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THE SOFTWARE. Monday-morning quarterbacks wonder just what precisely AOL is now. Since its humble birth in Vienna, Va., as Quantum Computer Services in 1985, the company has focused on one thing: creating an attractive online experience for the average schmo who can barely plug in his PC. It was a smart plan whose execution has been more or less perfect. The catchy populist name. That effortless user interface. Those millions of free starter discs. Those infamous chat rooms. And, of course, that cheerful robot chirping, "You've got mail" (now the title of a romantic comedy coming soon, via Tom Hanks, Meg Ryan and two humming laptops, to a multiplex near you).
It all worked. AOL went public in 1995 with fewer than 200,000 subscribers. Today that number is 14 million and climbing, courtesy of a laser-beam consumer focus that may be precisely what the new company lacks. AOL has long since won the Net's largest mass audience, and through hundreds of sales alliances with companies, from Barnes & Noble to 1-800-FLOWERS, that audience is getting accustomed to the idea of the Net as one vast cash register. Now Case is gambling that as e-commerce grows from a novelty to the bedrock of 21st century capitalism, AOL can--perhaps must--become a major player in the lucrative "enterprise" market, helping corporations large and small move their operations online. "Companies who want to work with us are interested in a lot more than us promoting the site," says Case. "They want us to help build the service." It's another smart plan, but executing this one will mean battling not upstarts like Prodigy and CompuServe but behemoths like IBM and Microsoft.
Good luck. The smart guys in Silicon Valley, whose condescension toward AOL has risen in direct proportion to its embrace by the public, have never considered the company a serious technology player. "America Online has built an exceptional franchise on a technology base that could charitably be called dated," says Roger McNamee, founder of the high-tech investment firm Integral Partners. "It has been difficult for its partners to work with, and for AOL itself to maintain." How can the company possibly hope to compete in the corporate networking market if its own network is held together with Scotch tape and baling wire?
By marrying Netscape and taking Sun as a mistress, that's how. Netscape gives Case both a battalion of geek programmers and the software they've been working on, from industrial-strength Web tools to the back-office e-commerce programs that Netscape CEO Jim Barksdale was peddling to corporate customers before he abruptly, and wisely, folded his cards.
But the soul of AOL's newly empowered machine may turn out to be Scott McNealy, the brilliant, voluble CEO of Sun Microsystems. McNealy has been flacking his "the network is the computer" vision for years, pitching his Web-focused Java language as the platform on which to build a new generation of cheap, single-purpose network appliances, from TV set-top boxes to cell phones, that could finally break Microsoft's stranglehold on the digital universe. His deal with AOL--which also puts Sun's 7,000-strong sales force to work selling Netscape's e-commerce software--marks the official inauguration of a coalition that the industry had long since dubbed ABM: Anyone But Microsoft.