Web giant Yahoo and retailer K-mart are expected to announce a partnership
to provide a co-branded free Internet access service. In a deal first reported by the Wall Street Journal, Excite@Home is expected to offer its
own free dial-up Internet service in hopes of attracting a larger customer
The Yahoo and K-Mart service will be offered through
Bluelight.com, a planned Kmart e-commerce site and will be powered by
Spinway, a free
ISP(Internet Service Provider). Yahoo will become the interface for the
co-branded service on Bluelight.com. Excite@Home plans to offer their
service using technology provided by 1stUp.com, a CMGI-owned company that
also has a deal for free access with AltaVista. Excite@Home already is the
largest provider of high-speed Net access over cable networks and recently
topped 1 million subscribers. But with tens of millions of Internet users
using dial-up technology to access the Web, the company and its advisers
have long contemplated a separate dial-up offering.
With their own dial-up service, Excite@Home can maintain a relationship with
Net users who can't or don't subscribe to their high-speed service that runs
over cable television lines. Because cable television systems require
expensive advances and upgrades before they can deliver the Internet access,
the service is available in only a few markets.
News of the expected deals come as more and more Internet heavyweights are
turning to "brick and mortar" retail chains to add previously untapped
consumers to their services because of the trend towards slower Internet
growth in recent months. Microsoft recently announced a deal with RadioShack
to market its services and America Online is also expected to announce a
similar cross-marketing deal with Wal-Mart.
The free ISP's all work in basically the same way and require users to
download an interface that sends advertisements to them. By doing so, the
company can track user behavior and habits and, with the information, they
can sell spots on their software to advertisers looking to target their
product to specific population segments.
Free Internet access has made relatively obscure ISPs such as 1stUp.com and
NetZero two of the fastest growing ISPs in the industry. NetZero now claims
2 million subscribers, effectively putting it in the No. 2 position behind
America Online. By comparison, AT&T WorldNet has about 1.8 million users and
EarthLink Network has approximately 1.6 million.
FreeI.Net, another free ISP, crossed the mark for 1 million subscribers.
Along with the other leading free services, this puts it squarely in the top
10 ISPs nationwide, slowly moving towards mainstream industry players like
Prodigy. Most free service firms have yet to make any profits, but they are
becoming creative in finding ways to reach subscribers with tightly targeted
advertisements. These targeted ads should boost potential revenue streams
and keep these free services viable for the short term and possibly even the