On-line Mergers Mean More Infotainment
The on-line world is in the midst of one of those tectonic shifts that causes earthquakes for the industry and opportunities for the consumer.
The current tremor involves CompuServe, once the dominant on-line service. Last week, its parent company, H&R Block Inc., formally announced the service was up for sale. No matter who buys the company, the sale will merely confirm the consolidation already under way in the industry.
Of the Big Four on-line services, only two - America Online and Microsoft Network - have the size and financial clout to attract the mass market of consumers. And in targeting that mass market, they're pushing the on-line world away from its information roots and toward an entertainment future.
What do they have in mind? Maybe this: You watch a cooking show on a computer screen instead of a TV. The recipes are easy to call up and print out. Extra help is as close as an on-line forum. Sports? Video highlights-cum-sports almanac. Shopping? On-screen you ogle, then order.
Sure, you'll still log in to check stock quotes, and your children will use the on-line encyclopedia. But the family also could be lured away by any-time "soaps" and cartoon Internet sites. It will be another victory for "infotainment."
What's significant for consumers now is that, like the early days of television in the United States, only two networks look capable of delivering it: America Online and Microsoft. Prodigy doesn't have the size. And no one is quite sure what's going to happen to CompuServe.
On the face of it, a choice of two doesn't sound like much of a choice at all. But consumers will benefit indirectly from having two strong competitors in this new on-line genre. One is cost. If these on-line networks can attract audiences large enough to attract advertisers, then users won't have to pay the entire cost of on-line access. If the audience turns out to be huge, advertisers may gladly foot the entire bill.
Another benefit is ease-of-use. By highlighting and organizing the best sites available on the Internet's graphically rich World Wide Web, on-line services make it simple to navigate cyberspace. "They act as the consumer's filter," says Scott Reamer, an analyst with investment bank Cowen & Co., based in Boston. "The general mass market does not have the time or the patience to use a search engine [an on-line index] every night to find entertainment on the Web."
Of course, consumers who prefer their Internet unfiltered will still be able to get it through Internet service providers. If you're considering hooking up to the Internet, consider carefully what type of on-line consumer you might be. Do you want the extra bells and whistles of on-line services? Or would you be doing something unusual that on-line services might not accommodate very well?
For example, although America Online appears to have overcome the service overloads that got it into hot water with users earlier this year, it has not fixed other problems. Some Macintosh-using members complain they still cannot read long electronic-mail messages despite months of complaints to the company.
For CompuServe users, the outlook is uncertain. America Online was rumored to be buying the service, but analysts say that's unlikely. A better fit would be with Microsoft Network because CompuServe's 3 million members, added to Microsoft's existing 2.2 million users, would more seriously challenge 8-million-strong America Online. But analysts say other parts of CompuServe's business don't fit well with Microsoft.
So someone else, perhaps a telecommunications company with deep pockets, may step in to buy CompuServe and make it a challenger - again - to the Big Two of the on-line world.
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