Steve Case
America Online's Quest
to Become the McDonald's
of the Internet

By Dave Cassel

Vice President Al Gore speaks of "highways of the minds"-free information and online libraries wiring the world together into a giant global dialogue. But there may be a snake in the garden.

In the midst of an online alternative revolution, America Online is trying to create "brand name" access to information. Steve Case, CEO at America Online, says his goal is to "consumerise the Internet," the worldwide network of interconnected computers at the center of the Utopian visions. By leveraging "marketing skills and packaging skills," Case hopes to help accelerate "the commercialization of the Internet," and he's already succeeded in drawing 4 million subscribers to his service (making it the Internet's largest site).

Who is this man? Before founding AOL, Case sold shampoo and toothpaste for Procter & Gamble and worked for Pizza Hut, a division of PepsiCo. While one member of AOL's Internet advisory panel accuses him of 'strip-mining cyberspace," Case appears undaunted-and unapologetic. "Many look at the Internet and say it's a threat to America Online," he told Upside magazine. "We look at it and say, 'What a wonderful opportunity...'"

In the face of all the humanitarian optimism, Case's business approach seems almost cynical. He told Newsweek, "Generally consumers don't know what they want. It's, 'I guess I need this Internet thing'..." But Case steers new users toward AOL's version of Internet access-and even though many Internet features don't work as well on AOL, the company has spent millions of dollars arranging for its software to be pre- installed on new computers.

"I think pre-installation of anything but a basic operating system is questionable," says Karen Coyle, who heads one of the largest chapters of the Computer Professionals for Social Responsibility in Berkeley. "Very few beginning computer users are knowledgeable about the full range of software that's available to them."

"Ninety percent of consumers are on the fence," Case conceded to Forbes magazine. So how does AOL combat that? A sign on an AOL executive's wall reads "Niceness as a competitive weapon," and, indeed, Case once described the company's service philosophy as "holding their (members') hand." When a reporter asked him a technical question, he hemmed, saying, "Tell 'em it's magic."

"It's a huge baby bottle," says Christopher McCracken, who runs a local Internet access company in Dekalb, Illinois. "They wrap it up in this neat little candy-coated disk...AOL's mass-marketing campaign is almost like Joe Camel."

Futurist author Howard Rheingold sees some hope, however. The syndicated columnist, whose seminal book Virtual Communities explored social issues in the online world, expects the call of the Internet will be irresistible. "Some of those people will have a hunger for something deeper," he predicts from his Northern California home. "I don't think that logging onto a chat room on AOL is what I had in mind when I wrote Virtual Communities."

AOL's methods fly in the face of a vision of global interconnectivity: the resources on the Internet are based on "open standards" that aren't owned by one company. The tools used on the Internet evolved over years of attention from tinkerers all over the world, leaving dozens of choices for state-of-the-art software for reading electronic mail messages or browsing information files.

But it's not just about tools. Central to the vision of a decentralized network are small, flexible local services to hook users up to the global network. These start- up companies can offer faster responses and better service. "They don't have 3.5 million people to deal with," says McCracken. With no mass market, the local companies compete on their reliability and responsiveness. "You're not dependent on somebody at the end of an 800 number that they never answer."

And localized services usually offer better prices. For instance, LA residents can sign up for unlimited access to high-speed "SLIP" accounts for two dollars more than it costs for a five hours on AOL. Internet pioneer Daniel Dern says AOL will have trouble competing with local companies on price, "because the infrastructure is so radically different."

AOL covers this problem through aggressive marketing-one ad even offered "Jamming with your favorite Rolling Stone backstage." During the last two years, AOL spent more than $100 million on marketing-a rate of nearly $40 per each new subscriber.

So where does that leave the vision of a global information network? "The huge influx of corporate dollars and mentality is attempting to reshape it into a traditional broadcast medium," says David Sewell, a 14-year Net veteran. Recently, AOL began flashing advertisements to all 4 million users: before accessing the system, users were required to select "ORDER" or "DON'T ORDER" after reading promotional copy for a modem and book.

And the program's default was set to "ORDER." It's like the nation's biggest online service was declaring itself a marketing medium. Like television, AOL has even begun offering celebrity "appearances"-of a sort. Users view the typed text of celebrity responses to questions "live," as it scrolls across the screen. (The effectiveness of this is somewhat limited-Entertainment Weekly recently arranged for William Shatner to make an unscheduled appearance-and no one believed it was him.)

There's one more hold-over from the passive models of television: time spent on AOL includes mandatory pauses while the system installs artwork to enhance its visual appearance. Dern describes it as, "Excuse me while we waste your time without asking you. What if I needed to get my e-mail immediately?"

Many users are asking the same question. The concept of an information revolution pre-supposes millions of users exchanging information instantly through globally-connected online accounts. But one user-one of many who regularly post on a popular anti-AOL newsgroup, a friend's experience when she signed up her AOL account to receive electronic messages about football games. "She regularly got her pre-game mail on Tuesdays or Wednesdays, two or three days AFTER the game, and three to five days after it had been mailed." Another AOL user found that in order to plan a weekend get together with his online friends, "they had to work with me over the telephone."

While Newt Gingrich touts the wonders of communicating through electronic messages, AOL users have their share of problems employing this relatively simple feature of the server. One user complained in about a friend's experience sending e-mail from AOL last year. "It always bounces back to her with a 'mailbox full' error," and more ominously, "this has apparently been going on for a month or so." The hardware bug was indiscriminate; even email sent to Newt Gingrich was returned as undeliverable.

Later in the year, one local Internet server found all the messages his users sent to AOL were returning-leaving him with thousands of pages of undeliverable personal electronic mail messages. He phoned AOL, and offered to forward them the messages-on a computer storage disk sent through standard mail delivery.

Even without the inconsistent delivery, there are other problems. Unlike conventional mail, messages to AOL disappear after a finite period of time-whether the recipient has read them or not. And if a message is too large, it can't be read on AOL at all; the message has to be transferred directly to the user's computer and read with some other computer software. There's also a limit on the number of people a message can be sent to.

System overloads have slowed delivery of electronic mail to AOL for hours and even days. At $10 a month, it's not only cheaper to use the U.S. Postal Service, in some cases, the postal mail would actually arrive sooner. There's evidence that AOL has expanded the service without the capacity to handle new users. This leaves enthusiasts dialing their information superhighway's on-ramp, only to be stopped by a run-of-the-mill busy signal. A high-tech traffic jam. On a commercial road.

Recent software adjustments at AOL resulted in a three-hour nationwide outage. Later in the month, users experienced billing errors; some services became unavailable temporarily, and searching newspaper archives would return them in random order. AOL critics describe the service as an online system designed by Wile E. Coyote, continuously backfiring in surreal ways. In one of his most recent letters to all subscribers, Steve Case conceded that "Overall, it's fair to say that we haven't been able to provide the level of consistent quality we aim for."

So, as a reward for choosing this commercial online service over a local Internet account, new users encounter reduced offerings and low-quality service. "They've heard promises about online services, and they're prepared to believe it," says Dern. "How do they know any better?...You don't think they're exploiting the ignorant any more? Think again."

Some people have faith that because their interactions go through an electronic interface, they're somehow more reliable. In fact, system outages at AOL have caused cancellation requests to be copied by hand onto slips of paper by the customer service staff, who would sometimes "take a stack and throw them in the trash," says one former employee, who prefers not to be identified, "To get out of working." To meet their expanding subscriber base's demand for customer service, AOL sub-contracted a Texas firm that was lowering requirements and hiring teenagers.

How do Internet users view their AOL counterparts joining the global community? "They have changed it, and not necessarily for the better in some ways" says Joel Furr, an Internet veteran who launched a line of T-shirts proclaiming "The Internet is Full! Go Home!" Think of the Internet as a learned society that suddenly admits 10 times its membership in insurance salesmen, mechanics, and chicken farmers."

Dern attributes the backlash to the abusers among AOL subscribers. "This wasn't the old-timers rejecting the newcomers. This was an existing population rejecting jerks coming in with cap guns and paint guns." Newsweek called it a "culture clash"-nerds outraged that common men had arrived. But these so-called "Netizens" often show more concern for the common man. "AOL wants to keep its members ignorant," says one user. Furr concurs, adding "Always remember that the 'Internet Is Full' shirts are sarcastic."

In a kind of poetic justice, even as AOL was acquiring its first million members, technophiles were inventing software for a new technology called the World Wide Web. The much-touted software now makes the Internet as easy to use as AOL. "There isn't anything on AOL that can't be duplicated on the Web," says McCracken. In a kind of confirmation, this month the leading Web-related software company Netscape saw the price of its stock overtake that of AOL.

"We're concerned," Case told Wired magazine. Forbes recently announced a study predicting subscriber downturns by 1997, with pundits wondering how much longer AOL can continue selling access to the text of magazines for $3 an hour. In a kind of acknowledgment of their predicament, AOL acquired Global Network Navigator, an Internet access provider, which they plan to run as a wholly-owned subsidiary. And immediately before opening the service, they found GNN's equipment had lost all email messages their users had sent.

"AOL has a history of leading with its chin," Dern remarked wryly. Ironically, he was selected to be part of AOL's "Internet Advisory Committee" two years ago. What was that like? "They never seemed to ask our advice, and when we gave it, it was never clear they were listening."

The same could be said for a promotional email box that was set up for users to write to Steve Case. Earlier this month, email sent to the box was returned with the same message that greeted contributors to AOL's suggestion box when it opened over a year ago: "The Mailbox is Full". With millions of accounts competing for scarce resources, no one is immune from the crunch for computer space-prompting one AOL critic to describe AOL as "as responsive as the Hal system in 2001." An icon called "Yell at MTV" is systematically mailbombed, making it impossible to send MTV any messages at all.

But as the world makes a very real evolution to an information society, the most ominous words may come from the advertising copy of a recent America Online mass-mailing: "AOL sets the trend for the future."