Online Partners is not the only site to walk away from a contract over this issue. The Pet Care Forum, a 10-year content tenant on AOL, says its relationship ended after it was served restrictions in selling advertising to companies determined to be competitive.

"They won't let you sell advertising to a competitor," said Paul Pion, president of the Veterinary Information Network, which ran the forum. He said he asked for a list of competitors but was denied.

The terms of the negotiations kept changing along with AOL's evolving business model, Pion said, and talks finally collapsed shortly after the Pet Care Forum's contract expired at the end of 1998. He accused AOL of abandoning sites like his in favor of advertising and e-commerce because "community didn't pay."

A similar story is recounted by Craig Goldwyn, vice president of Tastings.com, which was formerly called the Food and Drink Network on AOL. A content tenant since 1989, the consumer reviews site used to get a cut of royalties to remain on AOL's service when members were charged by the hour for access.

But once it switched to flat-rate subscriptions, Goldwyn said AOL suggested that the site move to the Web. Then AOL informed Food and Beverage that it would take over their areas on AOL and essentially evicted them in February 1999 after a series of renegotiations, he said.

"I think AOL was trying to build a profitable business by owning the most valuable real estate, and they didn't want to stab long-standing partners in the back, so they gently eased us out without really telling us what they were doing," Goldwyn said. "I do not believe they're ogres. I just believe they're hard-nails, smart business people."

Legal experts tend to agree, saying that the courts give companies wide latitude to set contract terms unless they are found to be a monopoly. And as investigations into other market leaders have shown, strong-arm tactics are hardly unusual throughout the Internet and high-tech industries.

"They can pick any criteria that they want, as a general rule," said Jesse Markham, head of the antitrust department at law firm Orrick, Harrington & Sutcliffe. "The right to choose one's partners and contract parties is an unlimited right."

He said AOL's practice in barring advertisements from potential competitors seems sensible, especially on the relatively nascent Internet. "If Newsweek wants to put in a full-page ad saying, 'Get a free year's subscription,' Time would say, 'No way!'" Markham said.

Jupiter Communications analyst Patrick Keane agreed, saying, "I don't think this is unique to the Internet." However, he added, "All these little things are going to be amplified because of the merger with Time Warner."

Others may be priced out of AOL
Regardless of legal issues, other analysts say the high price of AOL real estate could inspire rebellion. If content and commerce companies do not see an adequate return on investment, many could go to other ISPs for distribution, Yankee Group analyst Emily Meehan warned.

"We will see content merchants not renewing their deals because they may not be able to afford to stay on AOL's start page," Meehan said.

In inking content or commerce partnerships, companies typically pay AOL millions of dollars over a fixed period to be featured exclusively or prominently on its service. For example, in July last year, online health site Drkoop.com agreed to pay AOL $89 million over four years for such placement. In October, Stamps.com agreed to pay $56 million over three years as AOL's exclusive postage provider.

To veterans like Pion, AOL's behavior reflects the Internet's evolution from community to commerce. The online giant, which once paid his Pet Care Forum and other site thousands of dollars a month to remain on its service, has been cutting ties with smaller-scale content partners viewed as extraneous.

Pion acknowledged the sound business reasons behind AOL's actions, but he disagrees with the way the company has quickly turned away from smaller partners that contributed to its growth.

"They grew it on the backs of these people," Pion said. "There's a nicer way of doing it." 

News.com's Jeff Pelline contributed to this report.