MS will look for CompuServe defectors

Microsoft will attempt to cash in on any confusion regarding AOL and CompuServe's combination by positioning itself as a safe haven for defectors.

Judy Gibbons, UK director for MSN, said that Microsoft will renew marketing and subscriber recruitment efforts with version 2.5 of MSN, scheduled for release on September 30. "CompuServe members represents a different constituency to AOL and MSN is more synergistic and computer-literate," she claimed. "MSN has key benefits that are very attractive to CIS users and we want to communicate them. The CompuServe base AOL has bought is vulnerable. In an acquisition the users of the company being acquired feel uncomfortable; it was the same when Novell bought WordPerfect and WordPerfect instantly lost users, and it's particularly the case on the Internet where there is an opportunity to change every month. AOL has said it will keep the businesses separate but what degree of investment will they put in?"

Gibbons said AOL and CompuServe's actions in divorcing themselves from their network operations were a belated recognition of what MSN had done two years ago. "We recognised that access should never be a priority - you just go through the best provider. It's a scale business. [WorldCom subsidiary] UUnet have been very smart in that they've recognised that you win based on volume, and that means key large customers."

Gibbons also criticised what she said was the lack of a clear development path for AOL and CompuServe developers.

"What they're trying to do is reach scale and amortise their investment against a large customer base, but how will they integrate? They're both proprietary platforms and there's not much leverage in content development between the two. It's much easier to have people develop for the Net and pick up the best technology you want. We're taking a long-term approach and investing in a number of services that speak to the whole of the Web, even to people who will never buy access from us. Everyone knows access will eventually become a commodity; offering it is an ephemeral thing, a marketing tool."