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Tensions rise between Microsoft, AOL


What began as a dispute over the linking of instant messaging systems has quickly ramped up into a full-fledged war between No. 1 software maker Microsoft, and America Online, the nation's largest Internet provider.

Microsoft's debut of its own MSN Messenger instant messaging software was highlighted by the fact that it was compatible with America Online's popular Instant Messenger service -- effectively giving MSN Messenger users access to AOL's 40-million members.

But AOL repeatedly has denied Microsoft's attempts to connect to it's service. It's become a two-week cat-and-mouse game, with MSN users hanging in the balance.

Microsoft's spokesmen have called AOL "hypocritical," and have denied any new strategy targeted toward AOL. AOL responded with its own criticism of Microsoft's attempt to piggyback on AOL's free service without permission.

The real battle between AOL and Microsoft may be a few months away, when Microsoft takes aim at AOL's bread and butter -- Internet access.

According a report in the Wall Street Journal, Microsoft is allegedly planning to offer low-cost or free Internet access as a way to lure away some of the 17 million subscribers who pay AOL $21.95 per month.

The plan, if successful, would hit AOL where it hurts. Internet access fees make up about two-thirds of the company's revenue.

Microsoft has cut prices on other products and services as a way to build its marketshare. For example, once Microsoft began giving away its Web browser, Netscape Communications had little choice but to eventually adopt the same strategy.

The company is already extending deals that virtually offer users a new PC if they sign up for three years of Internet service, and has tested pricing their Internet access as low as $9.95 per month.

Will lower-cost Internet access diminish AOL?

AOL's own chairman, Steve Case, pointed out in a recent interview that the company's growth has continued despite its price increase from $19.95 to $21.95 for unlimited Internet access.

The rumors of Microsoft's cheap Internet access plans was enough to scare investors into parting with their AOL stock, which fell 13 percent the day the news hit the street.

Microsoft recently stated it had no designs to attack AOL's business, and denied reports that it would offer cut-rate Internet access in order to steal some of their customers.

Stay tuned!

iMAC-INSPIRED PCS. The next time you go computer shopping, you may be in for a surprise.

The standard "beige box" may soon be extinct, replaced with a rainbow of colors and smooth shapes replaces putty-colored angular boxes.

Computer makers are following Apple Computer's lead by creating computer's without the standard "boring beige" colors that have been industry standard over the past 10 years.

PC makers Gateway, Hewlett-Packard and IBM will begin shipping computer built to the "Easy PC" design standard.

The Easy PC initiative's goal is to build computers that are easier to setup and get connect to the Internet -- noble goals, indeed.

The new Easy PC-design computers will not have parallel ports, serial ports, floppy drives, making it very similar to the wildly popular Apple iMac.

They'll be sleeker, and more colorful, as well as simple to hookup and operate.

The eMachines computer company will soon debut its all-in-one tranlucent blue computer at Circuit City stores across the nation.

Dubbed the eOne, the iMac-like computer will feature a 433MHz Intel Celeron processor, 64MB of memory, a 6.4 GB hard drive, a 24x CD-ROM drive and a 3.5-inch floppy drive (one thing the iMac doesn't have).

One nice option that the eOne has that would come in handy is a Home Phone Networking Architecture (HPNA) networking controller.

It sounds like a mouthfull, but what it does is impressive: It allows you to use household wiring to network multiple PCs in your home.

The eOne is priced at $799, provided that Apple doesn't file a lawsuit blocking sale of the new computer, as it did with Future Power and Daewoo Telecom, makers of the nearly identical E-Power iMac clone.

FREE IS GOOD. If a low-cost, easy-to-use computer isn't high on your list, how about a free computer?

The number of companies offering free computer deals seem to be sprouting as fast as the weeds in my garden.

The "free" part is relative -- most of the offers require consumers to sign a contract for three years of Internet access at $19.95 per month.

And most of the deals are rebates of up to $400 -- enough to cover the cost of an entry level eMachine, for example, available at numerous outlets including Circuit City stores nationally.

But now, fans of the Apple Computers iMac have their own "free" offer.

FreeMac.com will soon start giving away up to 1 million Apple iMacs to subscribers who sign up for a three-year, $19.95-per-month contract for Internet access and sign up for a Visa credit card.

FreeMac.com has partnered with EarthLink Network for Internet access, as well as First USA for the credit card.

Earthlink Network is also part of a similar deal for a "free PC" from Microworkz.com.

For more information, visit FreeMac's Web site at www.FreeMac.com.

REALLY, REALLY FREE. In addition to the "free-PC-with-Internet-subscription" deals floating around today, there's still one company that's actually giving away PCs with no purchase required.

But there's still a catch.

Free-PC gives their computers away for free, but small advertisements are displayed on the computer screen at all times.

It works like this: To sign up for a free computer, consumers register, providing extensive demographic information.

This information allows Free-PC to target ads that might most interest you -- and entice you to click on them for more information.

The whole giveaway is paid for by the sale of these advertisements, which can be targeted to those who can best use their goods and services.

The "free" PC movement is credited with boosting retail sales of computers in June, and experts say they'll prompt more people to decide to finally buy a computer and go on the Internet.

Free-PC is planning to distribute half a million PCs by next summer.

The company's first announcement flooded their site with more than a million requests for the first 10,000 computers distributed.

Comments and questions about this column may be sent to jbrooks@myoldkentuckyhome.com, or visit www.myoldkentuckyhome.com on the World Wide Web.

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