From BusinessWeek Online, December 7, 1998 Issue:....an article on AOL's tender hand at courting and marriage...Read it...I say it's a marriage that will work....
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AOL: THE ART OF MAKING DEALS WORK
The ICQ Web site and its instant messaging software (which stands for ''I seek you'') took off by word of mouth among the very techno-elite who shun America Online Inc. So it's little wonder that when AOL scooped up ICQ's Israeli-based parent for $287 million in June, the critics howled. ''AOL will turn off all the talented techies working there,'' they whined. ''They'll lose the site's following.''
Wrong--at least so far. To date, none of the ICQ talent has bolted, and ICQ has reported growth rather than decline for the site. Yet with AOL's most recent partnership with Sun Microsystems Inc. and Netscape Communications Corp., the same questions crop up. These are bigger partners, more used to getting their own way. Will it work?
When it comes to acquisitions, AOL has a plan--and follows it. Borrowing heavily from the world of cable, where each channel is allowed to serve its own niche, AOL has been assembling a portfolio that addresses different audiences. Thus, each unit requires its own flavor of marketing and management styles. The guiding principle: Let acquisitions retain their identities. What this ends up meaning is that subsidiaries keep their own headquarters. Just as CompuServe Inc., acquired by AOL in February, has remained in Columbus, Ohio, so will Netscape stay based in Mountain View, Calif. And AOL companies frequently employ their own marketing techniques. How else can you explain a parent that can be umbrella to ICQ and the much stodgier CompuServe--and succeed with both?
But AOL is not a total free-for-all. Each unit ultimately reports to an AOL exec. And there are signs of AOL creep: CompuServe's upgraded version is more user-friendly and includes instant messaging a la AOL.
By Catherine Yang in Washington
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