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Study: AOL to own the home page

A third of all adults could begin their online tasks on a property owned by AOL if its plans to acquire Netscape go as planned, a new study says.

A third of all adults could begin their online tasks on a property owned by America Online if AOL's plans to acquire Netscape Communications go as planned, according a study released today.

However, the question remains whether AOL, which targets relatively inexperienced users, can effectively appeal to Netscape's more Web-savvy audience, said the study by market research firm Cyber Dialogue.

AOL has said that it plans to keep Netscape separate from its flagship online service specifically to appeal to different audiences. But in doing so, the survey cautioned that it must tread carefully.

The study said that while AOL has gained the largest combined audience on the Web, its mainstream consumer-based marketing efforts may be a harder sell to Netscape's audience.

"Our surveys show that Netscape's typical customer is far more businesslike and oriented toward efficient use of the Internet," said Thomas Miller, Cyber Dialogue vice president, in a statement. "They're not likely to tolerate a barrage of unsolicited online merchandising offers."

The research comes a week after AOL announced it would acquire Netscape in a $4.2 billion deal that includes involvement by Sun Microsystems.

Part of AOL's reasons for the acquisition was Netscape's Netcenter Web portal--a complement to the online giant's other properties, such as CompuServe, ICQ, and AOL has maintained for months that it wants to pursue a multibranded portal strategy to serve various offerings to different demographics.

The study concluded that the strategy has worked thus far, showing that AOL would remain at the top of all Internet companies in terms of garnering the largest audience, with an estimated 70 percent reach for all Netizens after the acquisition.

This reach, according to Miller, presents a huge opportunity to extend its advertising and merchandising initiatives to Netcenter. And, despite Netscape users showing that they prefer to find information on their own by going to specific sites, they also showed a high acceptance of shopping online, which is music to AOL's ears.

"The extensive reach that the deal gives AOL is going to be very compelling for advertisers and merchandisers who are looking for one-shot deals that reach a lot of people," Miller said.

However, he added that marketing to Netscape users should be a delicate process.

Any attempt to convert Netscape users into AOL subscribers will be difficult, according to the study. For example, Netscape users are more reliant on the Internet to make choices, and are more likely to choose an ISP over an online service to gain Net access.

"We found that Netscape users are increasingly interested in consumer products as well," Miller said. "And so that's why I think the power for advertising and merchandising is very compelling."

"The interesting question is whether size really does win in the end on the Internet," Miller said. He added that loyalty may be more important, and "subject to a mouse click in this environment."

"If size means that we feel we have the right to be more intrusive to the users' personalized, intimate experience, then size could backfire," he said. "If they try to become too aggressive with the efficiency-oriented Netscape users, they will see [Netscape users] reset their default home pages."