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October 26, 1997

AOL continues
dominance despite problems

By Timothy C. Barmann

My jaw dropped when I saw the survey.

It said nearly half of Rhode Island households that connect to the Internet do so through America Online.

That's the same company that caused such an uproar earlier this year when it signed up more subscribers than its network could handle.

AOL customers complained they got only busy signals when they tried to get through. Yet AOL continued to collect their $20 a month anyway.

That got the company into trouble with the attorneys general of 36 states, including Rhode Island. (AOL eventually agreed to give refunds to some users.)

It's also the same service that long-time AOL supporter Robert Seidman, an Internet columnist who writes Seidman's Online Insider, says he would no longer recommend. He wrote in his electronic newsletter of Oct. 12 that AOL has unreliable access, unreliable E-mail delivery from the Internet, slower Web browsing and delivers more unwanted spam E-mail.

But despite its troubles, AOL is as popular as ever. It recently surpassed the 9 million subscriber mark and its revenue chart looks like a fast-rising mountain.

Even with all the complaints, the service is enjoying widespread popularity in Rhode Island. A survey taken over the summer found that 46.8 percent of Internet-using households were AOL subscribers. The survey was taken by University of Rhode Island's Research Institute for Telecommunications & Information Marketing.

AOL's success is not for lack of alternatives. Besides the other national on-line services and Internet access companies, such as Prodigy and CompuServe, Sprint, AT&T and Netcom, there are about 12 Rhode Island-based companies that will hook you to the Net as well.

One of the largest of these local companies, InteleCom Data Systems of East Greenwich, accounted for only 1.8 percent of all households. (The survey has a margin of error of plus or minus 4.9 percent.)

AOL's tremendous popularity is an amazing feat by any company, let alone one that has suffered a public relations disaster such as the one of last winter and spring.

AOL's foothold in Rhode Island is so strong that its market share is now higher than that of soft drink giant Coca-Cola. Coke's products account for about 43 percent of the carbonated soft drink market, according to February's Beverage Digest. AOL recently announced it will acquire CompuServe, which will bring its numbers even higher. CompuServe is used by 6.3 percent of Rhode Island households, according to the URI survey.

AOL appears to be even more popular in Rhode Island than elsewhere. According to another survey by PC Meter, a Port Washington, N.Y., market research company, 38 percent of Internet users nationwide are AOL subscribers. That survey was taken in April.

What is the secret to AOL's success? One reason has to be its gargantuan marketing efforts. The company has bombarded just about everyone's mailbox with disks and CD-ROMs that contain free access software. (In fact, there are a host of Web sites by people who describe alternative uses for the disks, including making them into pieces of art.)

Beyond its marketing push, AOL makes it easy to get on-line. Put in the disk and it works the first time. And Internet users like what they get from AOL.

Even Larry Groff, the 58-year-old Scituate resident who filed a class- action suit against AOL last January because of access problems, says he continues to use the service. (See related story for an update on his suit.)

One reason was that he didn't want to change his E-mail address, which would have been necessary had he switched.

Besides, he likes what he gets from AOL.

"I don't find anything wrong with the service," he said in an interview this week. "My only gripe was not getting unlimited access."

Getting on-line is better now than it was earlier this year, he said, though he still occasionally has trouble at 8 or 9 at night.

Local Internet service providers have a love-hate relationship with AOL. Some are nervous at AOL's dominance. But oddly, many have said they welcome AOL's marketing efforts.

"If anything, AOL and their push with their marketing have been responsible for bringing new customers on-line," said Andy Green, president of IDS.

Many former AOL customers "graduate" from AOL when they want a "full- blown Internet service" and turn to companies like his, he said.

But AOL seems unstoppable. If it can equal the service and reliability of many of the local companies, people who sign up for AOL may not bother to "graduate."

AOL hoax circulates

Several people have forwarded me a letter supposedly written by a former AOL employee who claimed that AOL's new software, to be released this fall, has a secret feature that lets company employees look at the files stored on a subscriber's computer. "How would you like somebody looking at your entire hard drive, snooping through any (yes, any) piece of information on your hard drive," the letter said.

The letter reads like a classic Internet hoax, and AOL spokeswoman Tricia Primrose said that is exactly what it is.

"We want to assure AOL subscribers and Internet consumers that this capability does not exist, there's no way to do it," she said. "We would have no interest in that type of capability."

Timothy C. Barmann is a Journal-Bulletin staff writer. His column runs every other Sunday on the Computers and Technology page. Send him comments via e-mail at tim@cybertalk.com or U.S. mail, c/o the Journal-Bulletin, 75 Fountain St., Providence, R.I. 02902.