RealTime IT News

Free Ride Ends for One ISP

WorldSpy became the first substantial free Internet access provider to cease operations in the U.S. last week when it announced that it would terminate services at the end of June.

Sharon Rothstein, WorldSpy chief executive officer and president, said that competitive forces forced the free ISP to succumb to operating costs.

"While we were encouraged by our growth in subscribers, given the current financial market conditions, this deal with Juno was our best alternative," Rothstein said.

Juno Online Services Inc. worked quickly to entice WorldSpy's 260,000 active users to its cadre of Web and dial-up services.

Charles Ardai, Juno's president and chief executive officer, said the deal strengthens its position in both the free access and fee-based market segments.

"We are excited about this opportunity to expand Juno's reach and strengthen our position in the market," Ardai said. "WorldSpy has built a sizable audience of loyal users, and we are honored to welcome them into the Juno family."

Juno laid out the terms of its subscriber referral agreement with WorldSpy.com, which will receive compensation in the form of Juno common stock for each former WorldSpy subscriber who becomes a Juno user during a 90-day subscriber transition period.

WorldSpy subscribers who convert to Juno will be able to continue receiving e-mail sent to their WorldSpy e-mail address, and will continue to receive free access to the Web. WorldSpy users will have an option to upgrade to one of Juno's billable premium services, including its broadband access plan dubbed Juno Express.

WorldSpy's Rothstein said the defunct service provider was happy to land its subscriber base with Juno.

"We believe that Juno's broad range of services, ranging from free Internet access to broadband and wireless service, will be the most appealing choice for our users," Rothstein said.

Juno contends that it follows rival ISPs America Online's 24 million members and EarthLink's 4.2 million subscribers as a result of the WorldSpy deal.

Juno staked its claim to being the third largest Intent service provider in the U.S., providing Internet access to more than 3.0 million active subscribers.

However, Juno failed to account for thriving free access provider NetZero Inc.'s 4 million subscribers it reported to serve in May.

The successful transition of WorldSpy clients to Juno could, in actuality, land the national ISP in the fourth slot, just ahead of Microsoft. Corp.'s MSN Internet, which confirmed that it provides dial-up services to 2.6 million users as of mid-June.