the ménage à trois that made new partners of WorldCom, AOL and CompuServe.

In particular, they loved the way that that AOL finally gets CompuServe without having to pay for the network plumbing, hives off its own hardware infrastructure to WorldCom, and even gets $175 million cash into the bargain.

Sounds great, doesn't it?

However, anyone familiar with IT mergers and acquisitions knows that this is just the honeymoon and, as with any honeymoon, the thorny business of establishing whether the relationship is built on solid ground is yet to come.

Specifically, the key question has to be what AOL intends to do with its new partner's service. Granted, the buyout provides CompuServe with 2.6 million new members to add to its own nine million. Granted also that CompuServe gives AOL breakthrough numbers in Europe: 850,000 members on top of its own 700,000.

Now the tough part: how to keep that membership happy, and how to grow it.

The statement AOL has made is thin gruel. It says it plans to keep the services separate with AOL concentrating on the mass market and CompuServe focusing on professionals, IT types and vocational specialities.

That won't wash.

To maintain two separate brands is fair enough as a near-term, getting-to-know-you exercise but nothing more. It costs too much in marketing dollars, it leads to confusion in users' minds.

An obvious yet obviously flawed alternative is to get rid of the CompuServe brand and give all CompuServe subscribers a default rollover to AOL.

That won't work either. Marketing bull apart, they really are two different breeds and CompuServe members used to looking for work, researching projects and talking in great detail about IRQ settings won't all be impressed with the colourful, zappy consumer appeal of AOL.

Any way you look at it, some CompuServe members will take this opportunity to jump ship; most, one would guess, to a vanilla ISP. Perhaps AOL's best chance is to create a sub-branded area - 'AOL Pro' if you like - that caters for the CompuServe audience and doesn't dilute the appeal of either today's AOL or CompuServe. As a bridging exercise it might look like something halfway between the two services, using AOL's excellent navigation and chat/discussion tools but skipping some of the garishness.

Whatever AOL's plans to become a content provider to different types of hardware platform, it's integration that's the real challenge that lies ahead.

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