Moreover their stature as a huge conglomerate inspires (probably justifiable) fears that they might misuse their knowledge of customers in manipulative marketing..

Further down the road, I’ll bet that AOL’s extremely poor growth management during the 1996-1998 period, which resulted in customers more often than not getting busy signals when trying to connect, may be biting them in the ass.

-Ian.

—— http://dailynews.yahoo.com/h/nm/20010823/tc/media_trust_dc_2.html

Thursday August 23 5:02 PM ET

Consumers Distrust AOL More Than Microsoft-Gartner

NEW YORK (Reuters) – Consumers are more distrustful of AOL Time Warner Inc. (NYSE:AOL – news) than rival Microsoft Corp. (Nasdaq:MSFT – news), which has been the target of competitive concerns for years, according to a Gartner Inc. survey of adult online users released on Thursday.

AOL, which prides itself on consumer privacy and security issues, is the least trusted company on the Web when compared with online services from banks, brokerages, credit card companies, online retailer Amazon.com Inc. (Nasdaq:AMZN – news), large retailers and Microsoft, the survey found.

About 37 percent of online consumers said they had a high level of distrust of AOL Time Warner’s AOL Internet unit, compared with 29 percent who said they were highly distrustful of Microsoft. About 21 percent were distrustful of banks and thrifts as part of the survey.

The survey also found that 17 percent of the consumers said they had high levels of trust in Microsoft while 15 percent said the same about AOL. Meanwhile, 33 percent had high levels of trust in banks and thrifts.

Those surveyed were answering a question about how much they trusted online providers with their personal and financial information.

Gartner Research Director Avivah Litan said in a phone interview that the report was done by surveying 2,150 consumers in hopes of gauging attitudes toward using the Internet for shopping and other transactions. The research was not vendor-sponsored, she added.

The survey also hoped to find what features needed to be in place to ease concerns and who consumers trust most to deal with personal and financial information.

“It directly contradicts everything we are hearing from our members,” said AOL spokesman Andrew Weinstein. “Consumers have a wide choice in online service and we added more than six million members in the last year alone. We survey our members all the time and satisfaction has never been higher”

Since the closing of AOL’s $106.2 billion purchase of Time Warner Inc. in January, the Internet and media giant has experienced some of the backlash that software giant Microsoft has endured because of its size, reach and power.

The findings come amid Microsoft’s aggressive battle to take away market share from the world’s largest Internet services provider and as Microsoft tries to bulk up its Internet presence and services.

“The added trust that consumers have in Microsoft gives the company an important leg up in its battle with AOL for online services. Consumers will be more likely to try new Microsoft features embedded in Windows XP, such as Microsoft Messaging,” said Litan. “AOL has always viewed itself as the ‘consumer’s advocate’ but this survey clearly dispels that myth.”

Microsoft also received higher consumer satisfaction ratings than AOL on its Internet and e-mail services, the survey found.

THOUGHTS ON PASSPORT

Gartner also asked consumers about Microsoft’s Passport service, which lets consumers sign on to Web sites and services with just one user ID and password and which has raised the ire of some privacy advocates.

Out of those who did use Passport services, Litan said about 83 percent did not feel comfortable enough providing their credit card numbers.

More than 70 percent of those surveyed had not signed up for the Passport service and said they were highly unlikely to do so in the next six months.

Shares of AOL Time Warner closed up 58 cents at $40.08 and shares of Microsoft closed down $1.54 at $59.12.

http://dailynews.yahoo.com/htx/ap/20000810/tc/aol_mp3_search_2.html

Thursday August 10 7:10 PM ET AOL Takes Down Music Search Engine By PETER SVENSSON, AP Business Writer NEW YORK (AP) – America Online Inc. (NYSE:AOL – news) on Thursday once again reined in a subsidiary that has caused it embarrassment in the past, shutting down a search engine for digital music run by Nullsoft, an AOL unit that also has created a Napster-like file-sharing program. The search engine pointed consumers to Web pages with digital music in the popular MP3 format, which the recording industry says has become a vehicle for piracy. “We don’t have an efficient process for distinguishing between legal and illegal MP3s, so we decided to take it down until we can address that,” said AOL spokesman Jim Whitney. The search engine was located on the site that distributes Winamp, a popular MP3 player program for Windows written by Nullsoft. On Thursday, the Search button was still active on the Winamp site, but only returned this message when clicked: “Sorry. Search unavailable at this time. Sad, sad Nullsoft.” Nullsoft programmers sent AOL scrambling in March, when they posted Gnutella, a program that lets users exchange files, including software and music, over the Internet. It was quickly yanked, but has subsequently spread on the Web. Nullsoft’s Web site proclaims that they are “legitimate nihilistic media terrorists as history will no doubt canonize us.” Napster, a program similar to Gnutella that only lets users exchange MP3 files, has been sued by the recording industry for allegedly enabling copyright violations. The Recording Industry Association of America has also sued search engine MP3Board Inc. for providing links to outside Web pages that the industry considers to be copyright violators. The small San Rafael, Calif., company has countersued and last month started using a technology called LinkBlaster to allow copyright holders to delete links to their music on its site. There is still plenty of copyrighted music available through the site. Other Web search engines, such as AltaVista and Lycos’ Hotbot, also allow searches for MP3 files. In another twist, a programmer’s group in Troy, N.Y., on Wednesday released an add-on to AOL’s Instant Messenger that allows users to search the computers of friends who use the same program and download files from them. Instant Messenger, distributed free by AOL, is the dominant “chat” program. Even without add-ons, it allows users to download files from designated folders of other users who give their permission. The free Aimster add-on improves on this by allowing searches in these folders, creating a file-sharing network similar to Napster in a group of friends. AOL spokesman Andrew Weinstein said the company was aware of Aimster and was “looking into it.” –