America Online reportedly has announced its intent to purchase Mirabilis, the Israeli company behind Internet messaging software ICQ, for a stock and cash deal valued at more than $300 million. ICQ is a free Internet paging utility that allows Internet users to chat, send instant messages and transfer files. Sound familiar? That's because Mirabilis is a direct competitor to AOL's Instant Messaging Service, which also allows Internet users to chat, send messages and transfer files. Both products are immensely popular, attracting tens of thousands of new users every day. Both products allow users to maintain lists of friends also using the service and will alert them when those friends are online. Both offer support for Internet Telephony, so users can talk to each other over long distances without incurring long-distance expenses. AOL's Instant Messenger comes bundled with Netscape Communicator. Mirabilis, which has seen as many as 57,000 new subscribers in a single day, currently boasts an undeniably impressive user base of 11.5 million. But that figure pales in comparison to the number of subscribers to AOL's Instant Messenger Service, which at more than 20 million generates more than 225 million messages daily. Analysts say that with a combined user base of more than 30 million subscribers, AOL may be able to turn a profit on the deal through advertising revenues alone, and however expensive, the results will help AOL meet its goal of expanding its Internet messaging service. But will ICQ users, who always have had the option of using one service over another, react favorably to the buyout? Feedback from ICQ subscribers in various newsgroups and Web sites has been less than favorable. Many users seem concerned that with such a significant market share, AOL may begin charging for the service, or will damage it in some way. At the very least, loyal fans of ICQ seem to feel that the server will experience a certain loss of luster if AOL affixes its logo to their beloved product. "Personally, I am disappointed at the acquisition. AOL's reputation on the Internet is extremely poor," posted one reader. Another, in a posting on ZDnet's "Talk Back" service, compared AOL to McDonald's and expressed concern about the ISP's reputation for poor service. Regardless of what happens, neither company has commented on the deal, though talks have been under way for some time. According to the Israeli business newspaper Globes, the two companies have been negotiating for months. AOL, which has seen its stock triple in value over the past year and a half, wants to make the purchase in a combination stock/cash transaction, but the founders of Mirabilis aren't interested in AOL stocks. Sega Teams With Microsoft for New Console Sega Enterprises has announced development of a new high-power home video game console that is says will out perform virtually all in-home gaming platforms and many arcade systems. The new system, called Dreamcast, will ship in Japan later this year, but customers in the United States will have to wait until 1998 to get a look at it. Using a 128-bit RISC processor with an independent 3-D graphics engine and sound chip, Dreamcast promises a substantial performance increase over anything currently available. The console also offers standard networking features for multiplayer gaming. Microsoft will provide a customized version of its Windows CE operating system with DirectX services that has been optimized for console-style gaming. Windows CE provides Dreamcast developers a flexible, versatile development environment supported by Microsoft Visual C++ 5.0 that makes title development more efficient. Windows CE with DirectX has been hand-tuned to be small and fast to provide superior performance specifically targeted at the Sega Dreamcast hardware architecture, giving developers the confidence that software developed for Dreamcast will take full advantage of every hardware capability in the system.