BUSINESSWEEK ONLINE:   Business Week ebiz
Q&A with Steve Case September 16, 1999 "At the Epicenter of the Revolution" AOL's Steve Case talks about the opportunities for fundamental change brought about by the Internet Using a combination of subscription fees, online advertising income, and electronic commerce revenues, America Online Chairman and CEO Stephen M. Case has created one of the first Net ventures with a profitable business model. Now, Case is focusing on making AOL ubiquitous, no matter what kind of communications device you use. Case recently talked with Business Week Washington Correspondent Cathy Yang. Here are edited excerpts of their conversation: BW: What is AOL's contribution to the world of e-biz? Case: We were an early pioneer of identifying this as an opportunity. Instead of viewing the PC as a productivity machine that runs productivity software, we turned it into a communicating device. We recognized that it's not just about software or content, but building a sense of community and engaging people. Particularly in the last few years there's been a growing interest in the concept of interactive services, a growing awareness and adoption of AOL. We've emerged as a leading company in this space. We have far and away the largest audience and the widest array of partnerships. We've become a blue-chip company in the Internet space, an innovator over a long period of time, a survivor over a long period of time. We've tried to be nimble and responsive to the needs of consumers and partners, and embraced new technologies. We've been through a handful of market technology transitions, and that's given us perspective, maturity, and a resilience that helps us as we move into the future. BW: What's your vision for the future of AOL and e-biz? Case: Our vision has been the same for a decade. We continue to believe we're building a new medium with a transforming impact on people's lives, and on society, and the economy. We've positioned AOL at the epicenter of that revolution. As more people are connected and habitually connected, are doing more online, whether talking to friends, buying products or serivces, being entertained, more and more people's lives are going to move online. That creates an unbelievably exciting opportunity. That's why we have a shot at being the most valued and respected company in the world if we play it right. BW: Does the new world of e-biz have more room at the top than the old PC kingdom ruled by Gates and Grove? Case: Some of it is a timing issue. Some of it is more a structural issue. In the PC industry in the mid '80s, it wasn't so clear it would be dominated by a couple of companies, and it wasn't clear what companies would lead. In the earlier stages of innovation, there's almost always a flurry of companies. Through a process of Darwinian survival of the fittest and network effects, with increasing returns, you ended up with couple of leaders. The same basic trend will be true here. We're in a period of rapid innovation. The market will consolidate. There will be fewer winners 10 years from now. There's a structural difference [from the PC industry]. This [the Internet] is a far bigger opportunity to change the way people communicate, buy products, and entertain themselves. It cuts across many, many different industries. We're seeing significant change in each of these industries -- media, communications, technology. As technologies converge, markets blur and will redefine how people will live their everyday lives. So there will be more winners, but that won't mean there's not going to be more consolidation. Some companies built around single products today, over time, will be recombined in a way where groups of products share a common infrastructure. I'd be less quick than others to conclude it's a completely new world. [The online industry has] lower barriers to entry, a faster pace of innovation that's fueled by unusually robust capital markets at the venture and public levels. But that was true in the early '80s as well. BW: So after the period of consolidation, will the winners be AOL, Yahoo, Microsoft? Case: Some of those will be the key forces, but maybe there will be others. And maybe it won't be exactly those three. It's hard for anybody to predict for sure. I've been on the record since we went public in 1992 that in the long run, Microsoft and AT&T will be our major competitors. We will emerge a leader in the Internet space, Microsoft in software, and AT&T in communications. There may be others. BW: How will AOL make sure it will have staying power? Case: This a marathon, not a sprint. You've got to be there for the long haul. The dynamics may be right at this moment, but it doesn't mean they were five years ago or will be five years from now. It's who does the best job for consumers, the best job of hiring the best people. That's where the rubber meets the road. The rest is a shift in conventional wisdom. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS LVMH's Arnault: "I Don't Think E-Commerce Will Replace Traditional Shopping" Amazon's Bezos: Nurturing a New Species of Business Webvan's Louis Borders: "We're Building the Last Mile to the Consumer" AOL's Case: "At the Epicenter of the Revolution" Minority and Women Executives: Can E-Biz Become as Diverse as America? Morgan Stanley's Mary Meeker: "Playbooks for the Evolution of Internet Businesses" Priceline's Walker: "It's a Completely New Way of Buying"