AOL Surpasses Local ISPs

America Online has been the world’s largest provider of online services for quite some time, but research by ZD Market Intelligence is showing the true scope of the online giant. According to the research, AOL has 14 million members; all of the local ISPs combined have 13 million members.

Local ISPs do not include the Microsoft Network or AT&T’s WorldNet services, only companies that offer Internet service on the regional level. The research does not include ISP CompuServe, which is owned by AOL.

The research also found that AOL’s market share for home access rose from 30 percent to 42 percent since January of 1998. AOL may also be gaining in the business market, where the ZD Market Intelligence research found that AOL had a 32 percent share of the home-office market compared with a 29.9 percent share for local ISPs.

In a statement released with the findings, ZD Market Intelligence Executive VP Aaron Goldberg said he expects AOLs numbers to grow even more. “I’d expect the upcoming data that we’ll collect during December/January to show an even larger uptick in the share for AOL,” he said. Indeed, AOL announced on December 30 that it has passed 15 million members. More new members signed up for AOL on Christmas Day 1998 than any other single day in the company’s history. For a comparison of AOL and ISP customers, see the table below.

When AOL announced its intention to purchase Netscape, Cyber Dialogue released research that found AOL would reach 70 percent of the US market after the acquisition. It also found that one-third of US adults that go online at least once a month would start their online session at a page owned by AOL.

Several studies have been done to see exactly what type of people prefer AOL over local ISPs and vice versa. What these findings agree on is that AOL users spend more time online and use more chat/discussion features than ISP subscribers do. ISP subscribers are more computer and Net-savvy, on the average, than AOL users. ISP users are more shopping and email oriented in their Net travels, and ISP users are more likely to shop by going directly to a retailer’s site. AOL customers, however, are more active buyers. When looking at demographic factors such as age, gender, and income, it becomes nearly impossible to tell AOL and ISP users apart.

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