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AOL Expands Digital Cities, Takes On Ticketmaster Online

By Chet Dembeck
Oct 19, 1999 12:00 AM PT

In a move seen by some analysts as an effort to trump chief rival Ticketmaster Online-CitySearch, AOL announced yesterday that it is expanding its Digital City guides from 60 to more than 200 cities by early next year.

AOL Expands Digital Cities, Takes On Ticketmaster Online

Both companies currently offer local entertainment listings, tourist guides, restaurant listings, dating services and ticket ordering. However, according to July figures from Web tracker Media Metrix, Ticketmaster Online-CitySearch pulled out in front of Digital City in popularity by registering 8 million user visits as compared to AOL's 5 million.

Largest Footprint

Confirming this growing drawing power of local content is the 1999 America Online/Roper-Starch CyberStudy. The report found that 54 percent of users who have been online at least one year check local entertainment offerings.

To take advantage of this growth, AOL said that its expansion of Digital City will make it the leader in local content arena, with the largest national footprint of any local content provider.

"Digital City's expansion plans will strengthen our lead as the number one content provider and position us for continued growth as local online content becomes increasingly important to consumers," said Paul DeBenedictis, president of AOL's Digital City.

Challenged By Ticketmaster Online-CitySearch

All the same, AOL's fierce competitor Ticketmaster Online-CitySearch seems to have similar plans.

In July, Ticketmaster Online CitySearch paid Microsoft about $240 million (US$) in stock for competitor -- which was about $200 million in the red.

A month earlier, it also snagged the nation's two leading online dating services. Some analysts feel that acquiring these properties was a brilliant maneuver, since personal ads now give CitySearch more than 400,000 active users who pay as much as $25 per month. Personal ads also fuel much of Digital City's success.

By making these acquisitions, Ticketmaster Online-CitySearch was able to build up its holdings to a total of 77 guides, as compared to Digital City's 60. Additionally, it secured distribution deals with Lycos, MSN and Excite@Home, giving it access to more traffic than AOL

High Stakes

Ticketmaster Online-CitySearch's marketing blitz and AOL's quick response has proven that the coveted local markets are worth fighting for.

For example, according to a report by Forrester Research, the local Web market for advertising alone will grow to $1.7 billion by 2003. In the future, some analysts even predict that local newspaper and TV markets could be soundly challenged by such online content.

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