Earthlink Network Inc is in no danger of becoming a media company, like its nemesis America Online Inc believes it is, says founder and chairman Sky Dayton. Someone’s got to provide a great connection, he says, we believe that in itself is an entire business.
Michael McQuary, president and COO of MindSpring Enterprises Inc, who will be president of the new company once the merger announced yesterday is complete, says that the two companies each get more traffic than pure web plays like Ask Jeeves, GoTo.com and CBS Sportsline, according to Media Metrix figures. And free access is a non-starter as well, says the new Earthlink. Dayton and the other top executives dismissed the free and low-cost services driven by advertising as a non-growth model. That’s despite the fact that Juno Online Services Inc, which offers a free, ad-supported email-only service has more than six million members, more than three times Earthlink and MindSpring’s combined subscriber base.
With about 98% of the combined customer base paying the standard $19.95 per month for unlimited access – $2 less than AOL, incidentally – Earthlink says it will concentrate on looking after those customers for now. But it does also have broadband plans and between Earthlink and MindSpring, the two are already operating DSL services with Sprint, BellSouth and Pacific Bell; and trials with UUNet, Covad and GTE will start at the end of this year. There are also cable modem trials happening, or due to happen very soon in 10 markets served by Charter Communications as well as with Knology in the southeast. Earthlink believes that about 18% of its customers will be connecting through broadband services by 2003.
Both Earthlink and MindSpring are entirely US-centric companies, unlike AOL and it doesn’t look as though the new company will venture beyond these shores any time soon, especially with the free ISP model eating up AOL and other fee-based ISP in the UK.
