Jan/Feb 1999

ARTICLE TOOLS

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In 1995, when America Online first allowed its members to surf the Internet and the World Wide Web, seasoned users of the Internet feared being swamped by "newbies" who were unschooled in netiquette and threatened to foul the waters of cyberspace for all time. As it turns out, those fears were misplaced—or perhaps not sufficiently dire. It is AOL itself that is emerging as a potent threat because of its successful and expanding dominance of the cyber-marketplace.

From Kara Swisher's new book, aol.com, it would be easy to conclude that the folks at America Online are wearing the white hats. Swisher, a business journalist, has had a front-row seat in covering the rise of the online industry, perhaps the definitive nineties business story. But she is surprisely unreflective in analyzing the place of AOL and its CEO, Steve Case, in the cultural ethos of the late 1990s.

Launched in 1989, America Online has become—at least for a precarious moment—the preeminent player in cyberspace. Last year, AOL reported a record membership of 13.5 million; those members were viewing an estimated 1 billion pages on the Web daily. AOL has continued to leverage its market strength into market dominance. In August, AOL and other leading Internet partners launched the so-called TeraPOP, one of the largest exchange points on the Internet. TeraPOP can handle 4,000 megabits of information each second and will allow consumers to have significantly faster access to the Internet.

As recently as 1996, many analysts were penning obits for AOL, CompuServe, and other proprietary online services because consumers were flocking to the Internet itself, and the imminent launch of MSN (Microsoft Network) was sure to deliver the mortal blow. Much ...