The world's largest computer and telecommunications companies are engaged in a mad scramble to win customers.

And the prize is worth fighting for.

With the number of people and businesses using the Internet increasing rapidly, there are huge opportunities to make money out of subscriptions, advertising and providing software to Internet users.

In effect the Internet is finally coming of age.

More people than ever are surfing the Web

In the US it is already appealing to a mass-market, and the same pattern could soon develop in the UK.

As the market has grown so has the level of corporate wheeling and dealing.

There has been a rapid consolidation among Internet companies.

Now America Online's (AOL) acquisition of Netscape, two of the Internet's best known brands, could set about a train of events that transforms the industry.

Shock waves

The coalescence of two desk top favourites has sent shock waves reverberating around the computer software world.

Not only will AOL now be a formidable opponent to Microsoft, it is likely to be a dominant force in shaping the future of the Internet.

British Telecommunications, the UK's flagship phone company, has also signalled how important it believes the Internet will become to its future development.

It has just taken a 50% stake in the UK business of well known US Internet group Excite.

In fact City observers point to the fact that BT's main reason for teaming up with US telecommunications giant AT&T is to develop a transatlantic Internet business.

Deal making

Indeed the AOL deal is likely to lead to a host of mergers and acquisitions across the Internet industry.

The logic is simple.

The bigger you are, the more money you can make from subscribers and advertisers in a market enjoying explosive growth.

However there are several other reasons why Internet companies are rushing to join forces.

The secret to success on the Internet is developing and cultivating recognisable Internet brands which attract large numbers of people.

On the crest of a wave

With about 120 million people around the world already using the Internet, retailers are waking up to the fact that surfing the Web is not now just the preserve of computer anoraks.

On the one hand that represents an opportunity for existing Internet operators, in that they can capture more business.

However large businesses already have well known brand names which are likely to compete with the existing Internet heavyweights.

By clubbing together now computer software companies are trying to ensure they will continue to remain a major force on the Internet.

All rounder

AOL's move for Netscape also has a lot to do with its goal to create an all-round Internet operation, a fact that will become increasingly important in an intensely competitive market.

Netscape has a strong position servicing business clients which AOL craved.

Finally there is the onset of digital television, where customers will be able to use the Internet on their television screens.

Not only is this likely to increase the number of Internet users significantly, it promises to hasten change in the industry.

Watch out

Analysts point out that AOL, Netscape and Sun Microsystems, which is also involved in the takeover deal, would be in an ideal situation to provide the US customers with set-top boxes needed to decode digital television signals.

Digital television broadcasts get underway in earnest next May in the US, and it is likely to be the new battleground for Internet customers.

Microsoft has already paid $400 for WebTV because of just these concerns.

AOL's deal with Netscape is just the opening line in a whole new chapter for the Internet.