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AOL browses for business
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March 30, 1998: 5:39 p.m. ET
Enterprise unit hopes to drum up dollars with slew of corporate deals
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NEW YORK (CNNfn) - Nearly two years after America Online Inc. first rolled out its virtual `Welcome' mat to the nation's businesses, the Internet service titan has embarked on a drive to draw hundreds of thousands more corporate subscribers into its cybernetic fold.
The Dulles, Vir.-based AOL said Monday it planned to relaunch its Enterprise unit. Enterprise, started about two years ago, was designed to offer mobile business users reliable and secure Internet access.
But until now, that access has been limited mostly to intra-office networks; the new service would offer remote access and "instant messaging" capabilities over AOL's Buddy network to corporate employees on a much broader scale.
In tandem with the relaunch, AOL unveiled a series of new partnerships with a number of network-security companies, including Security Dynamics Technologies Inc. (SDTI), Aventail Corp., AXENT Technologies Inc.(AXNT), and Check Point Software Technologies Ltd. (CHKPF). AOL said it also signed an agreement with XcelleNet, Inc., an Atlanta-based provider of management solutions for remote users.
The security partnerships are intended to complement two other freshly struck deals. One is an agreement with International Business Machines Corp.'s Lotus Development unit to provide Internet access to Lotus's 20 million software users. The other is a deal with Oracle Corp. (ORCL) to provide its mobile work force with Internet access and other services.
Oracle is the world's leading supplier of software for information management. The company had $6.3 billion in revenues in 1997.
David Gang, AOL's senior vice president for strategic development, said he expects the Enterprise venture to draw as many as 250,000 business users to AOL over the next 18 months. He estimated potential revenues at about $20 million annually.
AOL officials promised more deals on the horizon. "This is the beginning of a wave of announcements, it's going to go on and on," said Jeanie Ryan, a spokeswoman with AOL Enterprise.
AOL's moves come at a time when the online market for business users is ballooning, and corporate subscribers are increasingly viewed as a Holy Grail for Internet service marketers.
For AOL, a company that forged its reputation as the nation's leading Internet gateway for millions of domestic Web surfers, the shift to business might seem like a major strategic shift. In fact, Gang said, most of AOL's subscribers today fall in a high-end demographic group of adult users.
America Online operates two worldwide Internet services. One, its trade-name AOL Interactive Services, boasts a subscriber base that topped 11 million earlier this month. AOL tapped into an additional 2 million users when it recently acquired the CompuServe network.
Yet AOL's trajectory has not been entirely a smooth one. Users in the past have complained of spotty service, busy signals and lost or misrouted mail.
Gang said AOL had invested more than $700 million into improving network capacity. He said 750,000 modems are available to handle traffic, including 400,000 during what he called the "extended business day," which stretches from 6 a.m. to 8 p.m.
Shares of AOL (AOL) slipped 1-1/14 to 67-3/4 Monday on the New York Stock Exchange.
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