August 10, 1996 7:00 AM PDT

AOL crash: more hype than harm

Lee Underwood remembers a time when television stations would go dead for hours at a time. No I Love Lucy.

But Underwood, who is now an entrepreneur starting up an adult online bulletin board, doesn't remember folks chucking their sets in frustration or swearing off television just because they missed an episode or two of a sitcom. TV was too good, too promising.

The same is true with the Internet. That's why a lot of experts are saying that despite the media scare stories surrounding the 19-hour crash of the world's largest commercial online service this week, the Internet as we know it will not die or even be wounded, for that matter. In fact, industry analysts doubt that America Online will be harmed in the long run, despite a stock drop of more than four points two days after the so-called Black Wednesday.

Why? The online world "is too compelling," said Kevin Dugan, a consultant for Internet service providers. "It's too addictive."

To be sure, AOL's much-publicized crash will have some lingering effects. A few would-be newbies might decide to stay away after hearing about the outage, for example, and that might hurt subscription growth that companies like AOL depend on.

"When you're dealing with novices where ease of use is of the highest importance, you have a problem like this and the impact is going to be much bigger than on anyone else," said Andrea Williams, an analyst with investment firm Volpe, Welty.

Some people who rely on email and the Internet in general for business might be scared enough by the possibility of a similar crash by their service provider to get a second online connection, just in case.

Others may decide to leave AOL's closed network for the public domain of the Internet, and some ISPs are licking their chops in anticipation of those customers fleeing into their open arms.

The crash, said Ryan Fitch-Davis, a jubilant vice president of a start-up ISP, "is very good for me. I was very happy to hear that AOL is having trouble."

But the real good news is for users: The outage generated such bad press for AOL that it has scared other online companies into checking and rechecking their own backup systems to stave off the same kind of outage.

"It has an effect on us given that it stresses the need for a fail-safe," said W. Casey Cuddy, a product manager with Quote.Com, a stock information service.

For the most part, however, experts don't think Black Wednesday will have much of a long-term effect on consumers and their confidence level in online technologies, despite dire press reports about the crash or a general overreliance on email and other online communications.

"I don't think the AOL incident is going to have one iota of effect on consumer trust of the Internet," said Jeff Bezos, founder and CEO of Amazon.com Books, an online bookstore.

The Internet is still in its infancy, he and others said, and almost everybody understands that.

"Everybody knows that technology is unreliable, even people who don't understand technology," Bezos said. "If the value is high enough, they'll use it anyway. The Internet didn't just get unreliable two days ago. The Internet has been unreliable all along and, despite that fact, the number of people using it grows every day by a huge number."

As Dugan put it, "We're all beta-testing the Internet." The few people who didn't realize that before will surely understand it now.

"Any complex system is going to crash occasionally," said Dustin Huntington, president of Expert Systems Software and Services. "People are going to have to learn that that's how things happen. Their car breaks. Their plumbing's going to break. Their computer's going to break, and the network is going to go down."

If there is any lingering effect from Black Wednesday, it will be to teach both new and experienced users of the Net and online services to adapt to the occasional emergency.

"If you live in California and there's an earthquake, everyone doesn't all of the sudden abandon California," said Jeff Schafer, a CompuServe spokesman. "You may find a house that's more sturdy."

Related stories:
AOL stock down after blackout
AOL mystery explained
AOL back online--a day late
AOL leaves wilds of Nasdaq
AOL is doing just fine, thank you
AOL stock falls after negative reports

 

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