The new service, AOL TV, could give couch potatoes yet another means to surf the Web at high speeds. But the announcement was also intended to soothe investors on Wall Street. They fretted that AOL had been left in the dust by AT&T and its alliance with Microsoft to deploy cable modems. Though the service won’t launch until next year, investors appear pleased that AOL finally has a plan–one that also tweaks its newly bonded rivals. In the pact, AOL partnered with Network Computer, a unit of Microsoft’s archfoe Oracle, and Hughes Electronics, which was recently headed by AT&T’s current chairman.
The AOL TV announcement also rekindled a nagging gearhead debate: Which high-speed delivery system–cable, digital phone lines or satellites–will win? Fact is, consumers would probably get their Internet access from a mule so long as he stepped lively enough. The real fight won’t be over zippy technology but over which “TV portals” will usher consumers to the high-speed Web and interactive TV the way Yahoo! and AOL do on today’s Internet. Predicts Forrester Research analyst Josh Bernoff: “It’s a bloody war on the horizon.”
