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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: dorsilfin who wrote (23141)	6/18/1999 8:27:00 PM
From: puborectalis	Read Replies (2) \| Respond to of 41369

Just released....America Online May Unveil Free Service in Europe to Counter Rivals' Gains By Aimee Picchi America Online May Soon Unveil Free Internet Service in Europe Dulles, Virginia, June 18 (Bloomberg) -- America Online Inc., the largest online service, said it may introduce free Internet access in Europe to combat Internet service providers that are giving it away and threatening AOL's subscriber growth. One AOL rival, Dixons Group Plc Freeserve Internet service, took only three months since it started in September to steal the No. 1 ISP title from AOL in the United Kingdom by offering free Internet access. AOL will offer a free online service in Europe if the free ISP market continues to be a sustainable business model, AOL spokeswoman Ann Brackbill said. America Online could use its recently acquired Netscape brand to offer a bare-bones Internet service or add an online connection to its ICQ free instant messaging service, which is popular in Europe, analysts said. Free Internet access works in Europe because phone companies share revenue from per-minute charges with the ISP. Consumers in the U.K. end up paying the phone company for their monthly per-minute Internet use, while users in the U.S. pay a flat monthly fee to online services. ''AOL will come out with an offering to counter (Freeserve). They'll do a free offering,'' said William Blair analyst Abhishek Gami, who rates AOL a long-term ''buy.'' Because of Freeserve and other free online services, AOL will report lower-than expected international subscriber growth for its fiscal fourth-quarter, analysts said. Many analysts had expected AOL to add 150,000 to 300,000 European subscribers in the current quarter. The company is more likely to add only 50,000 to 75,000 because of the free ISP offers in Europe, said Dan Chung, an analyst at Fred Alger Management, which owns AOL shares. In Europe, a local phone company retains between 33 percent to 60 percent of the per-minute charge, with the remainder going to the network operator. That revenue can then be shared with the Internet service provider. America Online has about 2.1 million international subscribers, Gami said. Dulles, Virginia-based AOL has more than 17 million subscribers worldwide. AOL shares rose 1 5/16 to 112.