America Online will evolve from an access and content company to a full-fledged media company by 2000, according to a new research report from Jupiter Communications. AOL, the largest online service with 7 million-plus subscribers, will likely continue to partner with cash-rich large media companies this year, Jupiter predicts--a wise strategy in the short term to bring in additional revenue. But Jupiter believes that by 2000 AOL will compete head-on with many of these large media companies by offering its own branded content.
Jupiter also believes many of the smaller content providers at AOL will be squeezed out in the coming year, lacking significant ad revenue in the wake of AOL's shift away from hourly usage revenues.
Copyright January 1997, Crain Communications Inc.