America Online is pushing aggressively to place its products on PC desktops, now that rival Microsoft Corp is allowing greater access to the prime digital real estate.
Dulles-based AOL is asking computer manufacturers to place icons for its Internet service and its popular Internet message service on the computer desktop. That means that new computer users would be exposed to AOL's products as soon as they turn on the machine.
In return, AOL would pay manufacturers a commission for each new customer AOL gained through such exposure.
The marketing plan is designed to take advantage of a major concession made by Microsoft in the wake of its antitrust trial.
A federal judge ruled that Microsoft has abused the monopoly power it holds through its ubiquitous Windows operating system. Earlier this month, Microsoft said it would give computer manufacturers more flexibility in determining which icons are displayed on the machines running the latest Microsoft operating system, Windows XP.
"When Microsoft announced that it was going to reopen that flexibility to the manufacturers, we certainly wanted to move on that," AOL spokeswoman Kathy McKiernan said on Thursday.
Manufacturers already have some flexibility to reconfigure Windows to do promotions with AOL or anybody else. New Dell computers, for instance, come with an offer of six free months of AOL service that's made available from the desktop.
Microsoft had wanted to rid its new Windows XP system of all such icons, citing customer feedback that the screen was starting to look cluttered.
But the Redmond, Wash., company agreed to restore the icons and thereby give manufacturers the option to place competing products on the desktop.
A flatulent green ogre stole the limelight at Microsoft's annual pitch to Wall Street analysts on Thursday. In the first public showing of one exclusive Xbox title, Microsoft games evangelist Seamus Blackley played "Shrek," a game based on the hit animated movie from Dreamworks studios.
Startling the audience, Blackley showed how players controlling the grumpy green ogre would accomplish missions by stunning their enemies with flatulence.
By eating spicy peppers, Shrek can also emit fiery belches, which when combined with the flatulence can produce a gastrointestinal weapon of considerable power.
"He can ignite the fart," Blackley said.
Blackley also showed off "Dead or Alive 3," a fighting game featuring realistic shadows, detailed landscapes and areas that can be explored. "For a hard-core gamer seeing this in a store for the first time this is absolutely a freak-out experience," Blackley said.
Microsoft said AOL, part of New York-based media giant AOL-Time Warner Inc, is using the agreements to try to push Microsoft's competing products off the desktop.
"They're paying the manufacturers to strip out access to our technology," said Microsoft spokesman Vivek Varma. "That, we believe, is bad for consumer choice."
McKiernan would not discuss the specifics of the deals AOL is pursuing, but she said the plan is to give customers an alternative to Microsoft's products, not a replacement.
"It's all about customer choice," McKiernan said. "But monopolists never like competition."
AOL, with more than 30 million subscribers, is by far the world's largest Internet service provider. But Microsoft's MSN service has been making steady gains in recent months, taking advantage of AOL's decision in May to increase prices by 9 percent.
Microsoft announced Thursday that MSN now has 6.5 million subscribers, an increase of 1.5 million in less than two months.
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