Read on for a fantastic reversal of last August's AOL-vs-MSN 'bundled
single-click access' debate...
Anyone awake at the FTC?
Rohit
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One Day After Striking Deal With Netscape, AOL Forms Major Alliance With
Netscape's Chief Rival, Microsoft
One day after making a deal with Netscape, America Online announced on
Tuesday an even broader strategic alliance with Microsoft, the company which
is fiercely competing with Netscape for dominance in the Internet browser
field.
Under the agreement announced by AOL's chairman and chief executive, Steve
Case, Microsoft will become AOL's primary Internet partner. It will provide
its more than 5 million subscribers with Microsoft's Internet Explorer
browser, which will be built into the floppy disks that AOL provides. Even
more significantly, Bill Gates, the chairman and chief executive officer of
Microsoft, confirmed that later in the year, when a new version of the
Microsoft operating system known as Windows '95 is distributed, AOL will be
embedded in the software so that users can become AOL subscribers simply by
clicking.
This underscores the rapid changes in the computer industry. Just last
summer, Microsoft was touting its own Microsoft Network as a rival to AOL and
other proprietary on-line services. Now the Microsoft Network, with less than
one milion subscribers is no longer a serious competitor to AOL.
It appears as if Netscape, which currently has the largest share of the
browser market, will be an option for AOL users, but that the Microsoft
Internet Explorer will be the "default" browser that comes with the disks.
Gates said the deal with AOL will not have a significant impact on the
financial flow between the companies but was a strategic alliance. Case said
that the agreement with Netscape was targeted more to the subscribers of AOL's
GNN Internet access service. He stressed that regular AOL users can select
_Netscape Navigator_, but that the Microsoft Explorer will be built into the
AOL software. In Nasdaq trading Tuesday, America Online was up 7 1/8 at 55
1/2, Microsoft was down 3/4 at 95 3/4, and Netscape was down 1 at 45 1/4.