UK on-line services provider AOL UK says companies are overplaying the
importance of the Internet to consumers and argues that the majority of
people use on-line services for communicating rather than for Internet
Jonathan Bulkeley, MD of the American Online and Bertelsmann joint
venture set up in the UK last year, says companies are missing
opportunities to generate money from on-line services by focusing too
heavily on advertising on the world wide web.
Monitoring of AOL’s 5.5 million US subscribers shows that nearly 83 per
cent of on-line usage is not Internet-related. Around 40 per cent of
time is spent on chat and e-mail, while only 17 per cent use it for
Bulkeley says that trend is set to continue with women accounting for an
increasing proportion of on-line users. The proportion of female
subscribers to America Online in the US has leapt from 15 per cent to 35
per cent over the last nine months.
Bulkeley says companies looking to profit from on-line activities should
not concentrate on advertising on the world wide web but make content
deals with on-line providers. These can earn companies up to a 20 per
cent cut of hourly on-line fees, accounting for around 98 per cent of
on-line services revenue.
American Online expects its revenue to hit the dollars 1 billion mark