With the purchase of CompuServe's one million dial-up accounts a done deal, online juggernaut America Online (AOL) has begun reorganizing itself to better compete in the future. Plans include raising its basic monthly fee, laying off about 500 CompuServe employees, and building a stronger AOL brand name through Web-based content.
First up is an increase in its unlimited access plan from $19.95 a month to $21.95. AOL CEO Steve Case says the move is required because of a dramatic increase in usage by AOL's 11 million subscribers. The price increase will begin in April.
"Web hits by AOL members have quadrupled to 70 million daily, and the number of email messages has more than tripled to 22 million each day," said Case said on Monday.
Meanwhile, with 500 CompuServe employees getting the axe, AOL also cancelled that service's plans to develop a Web-based version of its user interface. Most of the cuts at CompuServe come from customer service. AOL says it is refocusing CompuServe on online business and has given the go-ahead to a new proprietary CompuServe user interface dubbed "CompuServe 5.0.