Related Web Works

Tuesday, September 24, 1996

More computer users skip online services Commercial services now connect 38% of users with the Internet. Six months ago, it was 54%.

By Heather Green BLOOMBERG BUSINESS NEWS

SAN FRANCISCO -- More computer users are linking to the Internet through direct-access providers, bypassing online services such as America Online Inc. and CompuServe Corp., a new study found.

The results underscore the declining role of the proprietary online services, said market consultant Odyssey Inc., which conducts the semiannual Homefront survey. That means the online market is ready for a reshuffling, said Nick Donatiello, Odyssey's president.

``Only America Online has gained in market share, and none of the commercial online services has improved its image,'' Donatiello said. AOL is the number one online service with more than 6 million subscribers.

About 48 percent of households surveyed said they connect to the global computer network using Internet-access services, such as AT&T Corp. or Netcom online Communication Services Inc., while 38 percent do so using their online service. Six months ago, 54 percent used online services to link to the Internet, and 30 percent used an Internet service provider.

Overall, the survey found that 14 percent of U.S. households use an electronic online or Internet service. Odyssey, based in San Francisco, polled about 2,000 people for the July 1996 report.

America Online and CompuServe are struggling to compete against the fast-growing Internet, which is cheaper to use and has more innovative technology. More publishers and entertainment companies also are posting their material on the Internet.

The proprietary online services aren't convincing customers that they offer something different from what's on the Internet, Odyssey said.

In fact, Microsoft Corp. and Prodigy Services Co. are moving their services to the Internet later this fall to take advantage of its popularity. CompuServe, which has reported declining subscriber growth, also plans to begin using Internet technology written by Microsoft.

An online service is a collection of information, news and electronic discussions created by the online company. Internet-access services link subscribers directly to the global computer network, where they can look up information published by different companies, publications and news organizations.

Among the households polled, 18 percent used America Online, up from 14 percent in January. Five percent used CompuServe, down 1 percent, the study found.

Among Internet service providers, Netcom has 8 percent of the market, while AT&T's WorldNet, begun in March, has 7 percent. MCI Communications Corp. and PsiNet Inc. each have 4 percent.

In the browsing software market, Netscape Communications Corp. has the most popular product, with 54 percent of the households using the global computer network, compared with 6 percent who use Microsoft's rival software. Of the people surveyed, 48 percent rated Netscape as ``very good,'' while 25 percent gave Microsoft the same rating.

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