AOL quietly plans to sell business services

While an economically bruised AOL Time Warner Inc. (AOLTW) has publically pledged to return to health by concentrating on its AOL Internet plans, the company has perhaps understandably kept under wraps the fact that part of those plans center on leveraging America Online Inc.’s instant messaging (IM) platform to edge its way into the business services market.

AOL’s move into a market well-staked out by Microsoft Corp. could leave the rivals in another face-to-face battle much like the one they fought in the browser space. But this time they’d be duking it out over the corporate IM market, which has yet to be claimed by one major player, analysts say.

Until recently, AOL has channeled its business services ambitions through its iPlanet E-Commerce Solutions alliance with Sun Microsystems Inc. AOL and Sun created iPlanet in 1998 in order to build a software platform for developing Web services. AOL had just purchased Netscape Communications Corp. and the idea was to combine Netscape’s assets with Sun’s Java technologies. AOL’s three-year contract with Sun expired in March, however, and the Internet giant has apparently decided to go it alone. Sun took possession of the iPlanet properties and rebranded them under the company’s Sun ONE line.

While the iPlanet alliance was a profitable one for AOL analysts said the companies did not mesh well.

“It was a lousy alliance. It was based on the enemy of my enemy is my friend,” said Jupiter Media Metrix Inc. Research Director Michael Gartenberg, speaking of both AOL and Sun’s rivalries with Microsoft.

But AOL still wants to eke value out of its Netscape acquisition. While no public announcements of its plans have been made, over the last six months the company has been busy packaging Netscape and AOL assets to create an AOL Strategic Business Solutions division, according to sources close to the company. A Web site built to sell its services ( centers on enterprise IM services, calendar and collaboration tools and content services.

The Dulles, Virginia, company dismisses claims that the Strategic Business Solutions group is anything new, however.

“This is an evolution of the company’s activities in the enterprise space which date back to our acquisition of Netscape,” said AOL spokesman Marty Gordon.

Whether the services are new or not, it makes sense that AOL would want to keep its business services plans low profile, according to Gartenberg.

“The last thing they want to do is challenge Microsoft on its own turf,” Gartenberg said. “It makes sense for them to quietly sign a contract here and there.”

After all, Microsoft has been laying the groundwork for its own high-profile .Net Web services initiative for quite some time.

AOL’s advantage may lay in its IM platform, however. Its consumer IM product, AIM, boasts some 34 million users and has proved fierce competition for Microsoft’s MSN Messenger.

This means AOL has a shot at controlling the wide-open corporate IM market, according to Gartenberg.

Whether the Strategic Business Solutions division eventually steps into the spotlight remains to be seen. But if it does, analysts say the ground is set for another major Internet showdown.

AOL is online at

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