AOL's multiple portal strategy
Three portals are better than none. That's America Online's philosophy, according to its president, Bob Pittman.
Today, the executive reaffirmed the online giant's concerted push to develop a multibranded portal strategy after the company beat Wall Street's earnings expectations.
AOL will build up three of its online properties--AOL.com, CompuServe, and the recently acquired ICQ chat client--into Internet gateway contenders in one of the Net's most competitive spaces, Pittman said during a conference call with analysts.
He also rehashed previous plans to position the ICQ platform while leveraging its audience base into a portal offering. In June, AOL acquired Mirabilis, the developers of ICQ technology, for $287 million in cash.
Instead of lumping all three properties into one site, AOL is hoping to leverage its acquisitions by marketing them as separate services catering to unique markets. The company comes with an advantage over others pursuing the same strategy: It can beef up the other services with existing resources instead of having to start from scratch.
"The idea is that we can use [AOL's] infrastructure to build other products," Pittman said in an interview with CNET News.com. "It winds up letting us not only go after the mass market with AOL, but also to go after targeted markets with CompuServe, with ICQ, with AOL.com, and with AOL Instant Messenger so that we can begin to fill in other holes in a very cost-effective way."
AOL began creeping over the proprietary fence and onto the free Web when it began building up its AOL.com site last October. Since then, AOL.com has undergone many changes, as seen with its redesign and the addition of more "sticky" portal offerings, such as a personalization service and a home page builder.
Industry observers and analysts have weighed in on AOL's ability to succeed in the free space, in comparison with its dominance as a proprietary service. Some say AOL is late to the party and could have attracted more users if it had revamped AOL.com earlier. Others are confident that AOL's massive audience will ensure a spot at the top of the heap.
The idea behind multibranded portal strategies is to attract more advertisers to a family of compelling platforms. Other portal companies have a similar approach, such as Excite with its additional WebCrawler service.
While both companies say each property is aiming at a specific demographic, some observers question whether the sites will unintentionally compete with each other for coveted advertising and commerce partnerships.
Multibranded strategies also have caused concern among dedicated users of the services purchased by the new parent company. For instance, many ICQ subscribers feared that AOL would use the opportunity to compel or even force users to join AOL's proprietary service.
CompuServe customers also were concerned when AOL purchased the service.
When asked about whether AOL would use the different properties to boost membership, Pittman said no. "We would like them never to know that those products are owned by the same company," he added.