Webreference.com: WorldNet: Conclusions

How will our three protagonists do?

How will our three protagonists do in this instance? The major on-line services have already developed some technical caching skills although they are notorious for serving up old content. Further, having carried most of the content on their own systems, they have already had a chance to learn how to analyze and understand customers' content preferences (although sometimes one wonders just how well they are learning).

Regarding relations with content providers, much needs to be done. Currently, there is often something of an adversarial relationship between on-line services and content providers. New models for this business relation will need to be developed. AT&T's WorldNet has a great deal of corporate level experience in operating within distributed information environments. How well they are able to translate the experience from other parts of the corporation to this specific situation remains to be seen. The ISPs, once again, will be the most disadvantaged by this requirement. Effective caching can require considerable investment in equipment. With cheaper on-line charges a major attraction of these companies, the added expense may prove too burdensome. Yet, if they choose to focus on microsegments (something larger companies typically have difficulty with), understand this niche market's site/content preferences thoroughly, and provide faster access to just those specialized sites, such companies could well thrive in the coming market.

Companies who meet the technical and business challenges will defy the downward price spiral and profit from a loyal customer base.

A partnership between AT&T and AOL could prove very potent

In conclusion, companies who excel in meeting the technical and business requirements set forth above will defy the downward price spiral and profit from a loyal customer base. Examined in this light, the market's devaluation of ISPs (as most are currently structured) is not misplaced. On the major criteria listed above, they start from a position of disadvantage. However, writing off the major on-line carriers (especially AOL) is a mistake. The latter have the potential to successfully meet several of the requirements identified above.

Finally, given AT&T's relative lack of knowledge about this market, and the ISPs' lack of name recognition and resources, a partnership between these two could prove very potent. WorldNet could franchise local/niche markets to ISPs specializing in providing quick, customized service to the local customer, while the brand strength of Ma Bell (and other household telco names) would provide access to the homes and computers of the coming masses.