AOL to launch low-price Netscape dial up service

America Online Inc. (AOL) is preparing to roll out a discount dial-up service under the Netscape brand name in an effort to scoop up the lower end of the Internet access market, a source familiar with the company’s plans said Tuesday.

The basic service, which will offer users one e-mail address and a homepage featuring search functions powered by Google Inc. for $9.95 a month, is set to launch in early 2004, the source said. The service is a “thin client” which is easy to download and takes little memory, the source said.

The move comes as AOL faces dwindling subscriber numbers for its flagship U.S. service. Upon reporting its second-quarter results last July, AOL said that it had 25.3 million members in the U.S., 1.2 million fewer than it did in the year-ago period.

By offering a bare-bones service under the Netscape brand, AOL is hoping to gain more subscribers without cannibalizing its AOL product, which has faced stiff competition by lower-priced competitors.

AOL feels that the new dial-up offering will appeal to a large segment of price-conscious consumers, according to the source.

AOL’s standard dial-up service, priced at $23.90 a month, has come under pricing pressures from rivals such as EarthLink Inc., which is currently advertising dial-up service for $10.97 a month, and NetZero which provides a $9.95 monthly service.

Representatives for EarthLink and NetZero were not immediately available to comment on the new AOL offering.

In addition to the cut price, the new dial-up service will be made distinct by the Netscape branding, which is still well known through the Netscape Navigator Web browser. AOL bought Netscape Communications in 1999.

In other naming news, AOL parent company AOL Time Warner Inc. said Tuesday that it will officially drop AOL from the company name on Thursday in an effort to further distinguish the AOL and Time Warner brands. Henceforth, the company will be called Time Warner Inc. and operate under the common stock symbol of “TWX” on the New York Stock Exchange.