The move seems logical, given that AOL’s subscription base, which pays $23.90 per month in the US, has been eroding for the last few quarters, while upstart formerly free ISPs such as United Online Inc [UNTD] have been seeing their customer numbers rise.
UOL, which grew its subscriber base by a net of 142,000 to 2.55 million during the second quarter, took a predictable dive. EarthLink [ELNK], which recently got into the discount business by buying PeoplePC, dropped 7.5%.
There is a precedent for such a move by AOL. In summer 1999, the company’s UK arm launched a discount service, which used the Netscape brand, after intense pricing pressure from subscription-free ISPs such as Freeserve.
This article was based on material originally published by ComputerWire.
