Don't sing a dirge for CompuServe yet. In the wake of a weak earnings report last week, the company is accelerating its push to expand its market into a place where families feel as comfortable as hard-core techies.
"We're reinventing ourselves," company spokeswoman Gail Whitcomb said. "We're moving to a more consumer-oriented entertainment market. We're competing with TV, music, and other leisure activities."
CompuServe, launched in 1979 as the first proprietary online service, always has attracted very technically-oriented users who could navigate through its service.
But these days, the company, which attributed poor earnings to falling subscriptions on its worldwide network, is desperately trying to woo the rest of the world. Its Wow service, launched last March in an attempt to lure novices, has not drawn in very many of them. Nevertheless, CompuServe has not given up and is energizing its marketing efforts.
CompuServe is not alone in trying to tame the Web for users in the across-the-board fight for new customers. Everyone including ISPs, content sites, and search engines are trying to organize the tangled Web for users who don't have much time to surf.
Next March, CompuServe will release CompuServe 3.0, a completely redesigned service with a point-and-click interface, Whitcomb said. The product will provide a seamless link to the Net that will help CompuServe better compete with other ISPs.
For example, when users click on the "Sports" category, they will be pointed to sites both on CompuServe's proprietary network and to related sites on the Web.
"We're embracing the Web. We're basically biting the bullet and saying you can't ignore the Web. That's the future," Whitcomb added.
But it won't be easy for CompuServe to make its transition, said Steve Eskenazi, an analyst with Alex, Brown.
"I think it's very challenging for a company who's got so much on their plate to successfully turn itself around," he said.
CompuServe and other ISPs, including proprietary services, are generally following two strategies in their efforts to attract more users in the increasingly cutthroat marketplace: providing a bare-bones access only service, and providing as much content as possible, according to Youssef Squali, an analyst with Laidlaw and Company.
Whether proprietary content and online interfaces will prevail over plain old Internet access is still an open question. "Which strategy is going to win? I don't know," Squali said.