EarthLink Thinks About Cutting Loose

EarthLink has always embraced new value-added services and new forms of broadband as they became available, but its next foray into unexplored territory may be its biggest ever.

by Alex Goldman ISP-Planet Managing Editor [August 12, 2004]

Atlanta, Ga.-based EarthLink is perhaps the only ISP in the world that offers broadband over DSL, cable, satellite, and even power line. It also provides webhosting, anti-spam, anti-spyware, anti-virus, parental controls, and much more.

Although some experiments have failed, such as the portable e-mail device called the MailStation, and others have not been very successful, such as the Personal Start Page, which has not changed the face of broadband (see EarthLink Says Broadband Should Look Like This), the company offers every service that any ISP offers on the Internet.

So what could the ISP possibly add?

Michael Lunsford, EarthLink's Executive Vice President of Marketing and Product, says that the company in the past has failed to merge its marketing strategy with its products. In many cases, innovation has been ahead of advertising and pricing.

To change that, he is re-imagining EarthLink's mission. Lunsford feels that the competition, such as AOL and MSN, are looking for content strategies and leaving behind their core competence in infrastructure. Rereading Om Malik's thoroughly enjoyable (though slightly flawed) book Broadbandits: Inside the $750 Billion Telecom Heist, we find Malik arguing that this is exactly how @Home was destroyed (in Chapter 7: Nobody@HOME). Excite@Home was far less than the sum of its parts.

Ironically, though, EarthLink does have a content strategy. Though nascent, its TV offering is quite interesting, as described by Gerry Blackwell in The Online Video Jukebox. Through content aggregator Synacor, the company has signed a deal to offer several sports packages to subscribers in one monthly fee.

Finding a disruptive path to profit
But that's not where the future of EarthLink lies, says Lunsford. Imagine Internet services as two intersecting axes. One axis is services, such as content. The other axis is infrastructure, such as servers and wires.

At least, that's how it is in the wired world. In the wireless world, RBOCs and users alike are finding that the service provider controls and provides everything.

Wireless is truly disruptive, and Lunsford believes that only a non-facilities based ISP will be able to take advantage of it, because the facilities based companies have legacy revenues to protect, whether they're phone companies, cable companies, or even Microsoft.

"We're not wedded to a specific OS," says Lunsford. "That's very important in executing the ASP model."

Questions remain
Joe Laszlo, Jupiter Research senior analyst for broadband and wireless, agrees that a strategy combining wireline broadband and wireless voice is promising, but says EarthLink will have to find ways to justify the bundle to its users. "Bundles do lower churn, but you have to ask the question: do the services you're offering complement each other in a real way? EarthLink will have to provide more than the ability to get your voice mail by e-mail (and vice versa)."

Lunsford says the killer app may be as obvious as downloadable music. "Maybe you can download a U2 song a week before the album's released. Even if you could do it on a cell phone, you might find yourself paying $6 per song. So can we deliver an iTunes price? Sure! The answer is Wi-Fi."

Additional services the company could deliver to the latest Treo-like or Blackberry-like device include presence management, in which you're always online, or even online to some and invisible to others.

Do people want real time communication all the time? Do they want access to the Internet wherever they are, all the time? Do they want to merge the benefits of cell phone, PC, and TV onto one portable device that becomes both a portable office and a portable home entertainment center? Is all of this doable?

These are the questions EarthLink is asking now. The ISPs of the world will be watching with interest as this pioneer explores the answers.

If the company can build a worlwide Wi-Fi network, it will do so with allies such as Boingo for infrastructure and Treo or RIM for devices. It will be connecting other companies as much as it will be contributing its own resources. That's what a non-facilities based ISP does.

— End