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NetZero Builds E-Toll Bridge to New Revenue

Free Internet service provider NetZero, Inc. Wednesday teamed up with eToll, Inc. to sell users popular software titles at discounted prices.

Launching the new e-commerce initiative as a "Software of the Month" promotion, NetZero's goal is to transform its 5 million-plus subscriber base into active online consumers.

Each month, NetZero users will be presented with the opportunity to purchase a variety of educational and entertainment software titles at discounted prices through the special promotion developed and managed by eToll.

In addition to reseller revenue, NetZero will benefit from eToll's ability to develop consumer commerce services designed to acquire new customers and extend current customer relationships for the free ISP.

As a result of the deal, eToll produced a co-branded Web site capable of supporting multi-currency payment and built an order processing system for NetZero that is fully automated from start to fulfillment.

Brian Woods, NetZero chief marketing officer, said the software promotion is designed to provide another value-added service for its clients.

"This unique promotion furthers NetZero's goal to continually enhance the user's on-line experience by providing direct access to quality products and services like those provided by eToll," Woods said.

A pioneer in online customer retention services, eToll is an application service provider that specializes in managing a business partner's marketing infrastructure. Its marketing outreach includes clients like 3Com Corp. , the American Automobile Association, and American Express .

Brian Jackman, eToll vice president of business development said the software promotion is a great way for NetZero to attract new customers and keep the clients it already serves.

"We have integrated several key consumer e-commerce support tools into one solution and provided NetZero with a fully-managed promotion that will enhance their continued marketing efforts and attract and retain new customers," Jackman said.

NetZero has increased its focus on co-branded marketing and e-commerce initiatives this year. It picked up e-commerce partner Global Sports, Inc. in May. As a result of the deal, NetZero is creating customized ISP services for major sporting good retailers, including Oshman's Sporting Goods, Sport Chalet, The Athlete's Foot, and others.

In June, NetZero formed a co-branding initiative with Aetna, Inc. to provide NetZero services to all of Aetna's healthcare professionals in the U.S.

Although the biggest customer NetZero picked up so far is General Motors Corp. , which signed a four-year, $100 million deal for the free ISP's services and an e-commerce link on its ad bar.

All the wheeling and dealing is stabilizing NetZero's potential profit center and transforming the free ISP from its advertising-based subsistence, to a powerful e-commerce and marketing partner that is intent on rivaling fee-based online leader America Online, Inc. .

By diversifying its revenue streams, NetZero is no longer dependent on advertising revenues as the financial fuel to build its online community of free dial-up users. The no-fee ISP is essentially liberate to fulfill its role as the self-proclaimed "defender of the free universe," or at least conquer it.