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MCI WorldCom Pairs With CompuServe in Portal Play

MCI WorldCom said Thursday that it launched a new portal with content partner Compuserve, in an effort to fill the Internet void left when it was forced to sell its Internet backbone in May, under regulatory conditions necessary for the completion of the MCI, WorldCom merger.

"We're back," proclaimed noted Internet forerunner Vint Cerf, MCI WorldCom's Internet senior vice president of architecture and technology in a press conference held early Thursday.

The new co-portal is "far superior," to the old MCI WorldCom portal, MCI WorldCom said, and will initially launch with twice the number of POPs (points of presence) using the UUNet backbone, totaling 600, with more being added weekly.

Financial terms of the alliance were not disclosed.

The MCI WorldCom-Compuserve portal is available today, offering MCI Worldcom long distance customers UUNET Internet network access for $16.95 per month for the first 150 hours of local access. Non-long distance users can get MCI Worldcom Internet access for that rate for the first three months of use, and then pay $19.95 per month for 150 hours of local access.

"Anyone who's on more than 150 hours has got a serious problem," Cerf joked.

"This is a permanent price," said MCI WorldCom senior vice president of marketing, John Donoghue. "This is not a bait and switch like some other services. We have found that long-term value is really important to customer retention. Our competition has yet to figure that out."

The start page or portal will offer customization by CompuServe with features such as updated news, stock quotes, weather and CompuServe's version of Instant Messenger. Initially 20 Web Centers will be available, with best of the Web information about topics such as travel, personal finance, health and shopping. Local entertainment info, news and classifieds will also be featured. Currently CompuServe claims 2 million members.

In addition, MCI WorldCom said it is leveraging exclusive agreements with eight U.S. airlines, enabling customers to earn frequent flyer miles or flight credits while online and through airline-customized MCI WorldCom start pages that provide links to frequent flyer mileage information, exclusive travel deals and online travel booking through the affiliated airline. Airline partners include: American Airlines, Continental Airlines, Delta Air Lines, Hawaiian Airlines, Midwest Express, Southwest Airlines, United Airlines and US Airways.

New MCI WorldCom Internet customers who sign up through the frequent flyer programs will garner 1,000 bonus miles by adding Internet service to their long-distance package, or one bonus Rapid Rewards flight credit with Southwest Airlines. Customers will be offered sign-up bonuses and five frequent flyer miles for every dollar spent on MCI WorldCom products and services, or one Rapid Rewards flight credit for every $150 spent. Through such incentives, MCI WorldCom partner customer using Internet and long- distance services can earn more than 6,000 miles or six Rapid Rewards flight credits in the first year.

Marketing will include tri-branded pages (MCI WorldCom, CompuServe and the airline), and Audrey Weil, CompuServe's COO said that CompuServe parent, AOL, will handle advertising efforts. Weil said this announcement marked the first time the company is providing content, tools and services to a private label, and would amount to a "significant revenue stream," by increasing brand awareness to millions of MCI WorldCom customers.

"This is an opportunity for a larger alliance with MCI, a deepening of our relationship and leveraging strong marketing muscle," Weil said.

Cerf, Donoghue and Weil said that the companies are not competing against themselves, as in CompuServe's MCI WorldCom port with CompuServe's flagship service.

"I think you're going to see a lot more of these alliances on the Internet," said Weil.

Cerf agreed, saying, "[User] interests will segregate. It's not the case that one size fits all. Companies can now reach targets that haven't been reached before." Cerf cited the telco industry, in which it is commonplace for competitors to align with each in various deals.

"The Internet is becoming a daily tool and source of entertainment for consumers throughout the country," said Cerf. "This market will continue to see tremendous growth and change as consumers become even more savvy about online service and what the Internet has to offer."