The Cutting Edge: AOL and GNN Partner to Build Launch Pad

CMC Magazine July 1, 1995 / Page 4

CMC NEWS

The Cutting Edge

AOL and GNN Partner to Build Launch Pad

Global Network Navigator (GNN), a subsidiary of O'Reilly & Associates of Berkeley, Ca. and the first commercial Web publishing site, was sold to America Online's (AOL) for an estimated $11 million. As part of the deal, AOL and GNN formed Songline Studios, a new company dedicated to creating innovative online applications and original content on the Internet. One of Songline's first ventures is Web Review, a publication that promises to "chronicle the emergence of a new medium."

GNN, a pioneer in online publishing and Internet commercialization, produces The Whole Internet Catalog, a subject-organized directory of Internet resources. GNN is also known as a good source for online publications that cover travel, personal finance, sports, entertainment, and the new emerging electronic culture.

In a June letter to subscribers, Tim O'Reilly, founder, president and editor-in-chief of O'Reilly & Associates, Inc., publishers of computer books and online information services, explained the rationale behind GNN's decision to partner with AOL:

"We talked with a lot of possible partners.... Many of the large players are entering the Internet market reluctantly, for fear that if they don't move, they'll get left behind. At worst, they are trying to `co opt' the Internet enthusiasm and divert it into a proprietary service that they can control. In our estimation, AOL shares our enthusiasm for the truly amazing possibilities represented by the Internet."

Creating the Value Added Product

According to O'Reilly, GNN was started as both an experiment and a crusade. Their long-term goal was to build a "rich publishing marketplace where not only advertising but other forms of economic activity would support authors, publishers, and others in a rich ecology that creates additional value for readers, sufficient that they are willing to pay for it," says O'Reilly, who sees the AOL infrastructure as a way to leverage what they've done with GNN.

In addition to buying GNN, AOL also acquired WebCrawler, the first full-text search service available on the Internet. Brian Pinkerton, a Ph.D. student at the University of Washington, developed WebCrawler, which accommodates more than 250,000 users a week and indexes 2,000 new Web sites each month.

Now that it has the searching and navigating capabilities of WebCrawler and GNN, AOL is ready to launch a standalone Internet service, which is schedule to debut August 24. In an online press release, Steve Case, president and CEO of America Online, Inc., described his objectives:

"Our aim is to build a mass market for interactive services -- and to do so, we must reach out to the 93 percent of households who don't currently subscribe to any online service. In addition to its current free services, GNN will also be working to offer subscribers a wide range of a la carte services. Because GNN's strategy is to create these kinds of services using the open Internet model, where anyone can participate, we should see a much wider diversity of content than other proposed a la carte alternatives such as The Microsoft Network and AT&T Interchange."

What Free Really Means

To understand where the cost factor comes in for consumers, GNN's Tim O' Reilly suggests looking at layers of Internet access and information products, and separating the two. In an e-mail interview he explained:

"Gradually, people are coming to realize that the term "free" has to do with access, not with price. . . . Whether someone is on the Internet (and remember that is the Internet, the network of networks) via PSI or via AOL or via MSN, we want them to be able to get at our information products. In looking to start up its Internet service, AOL is certainly hedging its bets, half-hoping perhaps that the Net will go away and leave them their proprietary business. But the other half, and the more prescient one. . .realizes that the Internet is good for their business."

He believes the industry needs models that promote diversity, niches, and low barriers for entry and he compared some of the virtues of print publishing with preferred economic models in a recent paper. "So far, the net has served its niches based on free, voluntary association," writes O'Reilly. "And that takes you a long way. But if you want even more, sometimes you have to pay, and are willing to do so, because you want someone to go that extra mile that you don't have time for yourself."

Chris Lapham is chief correspondent for CMC Magazine.

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