Click here to visit a guide to hundreds of financial links!
Click here to visit a guide to hundreds of financial links!
By Richard Morochove
First published August 5, 1999
By Richard Morochove
The battle for desktop software is over and has been for years. No one company can take on Microsoft and win in that arena. However, there's an interesting battle brewing for control of Internet services. Microsoft isn't necessarily leading.
Here the rather unlikely challenger is America Online. Increasingly the two are battling it out, most recently in instant messaging services, as discussed last week in this column.
Late last week Microsoft, Yahoo and other bit players in instant messaging sent an open letter to AOL's CEO Steve Case, asking him to meet with them to work out a way to permit them access to AOL's two instant messaging systems, AOL Instant Messenger and ICQ.
The letter all but accuses AOL of using unfair business tactics to shut out competitors and protect its near-monopoly position. Of course, Microsoft would never engage in such practices.
Yet this highlights one of Microsoft's strategic blunders. The software company fumbled the opportunity to buy Mirabilis and its ICQ instant messaging system last year. AOL's purchase of the company locked up its ownership of instant messaging.
Microsoft boasts that it now has 700,000 users of Microsoft Messenger Service. That's pretty good for a week-old service but, to put that in perspective, it represents less than one per cent of AOL's instant messaging users.
Microsoft and AOL compete in other aspects of the Internet, too. AOL's acquisition of Netscape Communications pits the two giants against each other with competing Web browsers, Internet server software and Web portals. The Microsoft Network, at least in the U.S., provides dial-up online access to the Internet that competes with AOL's core service to its members.
One of the keys to winning this battle for Internet supremacy will be delivering a wide array of Internet services that help cross-promote each other. I'm sure that's part of the logic behind Microsoft's acquisition of LinkExchange last year.
In addition to its popular banner exchange that helps small Web sites advertise their services, LinkExchange also brought a host of other services to the Microsoft fold.
For example, there's ClickTrade, which lets businesses build affiliate programs to increase sales by rewarding referrals from other sites. The Submit It! service will register your web site to about 400 Internet search engines and directories. ListBot lets you put a form on a Web site so visitors can subscribe to an e-mail list.
By contrast, AOL has been slow to explore the business side of the Internet.
AOL was of the first proprietary online services to permit reasonably free access to the Internet. I'm convinced that CompuServe's slow and hesitant move into Internet connectivity was a major factor that led to its downfall and eventual buyout by AOL.
However, AOL's linkage to the Internet looks increasingly dated. For example, its mail client doesn't operate like most others today. Entering a web site such as www.morochove.com will result in a clickable hot link in most e-mail clients, but not in AOL's. One e-mail list for electronic newsletters recently recommended that newsletter publishers create a separate version for AOL subscribers that's formatted for AOL's peculiar requirements. That oddball AOL software is one of the reasons experienced Internet users leave AOL for Internet Service Providers that use standard software.
While Microsoft has taken over many companies and successfully integrated their technology, AOL hasn't had a great history of successfully exploiting its acquisitions. CompuServe continued its decline since AOL bought the online service. What great new products has Netscape released since AOL took control?
I think the next great Internet battle will be in streaming media, providing Internet users with music and news reports. Streaming media hasn't taken off as quickly as I expected because it's of generally poor quality on a dial-up 56 Kbps Internet connection.
However, I predict the wider availability of inexpensive high-speed Net hookups provided by cable modems and the phone companies' DSL (Digital Subscriber Line) service will improve the picture. Streaming video is very viewable if you download it at 500 Kbps.
AOL now has a foothold in the fast-growing world of online music, with its acquisitions in June of music site Spinner.com and Nullsoft, developer of the Winamp MP3 player and ShoutCast MP3 streaming application.
However AOL lacks a presence in the broader world of streaming media, applications used by radio stations for round the world broadcasting on the Net and by television networks such as CBC Newsworld to provide online video clips.
Here, Real Networks and its Real Player system is king, with Microsoft an also-ran. Ironically, Real Networks CEO Rob Glaser is a former Microsoft employee who started his company when Microsoft appeared indifferent to the prospects of streaming media. Now, according to Real Networks, its software is used to deliver content on more than 85% of all streaming media enabled Web pages.
What's my advice to AOL? Get Real! Buy out Real Networks and win the battle for streaming media. CW
Richard Morochove, FCA, is a Toronto-based computer consultant.
Copyright ©1999 by Morochove & Associates Inc. All rights reserved. This work may not be copied or distributed by any means without our prior written permission.
Join the Can-AccTech discussion forum today. It's free!
Visit the
ComputerWatch Archive to see more columns
Post any questions or comments about this article to