AOL offers discount ISP peek

America Online has launched a preview version of its upcoming Netscape discount Internet service, revealing a slimmed-down, no-frills service aimed at people who just want access.

The Netscape Internet service will be available on a trial basis for $1 a month until March 2004, and then the price will change to an established rate of $9.95 a month.

AOL in October detailed plans for a discount Internet service provider to test the consumer appetite for service that costs considerably less than its flagship product, which costs $23.90. The move highlights AOL's attempt to hold on to the many subscribers who are defecting from its service to speedier broadband providers and discount ISPs. AOL has lost hundreds of thousands of U.S. subscribers during the past few quarters and is expected to continue losing more, as households keep upgrading to broadband.

In response, the company has tried to sell a version of its proprietary service for broadband users. This "bring your own access" product offers all the bells and whistles of AOL--but without the Internet access--for $14.95 a month. AOL hopes that the product will be appealing enough for broadband users to pay the additional subscription fee for more content and multimedia perks.

The launch of the new Netscape service is AOL's attempt to woo bargain hunters. Companies such as United Online's NetZero and Juno Online have seen success in attracting discount ISP users.

This is not the first time AOL has launched a discount ISP. AOL currently has a plan through its CompuServe subsidiary that costs $9.95 for 20 hours a month, and its partnership with Wal-Mart Stores offers dial-up Internet access for $9.94 a month. In addition, AOL has quietly begun offering a stripped-down version of CompuServe for $9.95 a month with a no-term limit to customers trying to defect. AOL could eventually swap out that CompuServe offering for the Netscape-branded service, according to a source close to the company.

As expected, Netscape doesn't come with AOL's splashy graphics or its emphasis on multimedia content. Nor does it have AOL's popular instant-messaging software.

The crux of the service centers on a persistent toolbar that launches across the top of screen. The toolbar contains an e-mail feature, a Web search bar, the familiar Netscape logo from its Web browser days and links to the service's home page.

The home page is sparse, containing text news headlines, a Google-powered search bar and some promotional links on the margins. The e-mail service features 10MB of storage, an address book, folders and a message search tool.