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

To: Vendit™ who wrote (5451)	2/22/1999 4:31:00 PM
From: Vendit™	Read Replies (3) \| Respond to of 41369

AOL pursues multi-brand strategy Biggest success may be hip ICQ deal, the anti-AOL Update: 3:17 PM ET Feb 22, 1999 SAN FRANCISCO (CBS.MW) -- America Online, arguably the most powerful brand name in cyberspace, isn't resting on its laurels.Just as Coca-Cola also sells Sprite and Lipton Iced Tea, AOL (AOL) plans on targeting different segments of the online crowd with other branded services, a top executive told money managers Monday Examples of this multi-brand strategy include CompuServe, focused on serving a more professional, more male audience, and Netscape (NSCP), a brand with a strong corporate presence. But perhaps the most stark example of AOL's multi-brand intiatives is ICQ, an instant messaging service used by more than 6 million Web heads a day. The company officially released a new version of ICQ user software on Monday. Ted Leonsis, the president of AOL Studios, described the average ICQ user as nearly the complete opposite of how most people view the AOL brand. "Young ... hip ... Web-savvy." "The average ICQ user doesn't want to talk to the AOL customer right now," he said at the Robertson Stephens technology conference in San Francisco, noting there's only a 6 percent overlap of AOL and ICQ users AOL bought the Israeli-based ICQ last year for more than $400 million. At the time, many analysts scoffed at the purchase price, citing the fact that the company didn't have any revenue. Now that Yahoo has bought GeoCities (GCTY) for $5 billion, the deal looks like one of the smartest Internet purchases made to date. "It's one of those cases where most people don't really get it," said Ryan Jacob, portfolio manager of The Internet Fund. "It's given them a great young ... and international presence." According to Sefi Vigiser, one of the original twentysomething founders of ICQ, AOL did the smartest thing by letting the brand thrive on its own. "The magic needed to be kept in place," Vigiser said. "We found the perfect partner [that was] willing to understand the community and also had a tremendous back-end infrastructure to support it." The new version of the software begins to leverage the gigantic user base by creating a new portal site, with all the necessary advertising and commerce partners. But Vigiser said the service's commercialization is being done in a way that shouldn't offend the anti-brand ICQ user. For example, ads are only delivered when a user goes to the ICQ Web site and not to the client that sits atop a user's desktop. ICQ is adding 85,000 to 90,000 new users every day with a marketing budget of zero dollars, Leonsis said. More than half of the user base comes from outside North America. Leonsis said ICQ fills the gap that was left when AOL went mainstream. AOL, which enjoys nearly 100 percent brand awareness among Americans according to a recent CBS MarketWatch poll, has more than 16 million members and is adding 1 million new members every 40 days, Leonsis said.