Consumers distrust AOL more than MS: Gartner

STAMFORD: Consumers are more distrustful of AOL Time Warner Inc., than arch

rival Microsoft Corp., which has been the target of competitive concerns for

years, according to a Gartner Inc. survey of adult online users released on

Thursday.

AOL Time Warner, which prides itself on consumer privacy and security issues,

is the least trusted company on the Web when compared with banks, brokerages,

credit card companies, online bookseller Amazon.com Inc., large retailers and

Microsoft, the survey found.

About 37 per cent of online consumers said they had a high level of distrust

of AOL Time Warner, compared with 29 per cent who said they were highly

distrustful of Microsoft.

Since the closing of AOL's $106.2 billion purchase of Time Warner Inc. in

January, the Internet and media giant has experienced some of the same backlash

that software giant Microsoft has endured in recent years because of its size,

reach and power.

Gartner said consumer trust is going to be an important indicator of Internet

services success in the years to come. "The added trust that consumers have

in Microsoft gives the company an important leg up in its battle with AOL for

online services. Consumers will be more likely to try new Microsoft features

embedded in Windows XP, such as Microsoft Messaging," said Avivah Litan,

vice president and research director for Gartner.






"AOL has always viewed itself as the 'consumer's advocate' but this survey
clearly dispels that myth." The findings come amid Microsoft's aggressive

battle to take away market share from AOL Time Warner as Microsoft bulks up its

Internet presence and services. The survey found online privacy and security to

be the two largest concerns felt by users of the Web.

Microsoft also received higher consumer satisfaction ratings than AOL did on

its Internet service provider and e-mail services. While AOL got better marks on

its popular instant messaging service, the survey found that loyalty among AOL's

instant messaging users is limited.

Nearly one-third of all non-Microsoft instant messaging users said they were

"not sure" if they would switch to Microsoft's messaging service once

it started popping up on their screen when they tried to connect to the

Internet. Just less than two-thirds said they would stick with their current

service.

The finding comes as Microsoft prepares to integrate an instant messaging

service into its new operating system. "In its attempt to capture more of

the instant messaging market, Microsoft is not facing as an entrenched and loyal

AOL instant messaging customer base as one would imagine," Litan said in a

statement.

(C) Reuters Limited 2001.