Growth Experienced in Use of Direct Internet Service Providers

Article excerpt

A new survey of home computer users has found that, for the first time, more people are gaining access to the Internet through direct Internet service providers than through commercial on-line services like America Online or Compuserve, still substantially owned by H&R Block Inc. But the survey also found that most consumers are not very impressed with the on-line experience.

The findings of the semiannual Homefront survey by Odyssey of San Francisco represented a significant shift from just six months ago, and appeared to reflect both the growing popularity of Internet- access services like Netcom and AT&T Worldnet, and a growing disenchantment with the proprietary information services.

It found that 48 percent of all households connected to the Internet used an Internet service provider, compared with 35 percent who used a commercial on-line service. Six months ago, 54 percent of households with Internet access used a commercial on-line service, as against 30 percent for the Internet providers. Nicholas Donatiello, president of Odyssey, a San Francisco-based market research firm, said the numbers did not add up to 100 percent since many people did not know the name of their service provider. Underscoring the report, Pacific Bell Internet Services, a Pacific Telesis unit, said Friday that it had signed up more than 51,000 subscribers in the first 90 days it offered Internet connections in California, making it one of the fastest growing of the Internet service providers. "There are now lots of places to get information, and lots of ways to get onto the Internet," Donatiello said. "Commercial on-line services are going to have to sell themselves in a different way than they have been selling themselves. They need to explain what value they bring in addition to access to the Internet and the World Wide Web." Unlike the service providers, who typically offer home computer users access to the Internet but little else, the commercial on- line services create a self-contained world of services and features available only to paying members. These companies, of which America Online is the largest, offer Internet access as a supplement to their own proprietary content: features like chat rooms, forums on everything from investing to astrology to AIDS, airline schedules and stock quotes. But on-line bulletin boards can be reached directly through an Internet service provider and can also advise, inform and support people. And World Wide Web sites offer a panoply of choices, many unavailable through on-line services. The new survey appears to mirror recent reports of troubles throughout the consumer on-line service industry. While America Online continues to grow, despite highly publicized breakdowns and disputes over its billing practices, other on-line services report stagnant or declining membership. In the last year, Apple Computer pulled the plug on its eWorld on- line service, and AT&T did the same with its Interchange service. News Corp. abandoned Delphi Internet Services, and IBM and Sears, Roebuck abandoned their 10-year, billion-dollar joint investment in Prodigy. Even Microsoft, whose MSN Network was initially regarded as America Online's biggest challenger, gave up on the consumer model and rebuilt the system from the electrons up as an Internet service. …


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