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Excite@Home Ushers in Free Access

Excite@Home Corp. Thursday launched its free Internet access service.

Dubbed FreeWorld, the no-cost Internet service is powered by technology from 1stUp.com, a CMGI, Inc. (CMGI) company.

George Bell, Excite@Home (ATHM) president, said Excite aims to breakdown the cost-barriers associated ith getting online, enabling consumers across US and Canada to enjoy free Internet access.

"The narrowband market is clearly moving from a cost-based to a free access model, putting pressure on pay for access ISPs," Bell said. "Encouraging mass adoption of the Internet is fundamental to our business model, and we expect to take full advantage of the projected growth in the free ISP arena."

Bell added that Excite@Home is leveraging their diverse content to increase their market share by acquiring new customers in an increasingly competitive industry.

"Once online with FreeWorld powered by Excite, we increase audience and reach for Excite and Blue Mountain Arts content, and gain the opportunity to market our leading, high-speed @Home broadband service to new subscribers," Bell continued.

"We have already shown tremendous synergy in using our MatchLogic ad targeting division to upsell narrowband users to broadband, and this will increase our narrowband target audience significantly," Bell said.

Charles Katz, 1stUp.com president and chief executive officer, said why pay for Internet access when free services are now a competitive prerequisite.

"FreeWorld powered by Excite proves that people no longer need to pay for dial-up Internet access," Katz said. "Like free Web-based e-mail, free access is now a requisite offering for any competitive Web site."

Ben Addoms, Excite@Home president of media and marketing services, said Excite's network infrastructure and @Home backbone architecture provide the company with a thorough understanding of how to manage costs related to offering free services.

"FreeWorld gives Excite@Home the opportunity to increase revenue and customer loyalty by leveraging the company's core competencies," Addoms said. "With the ability to offer advertisers targeted marketing through our MatchLogic division coupled with content areas that have some of the longest dwell times in the industry, we are in a strong position to monetize the FreeWorld service."

Like other free Internet access providers, Excite@Home's business model is based on advertising revenues. Registrants for the free service must provide demographic information in order for Excite@Home to deliver targeted advertising programs for its sponsors.

However Rick Miller, Cahners In-Stat Internet analyst, said free Internet access is simply not a profitable venture.

"Advertising revenues will never off set the costs of providing access on the Internet so you need to use a free service and a means to compliment and upsell some form of revenue generating service," Miller said.

"If they want to do that it's at least it's a half-baked idea not a completely unbaked idea," he added.

Miller said the move to provide free narrowband access does not make sense for a broadband service provider.

"I don't know if they had to go to this effort, traditional dial-up services by their traditional slow nature should be driving customers to Excite@Home or some other form of high speed access anyway," Miller said.

Bill Whyman, Legg Maso