America Online Unveils Strategy For New Internet Brand
Acquires Global Network Navigator (GNN) as Platform for Launch
Vienna, VA, June 1, 1995 -- America Online, Inc. announced today that it plans to offer a standalone Internet service, and to kick-start this effort it has entered into an agreement to acquire Global Network Navigator (GNN), a subsidiary of O'Reilly & Associates, Inc. In addition, AOL announced it has acquired the WebCrawler search tool and Internet index.
GNN, with an estimated 400,000 regular readers and over 180,000 registered subscribers, is one of the most highly trafficked sites on the World Wide Web, and was the first commercial web publishing site. As more and more content is added to the World Wide Web, context and navigation becomes critical -- and GNN is widely cited as being the ideal launching pad for people who want to navigate the vast resources of the Web. WebCrawler, an easy-to-use Internet search tool, will be incorporated into the new Internet brand.
AOL's new Internet brand, to debut on August 24th, is designed to be a "best of breed" offering that combines the content and context of GNN, the power and speed of the award-winning InternetWorks web browser and software suite, and comprehensive web directories and search tools. The broad reach (covering more than 600 cities) of the AOLnet and Sprintnet data networks and customer support will also be featured offerings of the new Internet brand. Pricing for the Internet brand will be announced at a later date.
"As the market for online services continues to expand rapidly, some market segmentation is beginning to emerge," said Steve Case, President and CEO of America Online, Inc. "Most consumers want a broad range of services, presented in an engaging manner, with simple and affordable pricing, and a strong underlying sense of community -- and for that audience our AOL brand is the ideal choice. But a growing number of people are beginning to seek an Internet-only solution, and a growing number of publishers are interested in offering 'a la carte' services, and by launching our new GNN brand we will be capitalizing on those trends as well. By combining our market expertise, ease-of-use, friendly interface, broad network, customer support and technology with GNN's innovative and passionate Web-centric focus, we are positioning ourselves to lead the way in popularizing the Internet."
Case added: "Our aim is to build a mass market for interactive services-- and to do so, we must reach out to the 93% of households who don't currently subscribe to any online service. A second brand expands our scope and broadens our appeal. As one of the easiest and lowest cost ways to get full Internet access, GNN will help people navigate around the tens of thousands of Internet services."
"In addition to its current free services, GNN will also be working with publishers 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," Case added.
"People who just want Internet access, or prefer paying separately for services they use, will likely opt for our new GNN brand. People who want to pay a monthly fee and get access to the widest possible range of content free of surcharges are more likely to opt for our flagship AOL brand. In either case, we stand ready to serve them," Case said.
First launched in August 1993, and recognized as an Internet publishing pioneer, GNN provides its readers with "The Whole Internet Catalog" -- a reviewed directory of the best resources on the Internet organized by subject area. It is one of the leading sources for online publications on travel, personal finance, sports and insightful and entertaining articles about the culture and people of the Internet. GNN can be accessed on the Internet at http://gnn.com.
"We are very proud of what we've created in the Global Network Navigator," said Tim O'Reilly, president of O'Reilly & Associates. "We feel it is the pre-eminent online guide to what's up on the Internet, and a prototype for a kind of navigational framework that will become increasingly important as the Internet continues to grow. At the same time, we believe that in order to really do justice to the information challenges GNN was created to solve, GNN would have to be scaled up considerably. With many large players entering the Internet services market, we felt that the best way to keep our lead was to team up with America Online, the pre-eminent leader and innovator in interactive services."
O'Reilly continued: "AOL shares our enthusiasm for the truly new possibilities represented by the Internet. They are eager to continue the work we began with GNN -- of creating businesses and business models that don't try to control or limit the freewheeling nature of the Internet, but instead build on it."
In addition to building original content and programming for the new Internet brand, GNN will continue to provide a range of advertising supported free services and will be available to anyone who has a Web browser. AOL members will be able to easily access GNN through their existing service.
The merger of GNN, a wholly-owned subsidiary of O'Reilly & Associates, Inc. of Berkeley, CA, into a wholly-owned subsidiary of America Online, Inc., is expected to be completed by mid-June, 1995, subject to regulatory approval and other customary conditions to closing. GNN will receive $11 million in connection with the acquisition, $9 million of which is payable in common stock of AOL, represented by 226,819 shares determined based on the average closing price for the twenty day period between March 20, 1995 and April 14, 1995, and $2 million of which is payable in cash at closing.
Additionally America Online is making a minority equity investment in Songline Studios, a new subsidiary of O'Reilly & Associates, to be headed by GNN founder Dale Dougherty and other original editorial designers of GNN. The new company's charter will be to create exciting new Web-centric content, applications and services.
WebCrawler is widely regarded as the most popular, fastest and easy-to-use Internet search tool available in the market today. WebCrawler was developed by Brian Pinkerton, a Ph.D. candidate at the University of Washington. The technology allows users to rapidly locate information on the World Wide Web by providing full-text searching of the content gathered by the WebCrawler. WebCrawler was the first full-text search service available on the Internet.
WebCrawler is available free to the Internet at http://webcrawler.com. More than
250,000 users a week search the WebCrawler's index of 29,000 Internet sites worldwide.
WebCrawler indexes more than 2000 new sites monthly.
With the acquisition of WebCrawler, America Online can significantly enhance its ability to provide context for Internet content. Through the advanced search and indexing capabilities, WebCrawler will augment directories by providing broader and more timely indexing than any other current method of updating directories.
America Online, Inc., based in Vienna, VA, (NASDAQ symbol: AMER) is the largest and fastest growing provider of online services in the U.S. with the most active subscriber base. AOL offers its more than 2.5 million subscribers a wide variety of services, including electronic mail, conferencing, software, computing and newspapers and online classes, as well as easy and affordable access to services of the Internet. Founded in 1985, AOL has established strategic alliances with dozens of companies, including Time Warner, ABC, Knight-Ridder, Tribune, Hachette, IBM, and American Express. Personal computer owners can obtain America Online software at major retailers and bookstores, or by calling 800-827-6364.