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
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,
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
"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
they have been selling themselves. They need to explain what value
they bring in addition to access to the Internet and the World Wide
Unlike the service providers, who typically offer home computer
users access to the Internet but little else, the commercial on-
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
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. …