RealTime IT News

Spinway's Deal With HP Is Just The Ticket

Co-branding Internet service provider extraordinaire Spinway Inc., is on the move again Monday, this time offering its free service on all Hewlett-Packard Co. Pavilion home PCs.

The co-branding deal, called FreeTicket ISP Service, puts an icon on all Pavilion PCs and directs interested customers to a special home page featuring Spinway, Yahoo! Inc. and Hewlett-Packard features and services.

The Pavilion is marketed for home users and ranges in price from under $600 to around $2,100. Hewlett-Packard has struck a number of co-branding deals with other ISPs, but Spinway marks the first free Internet provider.

Steve Seabolt, Spinway chairman and chief executive officer, said its something customers have come to expect when they buy a home PC.

"Consumers today have come to expect Internet access when they power up their new PC for the first time," Seabolt said. "We are taking bundled Internet access one step further by offering it for free. Our rapid growth is based on our unique strategy to partner with a select group of large brand leaders to co-brand a free ISP for their customers. FreeTicket now enables us to reach a large percentage of HP Pavilion users as well."

Seabolt knows a thing or two when it comes to co-branding his company's free Internet services with a well-known name brand; in fact, it's the reason why his company has risen from obscurity last year to become the eighth-largest ISP in the U.S., with 6 million total users, about 1.7 million of which are active users.

The ISP has reaped its huge subscribers number through alliances with bricks-and-mortar companies like KMart, Barnes & Noble and Costco. These "real-world" companies act as virtual ISPs, with its name featured on the Web page and Spinway sitting in the background providing the service and support.

It's a working relationship that suites both sides. For Spinway, the ISP gets a large amount of subscribers and a bankroll from the bricks-and-mortar companies, who see VISP service as another marketing endeavor without having to spend a fortune on infrastructure.

According to Steven Harris, IDC's ISP market senior research analyst, it's a model that's seeing some financial success.

"There are two tracks free ISPs are taking, either the ad revenue generators like NetZero Inc. or the virtual ISPs like bluelight.com," Harris said. "It's a good deal for companies like Spinway, as long as the big companies continue to fund the service. For a lot of these companies, its just a drop in the bucket of their marketing budget, and a good deal for them."