Subscribers seek lower-cost Internet access, AOL suffers
With adoption rates plateauing for the first time ("percentage of Americans who use the Internet, about 71%, was flat last "), and the economy causing Internet access subscribers to seek lower cost options, AOL lost subscribers for the first time according to this Wall Street Journal story (subscription required).
America Online and other Internet-service providers are feeling the pain. Last week, the company reported that its subscriber base shrank to 35.2 million world-wide as of Dec. 31 from 35.3 million at the end of September -- the first decline in the company's history. In the U.S., the number of subscribers fell 176,000.
Microsoft Corp.'s MSN, the No. 2 Internet provider in the U.S., said its tally of nine million subscribers didn't budge in the fourth quarter despite an aggressive $300 million marketing campaign. EarthLink Inc., the No. 3 provider, said subscribers to its $21.95-a-month dial-up service increased by 59,000 during the quarter, but is still down 4% from last year.
On the other hand United Online which operates the Juno and NetZero services with its more reasonably-priced $9.95/month plans increased subscribers by 48% to 1.9 million in the year ending Sept. 30, 2002.
"Same computer, same Internet. Why would you pay more?"