Joins CompuServe from AOL seeking improved positioning, broader role
Time's expected move to CompuServe from America Online could mark AOL's first casualty in a bidding war between rival online service providers.
Or it could be all about cultivating consumer markets.
While Time spokesman Robert Pondiscio said the pending CompuServe deal offers his title more money, he added that there's more to the picture than greenbacks.
"This is not about dissatisfaction with America Online," he said. "It's about better positioning on CompuServe...They envision a much broader role for us."
CompuServe is said to have offered the title more than the $500,000 annual fee AOL would pay.
Time joins an increasingly large stable of Time Inc. titles on CompuServe. The online service already claims People, Sports Illustrated, Fortune and Money. Only Entertainment Weekly remains with AOL, and that magazine said it has no current plans to move.
Time's move also is a threat to fellow newsweekly U.S. News & World Report, which is on CompuServe. (Newsweek is on Prodigy.)
"This is really phase two of something we saw last year. CompuServe paid the lion's share for Fortune, Sports Illustrated and People," said Peter Krasilovsky, analyst with Arlen Communications, Bethesda, Md.
CompuServe wooed Money by offering it prime positioning in its personal finance area. Time will get similar positioning with regards to news.
"We would be the door to news on CompuServe, and we would manage [whichever] wire service they have," said Barrett Seaman, Time special projects editor.
In the case of Money, CompuServe's vision for growing the consumer market was a factor in the decision as well. CompuServe early next year will deploy an additional commercial online service, code-named Project Wow, geared to new online users.
"We knew about Wow for quite a while; that was one of the interesting components of the deal," said Brett Zickerman, product management director-new media. "We're now in talks with CompuServe and Scott [Kauffman, VP-consumer markets and Project Wow leader] on that."
AOL's focus in recent months has been to nurture new brands--some say at the expense of traditional media names. It also has been aggressively building its Internet presence, via links from the existing service as well as a brand-new Internet-only service called Global Network Navigator.
"We're not willing to give in to bidding wars to keep content on AOL when the same content can be accessed on the Internet," said AOL spokeswoman Pam McGraw.
Time Inc. already maintains a presence on the Web with its year-old Pathfinder service, so working with GNN would duplicate efforts.
Time Inc. executives said there wasn't a "corporate mandate" for titles to choose CompuServe over another online service. The magazines have always operated independently when it comes to interactive media.
But Time Warner also has another connection with CompuServe. The company will license a customized version of the CompuServe Web browser to launch consumers directly to Pathfinder.
Copyright November 1995 Crain Communications Inc.