Prices rise at AOL

America Online Inc. today said it would raise prices as part of a substantial restructuring move.

America Online Inc. today said it would raise prices as part of a substantial restructuring move. The price move may cause ripples throughout cyberspace.



Hey, AOL users: Will you cancel your subscription now that prices are going up?:


Yes: There are plenty of good $19.95 (or cheaper) alternatives available.


No: AOL is worth the extra $2 a month.





AOL's pricing move comes as the Internet industry rethinks its approach on how to charge for Internet access. In particular, unlimited use may have seen its last days, analysts said, as ISPs strive to ensure decent service. For instance, AOL's CompuServe subsidiary and Netcom, another ISP, recently raised rates above the industry standard $19.95 rate, and IBM put a 100-hour monthly limit on Internet access for subscribers who pay $19.95 per month.



Have an opinion on AOL's price increases? Add your comments to the bottom of this page.



Starting in April's billing cycle, AOL (AOL) will charge $21.95 a month, up from $19.95 a month. AOL cited increased usage by members as the reason for the increased pricing. AOL will not change its $9.95-a-month plan for access to AOL only and its $4.95 "light usage'' plan of three hours plus $2.50 for each additional hour.




AOL is also laying off almost half of the CompuServe employees.


Analysts say that AOL's reorganization makes sense.




AOL also said it would cut 500 jobs at its CompuServe subsidiary, and would kill development of C, a Web-based version of CompuServe.

More details to follow.

Material from Reuters was used in this story.

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