January 7, 2004 9:00 PM PST

AOL launches Netscape ISP

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After two years of bulking up its online service with ever louder bells and whistles, America Online is bowing to Internet consumers who have more minimalist tastes.

On Wednesday AOL launched its anticipated Netscape discount Internet service in a move to attract people who want nothing more than access. As previously reported, Netscape will charge $9.95 a month for unlimited dial-up access and a few additional perks, such as an e-mail account, a Google search bar and links to Netscape's home page, all packaged on a persistent toolbar that resides on a Web browser.

In the past, AOL executives have shied away from taking a bold step toward offering a discount Internet service. That's because most of AOL's users have been willing to pay $23.90 a month for its standard dial-up service and the many features associated with it, such as instant messaging.

But for two years, AOL's hold on Internet users has loosened, largely as the result of people upgrading to faster broadband connections such as cable or DSL (digital subscriber line), or jumping to cheaper dial-up alternatives such as United Online's NetZero. AOL no longer envisions itself as a broadband access provider, opting instead to sell a flashier version of its service to broadband customers for $14.95 a month, on top of whatever they're paying for their high-speed connection.

The launch of Netscape, a brand once associated with its Web browser legacy, does not mark the first time AOL has experimented with a discount ISP. AOL has offered discount versions of its CompuServe service as a way to keep subscribers from quitting. The CompuServe product cost $9.95 a month, but its usage was capped at 20 hours. AOL still runs an ISP with Wal-Mart Stores that costs $9.94 a month.

AOL is not the only Web giant that is launching new versions of its service. Also on Wednesday, Microsoft launched MSN Premium, a version of its online service that it hopes to sell to broadband users.


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