It’s hard to believe now, and nobody should have believed it then, but around 1997, analysts were calling AOL the only blue-chip dotcom stock. The problem was the golden age of dialup ended around 1998. But AOL served a purpose, for a time. Here’s a look back at 1990s AOL competitors.
In the 90s, technology stocks were a slightly different category. Today we don’t distinguish them, but companies who made and sold physical goods like IBM were easier to understand than companies whose business model revolved around the Internet and or proprietary information services.
Compuserve was the first successful online service, and one of the longest-lived. If you were serious about computing in the 1980s and early 1990s, this was probably what you had. But it was text-based and ran on a mainframe. When competitors came out sporting user friendly graphical interfaces, Compuserve found it hard to compete. All that momentum it built up in the 80s made it the one to beat, though, and it took a little while for others to overtake it.
Compuserve had a long and storied history, but ended up selling out to AOL. The timing worked out better for H&R Block, Compuserve’s former owner, than it did for AOL.
Prodigy was another user-friendly online service that came along around the same time as AOL. Originally a partnership between IBM and Sears, it had 465,000 subscribers by 1990. That made it the second largest online service of its kind at the time.
But in many regards Prodigy was its own worst enemy. Pricing inconsistency, heavy-handed moderation, and odd accusations of stealing user data gave Prodigy an uphill climb against AOL.
Ups and downs aside, Prodigy was innovative, especially when it came to delivering online news, and ultimately it wasn’t AOL that killed it. Instead it met an inglorious end at the hands of the Internet, absorbed into the conglomerate that became AT&T. The first DSL service I subscribed to was branded Prodigy, not that I really noticed since I changed my browser homepage right after I got my connection working.
MSN is still around today, but it, too, started out as a 1990s AOL competitor offering dialup service. Ultimately it was successful, but not in the form Microsoft expected.
In 1995, when Microsoft released Windows 95, it also debuted MSN, an online network intended to compete with AOL. It tried to combine the best elements of both, including Prodigy-like online news in partnership with NBC, but it never matched AOL’s success in the 90s. The rise of the Internet caught Microsoft by surprise, so Microsoft morphed MSN into an Internet property. The news partnership with NBC became the MSNBC cable network. Yes, the “MS” in MSNBC stands for Microsoft, though Microsoft divested its share of the network in 2005 and the web property in 2012.
So although the original MSN dialup service wasn’t a commercial success, it left a lasting and curious legacy. The other thing MSN did was provide an early proof of concept for Windows NT. Other dialup services ran on mainframes, and the Internet largely ran on Unix machines, so Microsoft’s idea of building a dialup service based on a large network of Compaq computers running Windows NT raised eyebrows in 1995. It worked, but in 1995, it looked like a gamble.
GEnie was a Compuserve workalike owned by General Electric. GEnie used it as a revenue stream for its mainframe computers after hours, when it wasn’t using them for its main line of business. This business model is often mistakenly attributed to Compuserve.
GEnie was less expensive than Compuserve and similar in format. GE saw it as strictly a side hustle so they priced it pretty low, and the low price meant it didn’t have to be as big or as good. Early on that was the secret to its success but it suffered from being an afterthought. As modems became more popular, General Electric didn’t add capacity for GEnie to grow. And by the early 1990s, its user interface looked antiquated. Some graphical frontends appeared to make it more user friendly, but it didn’t match the experience other services could offer, being menu-driven and graphical from the beginning.
It never kept pace with the growth its user-friendly newcomers enjoyed, but it survived a surprisingly long time. GEnie folded in 1999, several years into the Internet era.
In 1996, Compuserve formed a second online service called Wow, featuring a friendly graphical user interface that looked hand drawn. It gained a small but dedicated following, but the service suffered from random shutdowns and other glitches. Compuserve shut it down at the end of January 1997, after only 10 months in service.
In the 1980s, Apple had partnerships with General Electric and the predecessor to AOL, but by the early 1990s it wanted out of both. In 1994 it launched Eworld, an AOL-like online service for Macintosh computers. It stood to reason that if stodgy old IBM and Sears could make an easy-to-use online service and be successful with it, so could Apple.
But it didn’t work out that way.
It was expensive and Apple didn’t market it all that well, so it never had more than 115,000 subscribers. By comparison, AOL had 3.5 million subscribers during that time period. It folded in March 1996, after 21 months. Unlike today, when everything Apple touches seems to turn to gold, Eworld was typical of Apple of the mid 90s.