The Internet/PC provider

Published: 15 July 1999 y., Thursday
According to Forrester Research, about 35 percent of first-time PC buyers purchase their machines primarily for Internet access, which helps explain why computer prices have broken the sub-$400 barrier. It also explains, in part, why PC makers are moving in on territory traditionally occupied by Internet service providers (ISPs). Gateway Inc._s gateway.net Internet service, launched in 1997, currently boasts more than 200,000 subscribers; Compaq Computer Corp. established compaq.net last month; and Dell Computer Corp. will soon join the fray with its own Internet service. With PC prices plummeting - and dragging computer makers_ profit margins down along with it -- PC makers are searching for other ways to bring in revenue. The current battle cry in the Internet industry is that the brand is everything. Apart from AOL, however, no ISP has the brand awareness of, say, Compaq or Dell, and that could spell trouble for traditional Internet access firms. "In effect, the consumer thinks of the Internet experience as a unified whole -- the hardware, the software, the service," said Adam Schoenfeld, senior analyst at Jupiter Communications. "No one wants to be the commodity piece under the brand radar." Over the last few weeks, rumors have made the rounds on Wall Street that Gateway is in talks to acquire Earthlink Network , one of the leading ISPs. Neither company will confirm negotiations, but the speculation surrounding the companies has made one thing clear: If competition from computer makers doesn_t swallow up companies like Earthlink, consolidation certainly will.
Šaltinis: CNNfn
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