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AOL releases figures, Freeserve still on top

AOL, CompuServe and Netscape Online. Put them all together and what do you get? Second place. Jane Wakefield reports
Written by Jane Wakefield, Contributor

AOL claimed Friday it has 1.2 million active users -- meaning growth is up but the world's biggest ISP, even with its two sister companies CompuServe and Netscape Online combined, is still trailing Freeserve in the UK.

According to its figures, AOL and CompuServe combined has 1.2 million users -- 800,000 of which are registered with AOL. This gives AOL 200,000 new users since November. Netscape Online has 400,000 users, giving the trio 1.6 million users in total.

Freeserve claimed it had 1.675 million active users in January.

The quiet announcement seems to have signalled the end of the days when Freeserve and AOL battled it out on numbers as AOL dismissed the importance of the figures. In fact the ISP was not planning a formal announcement. "We are telling people when they ask but we are not making a song and dance about the figures. Raw numbers do not a business make," said AOL spokesman Matt Peacock.

Ajay Chowdhury, managing director of ISP LineOne, thinks there is another reason for AOL's reticence. "It has spent millions in advertising but it is my belief that AOL is going backwards rather than forward," he said. "Until the last quarter they [AOL] produced individual figures for CompuServe and AOL. The fact that they are now combining them surprises me and leads me to assume the individual figures are not very good so they are putting them together," he said.

Petra Gartson, analyst with research firm Gartner Group believes AOL's growth is due for a slowdown. "In the UK the free ISPs have really given AOL a hard time," she said. While AOL experienced healthy growth until the free ISP model came along in October 1998, it is only around now that they will be feeling the effects Gartson claimed. "Most subscribers are set up with an annual deal and some will have run out by now, and people will be rethinking what they are going to do about getting online,"

Some commentators believe AOL may rethink its whole strategy if the rumours of a impending float for AOL Europe come true. "If it floats it may go free," predicts LineOne's Chowdhury.

Can AOL continue to grow and why do you think it has combined its numbers with Compuserve? Tell the Mailroom

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