Gartner Survey Shows AOL Having Difficulty Winning over Consumer's Trust.

Business/High Tech Editors

STAMFORD, Conn.--(BUSINESS WIRE)--Aug. 23, 2001

Gartner Analysts Say Consumer Trust to Be an Important Indicator

of Internet Services Success in the Years to Come

As the battle between Microsoft and AOL heats up, a new survey by Gartner, Inc. (NYSE:IT and ITB) shows many consumers have a higher level of distrust for AOL.

According to the new survey of online adult consumers, AOL Time Warner is the least trusted company on the Internet when compared to banks, brokerages, credit card companies, Amazon.com, large retailers, and Microsoft.

AOL earned very poor trust marks with 37 percent of all online consumers claiming a high level of distrust for the company. Microsoft fared better, with 29 percent who are highly distrustful of the software giant.

On the flip side, 17 percent of consumers say they have very high levels of trust in Microsoft while 15 percent say the same about AOL. Microsoft's consumer trust ratings are equivalent to the ratings earned by brokerages.

"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 survey also points to online privacy and security as the two largest concerns of online users when using the Internet; consequently the trust factor is a pertinent barometer of future consumer adoption of new Internet services. Other consumer attitudes and dynamics discovered by the survey also seem to work in favor of Microsoft and to the detriment of AOL.

-- Microsoft received higher consumer satisfaction ratings than AOL did on its
ISP and e-mail services. AOL got higher marks on its instant messaging service
but 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 it once the service started popping up on
their screen when they tried to connect to the Internet. Another 4 percent of
the online consumers said they would in fact switch to the Microsoft service.
Just less than two-thirds said they would stick to their current service.

"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," said Litan. "Consumers tend to follow the path of least resistance, and if it's easier for them and their buddies to make the move to Microsoft Messenger, they will."

Gartner analysts will provide further analysis on this issue during the Gartner Symposium/ITxpo 2001, October 8-12 in Orlando, Florida. Attendees will be able to choose from more than 250 in-depth, analyst-led sessions that explore IT inside and out. Gartner analysts will show how companies can align and manage their IT strategies and investments for bottom line advantage. More information on Gartner Symposium/ITxpo 2001 is available on the Gartner Web site at http://www.gartner.com/symposium/us. Members of the media can register by contacting Lisette Kwong at 212/320-2330 or at [e-mail].

Gartner, Inc. is a research and advisory firm that helps more than 10,000 clients understand technology and drive business growth. Gartner's divisions consist of Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. Founded in 1979, Gartner, Inc. is headquartered in Stamford, Connecticut, and consists of 4,600 associates, including 1,400 research analysts and consultants, in more than 80 locations worldwide. The company achieved fiscal 2000 revenue of $855 million. For more information, visit www.gartner.com.