Apple Computer is converting its tiny, 11/2-year-old eWorld (http://www.eworld.com) from a commercial service with just 120,000 Macintosh-using subscribers into a free, Internet-based service. The revised eWorld will take advertising and charge fees for some premium content.
News Corp.'s Delphi (http://www.delphi.com), a once-faltering online service, is partnering with MCI Communications Corp. to create a similar Internet-based online service.
"Instead of orbiting the Internet, we're moving into [it]," said Peter Friedman, VP-general manager of Apple Internet Services.
eWorld, already a speck in the online universe, will lose some of the identity it had as a private service. But Mr. Friedman said more visitors and advertisers will flock to the Web incarnation because eWorld will retain its sense of community, including strong women's and children's content.
Apple will terminate contracts with eWorld publishers that, in light of eWorld's migration to the Web, want Apple only to point to their Web sites.
Many doubt the staying power of any fee-based online service existing on the wide-open Web.
"The proprietary Web-based service model is fundamentally flawed and based on a misconception of what the Internet is," said Nate Zelnick, senior analyst with New York-based Jupiter Communications. "The Web is a totally user-driven vehicle, and why would any consumer, or content provider, for that matter, bother going through a middleman to get to the Web?"
The Web-based services are betting just the opposite, especially now that more content providers are beginning to charge users for accessing premium areas on their Web sites.
"If a content provider wants to get paid for a product, they will likely need to find a high-level aggregator who has a billing and customer service relationship with the consumer," said Scott Kurnit, director of MCI/News Corp. Online Services. "It's difficult to get the consumer to make too many purchase decisions....The average consumer still wants simple, reliable, affordable pricing."
MCI/News Corp. stresses that a branded Web service is as much a plus for publishers and advertisers as a proprietary service.
Since linking their two individual efforts, MCI and News Corp. have hired a strong staff-including Anthea Disney, TV Guide's former editor in chief, as the service's new editor-and have been creating original content (http://www.mci.com).
"Aggregators [on the Web] will have built-in promotional clout because they have made the marketing investment to bring a large number of users to an area for other purposes," Mr. Kurnit said. "If you were launching a new show....the marketing clout of following `Seinfeld' or being mentioned in the credit roll, or just the approval that it affords the viewer that a reliable source has scheduled the show, is highly beneficial."
Delivering audience is what attracts advertisers most, especially if that audience is easily targeted and splintered-as is the case with most online services.
"Advertisers should be aware that private services are OK for people who don't know how to take the first step in getting on the Web. But once they're comfortable on the Web, most people find they're happier on their own,"Mr. Zelnick said.
Bradley Johnson contributed to this story.