AOL is in talks on acquiring CompuServe

Article Abstract:

America Online (AOL) is negotiating to purchase CompuServe for up to $1.2 billion, a move which would give AOL over 10 million subscribers in total, and threaten the efforts of Microsoft and AT&T to gain a foothold in the market. AOL is pushing to acquire CompuServe stock from 80% owner H&R Block at $11 a share, although the stock has risen to $13.25 since the news of the possible acquisition spread. AOL plans to issue 26 million new shares of its stock to acquire the rival online information provider, which has had encountered difficulties in 1996 and largely withdrawn from the consumer market, although it leads the European market and has a strong network services division. AOL will gain a larger subscriber base and CompuServe's extensive network of modems and access points, which will ease AOL's capacity strains. The two companies have been fierce rivals, and if the acquisition is cleared by antitrust regulations, both the employees and customers of CompuServe, which has maintained a more technologically-savvy image, will have to adjust to AOL's mass market appeal.

Mergers, acquisitions and divestments, Services, Internet, Internet service providers, Company acquisition/merger, AOL, Internet service provider, CSRV

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On-line services try to define their identities

Article Abstract:

CompuServe, Prodigy Services and America Online are trying to update and sell their brand identities. Previously, the services competed for subscribers by direct mail and price cuts. Now, prices have evened out to about $9.95 monthly for five to ten free on-line hours. With price no longer an issue, the services are trying to market through image. Prodigy already has a middle America, family-oriented image. A recent advertising campaign emphasizing approachability seemed too corny, and consumers did not understand the service Prodigy was offering. Prodigy is developing a new campaign and focusing on improved graphics and navigation. CompuServe is seen as the service of choice for the computer-literate. CompuServe wants to move away from its technology orientation and sell itself as easy, fun and affordable. America Online is considered the 'hippest' of the services. Its new advertising campaign will stress the sense of community found in the on-line arena.

Advertising, Company marketing practices, Advertising (Industry), Prodigy Services Co.

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On-line services' user counts often aren't what they seem

Article Abstract:

On-line service providers often misrepresent their membership numbers, refuse to disclose their methods of calculation and intentionally make their numbers difficult to compare in order to attract the most advertisers. America Online (AOL) claims to have a 3.5 million membership base and that their users maintain enrollment for an average of 41 months. However, the company fails to disclose that thousands of those users are on a free trial basis or that 60% of its customers have only been enrolled since the beginning of 1995. CompuServe's claim of 3.6 million members includes 900,000 users of an unrelated Japanese service. Prodigy claims membership of two million despite the fact that the service only reaches 1.2 million homes. Industry standards would help ensure more accurate membership information, but none of the main service providers actively support such measures.

Membership, Online Service Information

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