Microsoft to Help CompuServe Move Its Service to Web, Provide Software

The fast-changing world of online computing lurched in another unexpected direction Tuesday as software powerhouse Microsoft Corp. agreed to help CompuServe, the nation’s second-largest online service, move its operation to the Internet’s World Wide Web.

The alliance between the two companies--until recently bitter enemies--is similar to Microsoft’s recent deal with market leader America Online in that Microsoft will enable users of its Windows 95 software to connect to CompuServe just by clicking on an icon.

But Tuesday’s deal goes even further: CompuServe will use new Microsoft software, based on the Windows NT computer operating system, as it migrates its service from proprietary computers to the Web, the multimedia portion of the Internet.

The alliance is part of Microsoft’s battle with upstart Netscape Communications Corp. to dominate the Internet software business. Microsoft aims to make Windows NT and the special Internet software that goes with it the standard for the heavy-duty computers that store and distribute Internet information.

But thus far many companies have preferred computers using the Unix operating system and Netscape software.

For CompuServe, the alliance gives it a major new distribution channel: the millions of copies of Windows 95 now installed on computer desktops. While Microsoft had once intended to provide direct access in Windows 95 only to its own Microsoft Network--a position that led CompuServe, America Online and others to call for government antitrust action--it has now come around to seeing the value of linkups with its large rivals.

Both Columbus, Ohio-based CompuServe and Vienna, Va.-based AOL have said they plan to make Microsoft’s Internet Explorer Web browser the primary means through which their members will be able to access the Internet.

Analysts said the biggest surprise in Tuesday’s announcement is that CompuServe will rely on Redmond-Wash.-based Microsoft in moving its content to the Web.

“The significant thing here is that CompuServe is going to be entrusting its entire infrastructure to a competitor,” said Ross Rubin, a senior analyst at Jupiter Communications, a New York research firm. “If Microsoft can prove it’s a viable hosting platform for an organization as large as CompuServe, they will have a valuable product on their hands.”

With the agreement, CompuServe Chief Executive Bob Massey said, his company will be “delivering our online service to a huge potential number of users” of Windows 95. CompuServe has about 4.5 million subscribers worldwide, while America Online has about 5.5 million, mostly in the United States.

“I think it’s a good deal for both companies: Microsoft gets together with the second-largest commercial online service and they [CompuServe] get better access” to Windows 95, said Lou Kerner, an analyst with Merrill Lynch.