The move effectively ends the skirmishing that has gone on in recent weeks among the three companies as Microsoft tried to break up Netscape's pact with AOL. It also may signal a new openness between AOL and Microsoft; AOL had been a primary opponent of Microsoft's plan to make its Microsoft Network an icon on the Windows 95 operating system. Now, AOL will have the same presence.
AOL President Ted Leonsis said the deals are part of AOL's strategy to use reciprocity and openness in growing its market. He said additional relationships, like AOL recent agreement with Apple Computer to bundle its software on Apple Macintoshes, would mean "we'll be ubiquitous" in the industry.
Under the agreement with America Online, sign-up software for AOL will be a click away when PC users install Windows 95 or when they open an "online services" folder or point to the "Start" button's "Programs" section on Windows 95.
That gives AOL nearly the same access to the universe of Windows 95 users that Microsoft has with the "Microsoft Network" icon that appears on the Windows 95 opening screen.
Last summer, AOL complained to antitrust regulators that MSN icon gave Microsoft literally a built-in advantage for its new online service. Since then, however, AOL has increased its number of customers by more than the 800,000-plus customers MSN has managed to attract, meaning MSN was not the category killer that Microsoft critics initially proclaimed.
Microsoft Chairman Bill Gates and AOL chief Steve Case both termed their new alliance as pro-consumer and pro-competitive.
Microsoft is shifting MSN toward an open Web service, but the company stressed Tuesday it remains committed to MSN as a standalone service.
"MSN is still alive and well and kicking," a spokeswoman said. MSN will compete with other services on the basis of content, she added.
However, in building AOL access into Windows 95, Microsoft in effect could be sacrificing some potential growth for MSN in return for a greater corporate goal, increasing the use of Microsoft's Internet Explorer as a way of combatting the Web browser dominance of Netscape Communications Corp.
When Internet Explorer's version 3.0 appears this summer, it will become the default browser for users of AOL, the world's No. 1 online service, including PC users running Windows 95, Windows 3.1 and Apple Macintosh.
Apple and AOL last week announced a deal to include AOL access in many new Macs.
CompuServe also recently announced a deal to use Netscape's browser. Customers of CompuServe and the Sprynet Internet access service will get free access to the Navigator browser. Last December, CompuServe said Internet Explorer would be its "primary" browser.
For Web designers, the moves by CompuServe and AOL mean the end of creating several versions of Web pages for different browser types. While Microsoft's and Netscape's products are essentially similar, capabilities of the native AOL and CompuServe browsers vary widely.
The moves also reinforce the idea that online success demands no proprietary systems nor exclusive deals.