CompuServe Web effort to leverage strengths
Analysts say CompuServe's new Web-based offering for business and professional users, distinct from its two Net services, can't hurt the company.
That's how some analysts are viewing "C," CompuServe's (CSRV) new Web-based product that executives outlined today. (See related story)
The company is aiming to capture business-savvy, relatively more affluent, and more educated online users, which it estimates to be about 36 percent of the roughly 30 million people already on the Internet.
"For our audience, this is going to be the best addition to the Web for a very long time," said Sam Yuretsky, CompuServe's vice president of business management.
Executives at CompuServe emphasized that they are not doing the same thing that the Microsoft Network did when it moved its members onto the Web a year ago. Instead, CompuServe intends to launch the Web-based C service separate from its two existing services: its proprietary online platform, dubbed CSi, and its Internet access service called Sprynet.
They also said they could not talk about how this move would be affected by CompuServe's the pending sale to online giant America Online (AOL). The Justice Department is reviewing the sale for potential antitrust violations.
CompuServe has structured C so that there are three levels to the service. The idea is to get users to try the free areas, luring them there with deals with other Web sites and companies. Then it can work to draw them into areas where they actually pay for content.
The first tier will allow anyone a free peek into some content and forums, but they won't be able to participate. This tier relies on advertising alone to generate revenue.
The second level is called membership. That is also free, but requires registration with a credit card and gives users the ability to buy stuff off the Web. The transactions would give CompuServe a second revenue source.
The third tier require members to actually subscribe. For less than $10 a month, they would be able to access and contribute to all forums as well as browse proprietary information. Within that tier, members can also sign up to get extra communications packages, such as fax and messaging capabilities, and get special information aimed at computer professionals.
But don't expect C, to be launched by the end of December, to shake up the Internet landscape. While it might attract business and professional users, analysts don't expect its impact to be profound.
On the other hand, CompuServe has little to lose and everything to gain by making this offering. "The costs in creating the service are minimal," said Brian Oakes, an analyst with Lehman Brothers. "It's kind of like, 'Why not create this service?' It can't hurt."
"This is one of the more positive steps that CompuServe has taken in recent memory," said Mark Mooradian, an analyst with Jupiter Communications."They're attempting to extend what is for them a very valuable franchise, which is the forums...CompuServe desperately needs to expand its audience. They need to start growing."
However, MSN and possibly other comprehensive sites such as Yahoo and Snap (an online service and content aggregator that is a division of CNET, publisher of NEWS.COM), are not simply giving up on those desirable users.