Online services, long at war in the United States, are starting to get serious about fighting for customers in Europe.
CompuServe (CSRV) announced today that the company will beef up its marketing and product development in Europe, boasting that it has "nearly doubled its subscriber base over the past 12 months" in the region.
This comes just days after America Online (AOL) announced that AOL Europe is expanding service to Austria, Switzerland, and Sweden and has joined hands with Axel Springer Verlag, one of Germany's top media companies.
Springer will acquire a ten percent equity stake in AOL Germany. In turn, AOL will get marketing and content from Springer's 40 newspapers and magazines and extensive radio and television holdings. AOL spokeswoman Susan Porter would not disclose the value of the deal.
AOL also announced that it now has more than 300,000 members in Europe, a year after launching its first service in Germany. It launched services in the United Kingdom in January and in France in March.
CompuServe countered that it has better brand-name recognition in Europe and already has more than 850,000 subscribers, said Bob Massey, president and CEO of CompuServe, in a written statement. He added that the CompuServe subscriber base has grown more than 100 percent in the past year.
And the Microsoft Network also is taking aim at Europe, with services in the United Kingdom, France, Switzerland, and Germany.
When online services look toward Europe, they see a basically untapped market ripe for the kind of growth that the American market enjoyed in the early 1990s.
In early 1997, CompuServe plans to introduce enhanced products and services in Europe for the business, technical, and professional market.
While CompuServe has the most subscribers of any American online service in Europe, AOL has the largest cash flow in the United States to fund overseas ventures. AOL next plans to jump into the growing Japanese market, with beta testing beginning there by the end of this month, said Jack Davies, president of AOL International. The service will launch in spring.
"AOL has a strong desire to be ubiquitous," Davies said. "It's our goal to be present anywhere where consumers would want to have an interactive service."
The international expansion should help AOL reach its goal of 10 million members by the end of 1997, Davies added. Currently, AOL has 7 million members. In pursuit of that ten-million-member goal, AOL has also kicked off a $300 million marketing campaign and moved to flat-rate pricing plan.
Flat-rate pricing is not offered to international customers, a disparity that has drawn bitter criticism from Canadian members. But competition is not yet stiff enough to warrant flat-rate pricing overseas, Porter explained. In Europe, he said, "people are just starting to talk about the Internet and what online service providers are."