CompuServe, the UK’s largest Internet company, is to retreat from the consumer market in the US and focus much of its marketing energy in the UK on the business sector.
The move is an admission that the organisation cannot compete with its US and UK competitors which include America Online, Microsoft Network, Virgin Net and Springboard, the upcoming BT News Corporation Internet venture.
These operations have multimillion pound marketing budgets and are focused on bringing the Internet to the mass consumer market.
In the US, the company closed its consumer service called WoW! last month because of low consumer take-up.
In the UK, it aims to make corporate work account for 50 per cent of its business; it currently accounts for about 30 per cent.
A CompuServe spokeswoman says its business-to-consumer balance will be shifting from next year. “There will be more focus on small businesses and corporate clients. We believe the base for the general consumer is quite small, made up of professional people who already have some connection with information technology.”
In the summer, the company suffered a massive cut of about 100m from its global marketing budget. However, CompuServe has refused to confirm this. This led to the resignation of senior marketing personnel on both sides of the Atlantic, who felt they could no longer do the job they were hired to do. In the US, vice-president for marketing Cynthia Vahlkamp resigned. In the UK, marketing director Alan Lawson, European marketing communications director Michael Williams, and CompuServe vice-president international Steven Stanbrook all resigned within two months of each other.