October 15, 2003
Hoping to at least slow the rush of AOL customers towards the exit, America Online Inc. will launch a new discount Internet service to compete with Juno, NetZero and other low-cost providers.
The $9.95-per-month service, debuting early next year, will use the Netscape brand and will provide users with a single e-mail address. It's similar to two other discount AOL services -- CompuServe and Wal-Mart Connect, which sells for $9.94 per month.
AOL, which sells for $23.90 per month once you get past all the promotions and supposedly free trials, has lost more than 1 million customers in recent months. Though some are defecting to broadband providers, many are going to cheaper dial-up services, primarily Juno and NetZero, both owned by United Online.
Despite its losses, AOL remains the largest Internet service provider with about 25 million U.S. subscribers, though United Online has been growing fast and now has about 2.6 million.
AOL says it will market the new service primarily to AOL customers who call to cancel their AOL service. It will also promote it to those visiting the Netscape site.
AOL has long made it difficult for subscribers to cancel and recently offered to settle federal charges that it continued billing subscribers who had closed their accounts. It's impossible to close one's account online. Customers must go through a complex telephone procedure that pits them against customer service reps whose mission is to persuade them to keep their subscription active.
