[Marketing-Public]Wall Street Journal Article

Michael Stearne marketing-public at mozilla.org
Tue, 14 Oct 2003 14:59:06 -0400

Duane Fahey wrote:

> 1)  The Mozilla Foundation could re-sell the Netscape dial-up service, 
> as a way to make money.  I know it's weird, but it might make some 
> sense.  Maybe more sense than trying to sell other software products. 

That's a good idea.  Maybe also bundle some other Free software as an 
Internet Connection Kit, but that is really getting away from Mozilla's 
core business.

> 2)  If AOL/TW said no to this, then perhaps the Mozilla Foundation 
> could re-sell Earthlink's dial-up/DSL services.  This is probably a 
> bad thing to even suggest, to go against the former parent, but, maybe 
> it makes sense.
> Will there still be a Netscape browser?  Does anyone know?

They could use XUL and Mozilla to make a AOL like client for Netscape 
and AOL Communicator pretty easily, I would imagine.  But that would be 
too forward thinking.  They'll probably opt to bundle IE.

> If AOL/Time Warner will not put out a Netscape browser, maybe the 
> Mozilla Foundation could make one as part of a deal to re-sell the 
> dial-up service.  Everything is done, it would just need to be updated 
> with the Mozilla revs, right? 

AOL wouldn't let Mozilla put out a Netscape branded browser I don't 
think.  They'll probably just use NS 7.1.


> - Duane
> Jay Garcia wrote:
>> Sorry to post the whole thing but I don't have the link.
>> Any impact on Mozilla, F'bird, T'bird ??? Thoughts anyone?
>> ----------------------------------------------------------------------------- 
>> AOL to Launch Dial-Up Service
>> Called Netscape at a Discount
>> Staff Reporter of THE WALL STREET JOURNAL
>> In the face of increasingly aggressive price competition, AOL Time
>> Warner Inc.'s America Online is quietly readying another dial-up
>> Internet service that will be cheaper than its flagship $23.90-a-month
>> service, according to people familiar with the situation.
>> To protect the America Online brand name, the new service will carry the
>> Netscape name, and it won't offer as many features as America Online's
>> premium service, these people say.
>> For instance, Netscape users will get only one e-mail address instead of
>> the seven offered by America Online, plus a home page that includes news
>> and a Google search function. The Netscape service, which is expected to
>> cost $9.95 a month and will likely be launched early next year, is being
>> referred to as "raw Internet access" by some executives at the company's
>> Dulles, Va., headquarters.
>> By making a foray into the discount arena, America Online is making a
>> classic consumer marketing move: creating a subpremium brand that runs
>> the risk of cannibalizing its core business but potentially fends off
>> rivals from snapping up its customers. Over the years, a host of
>> marketers -- from Delta Airlines with its Song carrier to Gap with its
>> Old Navy chain -- have followed a similar strategy.
>> The move highlights the intensity of the competition facing America
>> Online, which is increasingly finding it difficult to justify the high
>> price of its dial-up service. AOL lost nearly two million subscribers
>> world-wide in the year ending June 30, 2003.
>> A raging price war among providers of high-speed broadband services,
>> which offer Internet access at speeds that can be more than 20 times
>> faster than America Online's dial-up connections, has driven down prices
>> at the top end of the market. Last month, the second-largest regional
>> Bell company, SBC Communications Inc., dropped the price for its
>> digital-subscriber-line service for some subscribers to $26.95 a month
>> from $29.95. The largest phone company, Verizon Communications Inc.,
>> lowered its price for DSL to as low as $29.95 a month from $39.95 for
>> certain telephone subscribers earlier this year. That means many people
>> can get broadband from their local phone company for just a few dollars
>> more than the price of AOL's slower dial-up connections.
>> At the same time, competitors offering dial-up Internet service for
>> $9.95-a-month have been nipping at America Online's heels. In the first
>> six months of this year, subscribers to discount Internet service
>> provider United Online Inc. rose 17% to 2.6 million, while subscribers
>> to America Online's services fell 6% to 33.3 million world-wide. Rival
>> EarthLink Inc. has stepped up the television advertising campaign for
>> its $10.95-a-month PeoplePC Internet service in the past three months.
>> Julian King, vice president of marketing for PeoplePC, says EarthLink
>> believes that discount services will eventually comprise 30% of the
>> Internet access market.
>> Even though the dial-up market is shrinking, most Americans still use
>> dial-up service, and the business is enormously profitable for America
>> Online, which needs the cash from that business to fund its turnaround
>> effort.
>> America Online's main strategy for keeping its subscribers from
>> defecting has been to add more exclusive features to its flagship
>> $23.90-a-month service, such as junk e-mail filters and sneak peeks at
>> new movies and TV shows. Another strategy has been providing access to
>> online magazines such as People and Entertainment Weekly owned by its
>> parent, which on Thursday will officially revert to the Time Warner Inc.
>> name and the TWX stock symbol it used prior to the 2001 merger with
>> America Online.
>> Efforts to craft a discount strategy have been under way for some time,
>> with the company quietly testing a product called "CompuServe Basic" for
>> $9.95 a month. It offered the service to customers who called up and
>> said they wanted to quit because the price was too high. People familiar
>> with the situation say the product was successful but research showed
>> that customers preferred Netscape to the CompuServe brand. CompuServe
>> was a pioneering Internet service that was bought by America Online 
>> in 1998.
>> Netscape Communications, which was bought by America Online in 1999,
>> created one of the first pieces of software that allowed consumers to
>> surf the Web. The company lost its technological lead in the
>> Web-browsing software market to Microsoft Corp. and fought a
>> well-publicized legal battle against Microsoft that was settled out of
>> court this year.
>> "The brand still has incredibly strong awareness, very strong positive
>> attributes with consumers," says an AOL executive familiar with the
>> situation. "We decided to go with it because the name recognition and
>> brand awareness gets us down the road so we don't have to do as much
>> advertising up front."
>> America Online is also hoping that using the Netscape brand will help it
>> avoid cannibalizing its own customers. According to people familiar with
>> the situation, the online unit was encouraged by the CompuServe test,
>> which showed that customers who signed up for the discount service would
>> have otherwise quit the service. "The AOL brand is not impacted by this
>> at all," the executive says.
>> Write to Julia Angwin at julia.angwin@wsj.com
>> Updated October 14, 2003 9:53 a.m.
>> -----------------------------------------------------------------------------