© 1997 j-dom Media. Contact us!Microsoft, as you might have guessed, has a bit of cash to spare and so have no problem buying the companies (and technologies) they fancy. America Online, as you might have guessed, has no spare cash and so doesn't buy companies, normally.
Well Microsoft has bought WebTV, no big surprises there. They already had an investment, it seemed like a good idea. Give internet access to the people who otherwise wouldn't buy computers for a low cost. Great, increase the number of customers on-line. The thing is WebTV users need to dial into a special Internet Service Provider, which competes with the Microsoft Network (to an extent). So that will probably get swallowed up into MSN. Then the fact that there only 50,000 subscribers shows that maybe it isn't such a great idea after all. Technology companies are desperate for the convergence they've been predicting. They want the TV and computer to come together, but is that realistic? TV viewing might become a subset of PC functions but its unlikely that PC functions will ever become a subset of a TV's abilities.
Microsoft are changing angle here. They are starting to play the hardware game, what with the Simply PC initiative, the buying in of the WebTV set-top box (which is really what Web-TV is about, the Internet to TV hardware), the introduction of WindowsCE hardware references. They're not making it yet, but they are setting the specifications more than ever before. Microsoft probably won't have any problems playing these new games but they might like to stay aware of the fact that people don't want to be buying new hardware every week to get bug fixes as is the case with Internet Explorer (ok, so its free, but you get my point!).
AOL, in the meantime, are posturing for a different angle of play. They're playing for peoples' minds. If they do buy CompuServe (their largest rivaling online service) they'll have access to a huge number of additional users as well as the extremely good sources of information that CompuServe has. Also CompuServe's infrastructure worldwide might help AOL's attempts at expansion. CompuServe is strong in Europe where AOL is weak. Of course you might say that if AOL can't cope with their current customers how are they going to cope with so many new ones? I think CompuServe, if bought, will provide some extra connectivity for AOL customers, a sort of mega bulk-modem buy for AOL to ease the pressure.
Whatever the outcome, after the dust has settled, we'll soon realise that this is only round one in what seems to be a busy year in the Internet business. e-mail me your predictions for the next feeding frenzy!
By Jeep
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