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AOL offers free Web access
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August 24, 1999: 11:43 a.m. ET
Netscape Online goes live in Britain, vowing to take on upstart competitors
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LONDON (CNNfn) - AOL Europe launched its free Internet access Tuesday with the aim of signing up millions of hip young Web surfers.
Netscape Online is the response to the runaway success of free Internet access providers in Britain, a concept pioneered by Freeserve (FREEV).
It is being offered in the United Kingdom by AOL Europe, the four-year-old joint venture of America Online and Germany's Bertelsmann.
Since its launch last September, Freeserve has racked up 1.4 million subscribers, making it the U.K.'s biggest service provider.
Despite consistently decrying the free access service as "an unworkable business model," AOL Europe has been forced to follow suit.
AOL Europe Chief Executive Andreas Schmidt told CNNfn.com he expects the new service to become the market leader, and he dismissed fears it will cannibalize subscribers to AOL Europe's existing fee-based offerings.
"Net-savvy under-35s" are the new audience AOL Europe is looking for, and Schmidt said he would be happy to take subscribers from existing free access providers.
"We're targeting do-it-yourself Web users who already have access," he confirmed.
"It's not about the butcher"
In a swipe at access-providing competitors, which include soccer clubs, supermarkets and a variety of other businesses, Schmidt told CNNfn.com: "This is about growing an online business, it's not about the butcher or retailer trying to grab some market share and calling itself an Internet company."
He warned that consumers were getting fed up with a level of service from many free access providers that is "poor."
Backing up Netscape Online's launch will be an expensive marketing campaign, with advertisements going in national newspapers and on television across Britain. AOL would give no numbers on how much the new service is costing.
Combating Freeserve's presence among retailers -- it is majority-owned by Britain's largest electronics retailer Dixons (DXNS) -- AOL has signed up with Kingfisher (KGF), one of Britain's largest retail groups. The CDs required to enroll for Netscape Online will be available in 800 of Kingfisher's Woolworth stores across the U.K.
Expanding the service to other European markets hasn't been ruled out. "It depends on how the markets develop in Europe. We could transform Netscape Online easily to new markets," said Schmidt, although he added, "no decision has been made yet." 
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