America Online plans to introduce a discount version of its dial-up internet service early next year that will carry the Netscape brand name.
The new service is expected to cost $9.95 (£6) a month for unlimited access to US users, a big reduction from the $23.90 monthly tag that comes with AOL's current dial-up service, which has seen its subscriber numbers fall. The new plan would also beat the $14.95-per-month package AOL is pushing to people who get their internet access from a separate broadband provider.
However, executives at Dulles, Virginia-based AOL, part of AOL Time Warner, don't believe the new Netscape discount service will siphon away bigger-spending customers after it is launched in the first quarter of 2004.
The plan is instead targeted at people who want only bare-bones internet access and are considered unlikely to spend more on higher-end packages, according to the AOL source, who spoke on condition of anonymity.
For example, the slimmed-down service will not offer the parental controls or exclusive content found on AOL's main service. And while AOL now lets subscribers have up to seven different email accounts, the Netscape package will carry only one screen name and email address.
The plan was first reported yesterday in the Wall Street Journal. The discount plan amounts to the latest acknowledgment that AOL needs to do more to keep its 25.3 million internet access customers from fleeing - after losing 1.1 million worldwide in the first half of this year.
Internet users are being enticed at both ends of the price scale, not only by cheaper dial-up services like those offered by United Online and Earthlink, but also to much faster DSL and cable-modem services that in some cases have fallen below $30 a month because of competition.
By using the Netscape name for the new service, AOL will be reviving a brand associated with the internet explosion of the 1990s, when Netscape's Navigator browser introduced millions to the burgeoning world wide web.
AOL bought Netscape for $10bn in 1999, as Microsoft's rival Internet Explorer was surging past Netscape to become the dominant browser. AOL sued Microsoft for allegedly using anticompetitive practices to achieve that dominance; Microsoft settled with AOL Time Warner for $750m this year.
