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MS Takes on AOL in Web Access: Round III
Cenotaph writes "ZDNet has this article on how Microsoft plans on trying to take AOL's web business away. Any guesses on if it'll work?" MS tried something similar a few years ago and failed. This time, who knows? But whether the current plan succeeds or fails, this is *very* bad news for smaller ISPs. The story says, bluntly, that Microsoft plans to "...help drain profits from the Internet-access business."
I do not think it is going to be very long before ISP's *have* to offer free connections, and need to make their money elsewhere (through advertisements, online stores, etc.).
While you might be right for most ISP's, I for one (and probably many others) would be more than willing to pay a fair price for a "premium" ISP that offers good service without all the ads. There should be enough of a market that at least some will survive.
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Open mind, insert foot.
I'm just a little confused about Microsoft's strategy.
I thought they all but abandoned the dial-up market a year or so ago, because it was obviously a swampland of lost money. Now, I guess mainly out of paranoia, they're returning to try and beat AOL.
I know Andy Grove says that only the paranoid survive. Yes, yes, yes. But perhaps only the paranoid die by bleeding cash to try and protect their franchise? If you want a realistic Microsoft death scenerio, this might be the best one yet.
D
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You know, it's kinda funny - when I wrote the ISP FAQ at http://www.amazing.com/internet/ , I practically begged ISPs not to use NT. I told them that they were supporting their worst potential enemy, and that was a pretty dumb thing to do.
:-(.
I don't think many of them believed me, but can anyone doubt the truth of that statement now? Sadly, during most of that time, they were more than happy to take the free MSIE browser. Now they face the consequences
D
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Actually, it's exactly _unlike_ TV stations. TV broadcasts were free in the US at the beginning. Now cable TV (people paying at least $20/month) is in something like 80% of US homes. DSS and other systems are on the rise, too. The president of NBC recently floated the idea of making NBC a cable station, as a way to get back at affiliates.
Besides the premium movie channels (which cost even more money/month), there is plenty of advertising on cable networks, because advertising alone isn't going to pay the bills. Broadcast networks get money from affiliates (and some get money from producing shows, like Fox, WB, and UPN. ABC, CBS, and NBC have some restrictions placed on them by the FCC. They might have been lifted recently, though). Newspapers and magazines resell their content and some own other media outlets (For example, The Washington Post Company owns Newsweek and several cable companies under the name CableOne). I can't think of a single example of a media outlet which is funded soley by advertising.
If anything, internet access is going to be like any utility, not like a TV network. There's no free electricity, no free water, no free phone service, and free TV is going the way of the dinosaur. Why would there be free internet access ?
-jon
Remember Amalek.
Have you ever wondered why people buy Kleenex instead of Puffs facial tissues? It's the same reason that people use AOL, familiarity. Let me illistrate with a real story:
In my effors to fund my education I work for the school tech support. Our school has free 56K dialup access. Our outgoing phone lines still hardly keep up at night with outgoing AOL users dialing in. They pay the money when they have faster, more reliable, commercial free access with tech support. It gets worse. When I go around installing 10/T network cards in fellow students computers I get people who still want to be able to dial out to AOL, dual T1s for free vs AOL 33.6 for a monthly fee and they choose AOL. I am nice enough to show them how they can be connected to AOL through our dual t1s and it is faster (after I fail to try to tell them AOL is evil) and they pay a smaller monthly fee.
If Microsoft offers dual T1 lines to everyone's home for free and sends real people out to support it they will still lose. AOL is unstoppable. Those disk wars they had a few years back paid off. They have a loyal (albiet ignorant) customer base. The only way to defeat AOL would be through education, and that's a whole new topic.
Anyone who cannot cope with mathematics is not fully human.
I do not think it is going to be very long before ISP's *have* to offer free connections, and need to make their money elsewhere (through advertisements, online stores, etc.).
So in a sense, These companies are becoming more and more like Television stations. Where you can get the entertainment, but you just have to put up with the advertisements/commercials. Broadband technologies will move it even further in this direction.
Most of the small ISP's will not make it, and this market will soon become an oligarchy, with a few huge companies trying to snare market share from the others through heavy advertising.