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America Online Tops 10 Million Subscribers

By Chris Allbritton
Associated Press
Tuesday, November 18, 1997

America Online Inc. of Dulles has topped the 10 million-subscriber mark, making it and the rest of the Internet a more viable medium for advertisers.

The service announced yesterday that it had reached 10 million subscribers by adding more than 3 million members in the United States, Canada, Europe and Japan over the past year. "We're pleased to hit this milestone, but this is a marathon, not a sprint," said Steve Case, AOL's chief executive officer. "This is an ongoing effort."

Case founded AOL in 1985 as a small computer bulletin board service. By 1994, the year that marked the birth of the Internet as a popular medium, AOL had 1 million members. Two years later, there were 5 million.

Various researchers have estimated that 40 million to 50 million people around the world go online. Kate Delhagen, a senior analyst for Forrester Research Inc. in Cambridge, Mass., said AOL's new numbers give it about 20 percent of the world's online population and half of the online households in the United States. "No one else can claim that," she said. "They have access to all those eyeballs."

That makes America Online an attractive medium, she added. It will be easier for advertisers to justify spending money online if they know half of U.S. households with a computer could theoretically see their ads.

"They're the easiest method for an advertiser or merchant to reach all those people," Delhagen said.

The new numbers seem to indicate that AOL is putting behind it most of the problems that resulted from an overburdened network.

In December 1996, AOL started charging $19.95 a month for unlimited use instead of basing customers' bills on hourly usage as it had done for years. A surge of new customers overloaded the company's modems and left millions of customers getting busy signals instead of e-mail through the first few months of this year.

AOL spent $350 million to buy new equipment to handle the crush, including 75,000 modems, but problems persisted, and the company was forced to refund some customers' monthly charges. Case said AOL is adding 25,000 modems a month now, bringing the number of available modems to more than 600,000. He said 520,000 members use the service during peak hours.

© Copyright 1997 The Associated Press

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