Jesse Berst: How AOL beat Microsoft to win your future

Back in the DOS days, there was a joke: Microsoft made good plumbing, but lousy toilet seats -- a reflection of its inability to provide a comfortable interface.

America Online makes lousy plumbing (remember its infamous 19-hour outage?) but good toilet seats.

Now, in AOL's latest effort to make an increasingly important function easier and more comfortable, the online giant is rolling out the Net equivalent of the ultimate potty: An interface that's fuzzy. Padded. And pre-installed on a cheap computer.

AOL, which boasts 17 million subscribers, is taking direct aim at the mass market with new plans to invest in cheap-PC maker eMachines. Its goal: to make it easier and more affordable than ever to get on the Net -- via AOL, of course.

The move will hit PC makers where it hurts, coming just as:

  • Major computer makers discover the Net has become the No. 1 reason consumers buy PCs.

  • PC prices sink to new lows.

  • Vendors such as Dell and Gateway begin pushing Net access packages of their own to offset sagging margins.

The move also threatens MSN and other online services, dwarfed by AOL's market share. MSN is about to roll out yet another iteration of its online service to its 2 million subscribers. It is still trying to catch up after blowing an early opportunity by force-feeding things users didn't want from the Net. Slow-loading TV-style entertainment, for instance.

Meantime, AOL was focusing on the newbie-friendly stuff. Earning a reputation as the easy way to hook up to the Net. And waiting for consumers to catch up.

Jump to Page 2 to find out if AOL was right...

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