You've Got Problems

Or you soon will. America Online Inc.'s acquisition of Time Warner has the potential to create a load of headaches for you. No, not because it means AOL will double your weekly allotment of disks and CDs hawking free online hours, although that is a distinct possibility. The big pain will be competing with Web sites that will be delivering media-rich content to your company's potential customers.

These Web sites will be taking advantage of the new broadband delivery capability that the two companies claim will result from the merger. Simply put: Time Warner is No. 2 in cable systems in the U.S. AOL is the nation's No.

1 Internet service provider. Today on AOL, you can see CBS News slide shows synchronized with sound in a 2-by-2-inch window on your PC. Tomorrow, you'll get full-screen CNN with interactive 3-D graphics and real-time video links.

AOL has been a strong voice for opening all cable systems to any and all Internet service providers, and it claims that the deal doesn't change a thing.

If so, once AOL readies its site for Time Warner's cable network, it will permit other Internet service providers to hop on board. This situation will, I think, force AT&T, the No. 1 U.S. cable operator, to try and wiggle out of its exclusive contract with Excite@Home. Under this competitive pressure, a deal could be struck. AT&T could give AOL access to its cable systems in exchange for Time Warner letting it sell voice services over its cable operations.

No matter. The net result will be more work for you. You'll need to configure and manage servers that can deliver massive amounts of content much faster than they do today; install the biggest, quickest mass-storage systems available -- and then install some more; and pull another T1 line or two to your site because you'll no longer be able to point the finger at an Internet service provider and complain about it as the bandwidth bottleneck. You'll be the bottleneck.

The myth of the Internet bandwidth bottleneck is about to evaporate. Next, we'll be hearing about boring e-commerce sites that are as slow as molasses.

Just make sure they don't belong to you.

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