AOL set to open its SAR service later this month
America Online, the world's largest Internet service provider with more than 19 million users worldwide, plans to launch its Hong Kong service on September 28, more than half a year later than originally planned.
The service, modelled on AOL's businesses in the US and Japan, will include a Web site accessible by non-subscribers, as well as a members-only chat and on-line-community areas.
Company spokesman Jane Merrinen confirmed the launch date, but declined to comment on specifics, such as the monthly subscription price. Steve Case, AOL's chairman and chief executive, will be in Hong Kong to launch the service on that day.
First announced in February last year, AOL HK is a joint venture with China.com, the Nasdaq-listed Web portal in which AOL owns an 8 per cent equity stake. It is America Online's second SAR offering. Its Compuserve service, which was bought by AOL a few years ago, has about 10,000 subscribers in Hong Kong.
For AOL, a successful launch of the Hong Kong service, for which about 11 producers and developers have been designing content in both Chinese and English, could also provide the means to enter the fast-growing mainland Internet market.
Official Internet-user estimates in the mainland doubled to four million in the first half of the year. Its possible partner in the mainland would be China.com, which via its part-owner, Xinhua, claims strong connections in the mainland.
Originally scheduled for launch early this year, AOL HK's launch date reportedly was pushed back due to technology glitches and financial matters, including China.com's successful initial public offering in June.
AOL made US$1.38 billion last year worldwide from a combination of subscribers' fees and, increasingly, e-commerce and Web advertising. In Hong Kong, where AC Nielsen forecasts 800,000 ISP subscribers by the end of the year, companies that stand to lose from AOL's entrance include ISPs as well as those with aspirations to become 'portals', or the pages Internet users go to most often for their information and links to other sites.
In terms of pricing, the SAR's dial-up subscriber market is competitive, with most ISPs offering basic services for about HK$100 a month, and one, City Telecom, claiming to charge no subscription fee in order to build up its user base.
Most of AOL's rivals in the local ISP market declined to comment on AOL's entry into the market, citing lack of knowledge about AOL's plans. Cable & Wireless HKT, whose Netvigator service claims more than half of Hong Kong's dial-up market, could not be reached before press time.
When it comes to the content and portal side of the venture, AOL will be going up against not just Netvigator's sites and services, it will also have to compete with the likes of Sina.com.hk and the media empire of Hong Kong tycoon Jimmy Lai.
Mr Lai's Next Media Interactive is in the middle of a hiring spree - about 18 developers and marketing staff in the past few months - meant to boost the company's Web offerings, according to Next Media Group assistant general manager Celina Chan.
The entrance of another company offering content to the Hong Kong market is good for competition and means that local services will have to improve, she said.
Incumbent portals 'must make our sites more attractive and must have unique points', she said. 'Customers will eventually choose which home page, which portal they prefer. These will be sites with good content and good customer service. The rest will be eliminated.' To gain a Hong Kong following among the city's mostly Chinese 6.8 million population, AOL may have to beef up Chinese content and match local offerings such as Next's on-line Cantopop celebrity photo gallery, which Ms Chan claims doubled the group's site traffic when it launched last Thursday.
In Japan, where AOL owns 50 per cent of an ISP joint venture with trading firm Mitsui & Co and publisher Nikkei, the service has about 100,000 subscribers after being in business for about a year.
Japanese rivals NiftyServe and BigGlobe reportedly have three million and 2.5 million subscribers, respectively.
AOL launched a service in Australia last year. It also runs the Netscape Online service in Britain, where it recently dropped its subscription fees to zero to compete.
Marc Andreessen, the co-founder of Netscape Communications and one of the early architects of the World-Wide Web, is to step down as chief technology officer of America Online (AOL) to take up a part-time advisory role at the company.
Mr Andreessen will be replaced by William Raduchel, who was chief strategy officer at computer workstation manufacturer Sun Microsystems.
In his new position, Mr Andreessen will devote more time to working with start-up firms and nurturing newer companies, something for which he became known at Netscape.
He co-founded Netscape in 1994 with James Clark. The company made popular an Internet browser developed by Mr Andreessen and university classmates.
Mr Andreessen became AOL's chief technology officer in February after the company acquired Netscape for US$4.2 billion in November.BRIDGE NEWS
