Juno Adds Full Net Access to Free Offerings

Juno Online Services Inc. Monday
expanded its free basic service package to include
full Internet access.

Until now, Juno (JWEB)
has provided only basic dial-up email services for free, requiring users
interested in full Internet access to subscribe to a billable premium service.

In addition to their free service expansion, Juno announced plans to launch
an aggressive advertising program early next year in order to further
enhance its base of Web users.

Charles Ardai, Juno president and chief executive officer, said Juno
services would rival America Online Inc.

“With the addition of Web access to our free package of basic services and
the planned acceleration of our highly successful subscriber acquisition
program,” Ardai said, “we hope to be providing Web access to more
individuals than any ISP or online service other than America Online before
too much longer.”

More than 8 million Juno accounts have been created since the launch of
Juno’s basic service in 1996. By comparison, free-ISP NetZero (NZRO)
has reported its subscriber base runs just over 1 million active members.

Prior to Monday’s announcement, Juno’s services ranged from free dial-up
Internet e-mail to full, competitively priced access to the Web.

Since the introduction of its billable services in July 1998, Juno has
quickly built a base of more than 500,000 subscribers. Most of
these subscribers initially signed up for Juno’s free basic service, then
migrated to a billable service when they developed a need for higher levels
of Internet functionality.

In addition to the service expansion, Juno plans to continue both free and
billable service offerings, and will continue to migrate members from the
free to paid services as their Internet-related needs grow over time.

Ardai said Juno’s customer acquisition plan is well received in the
marketplace and that their multi-level service strategy will continue.

“This expansion represents a natural evolution of Juno’s multi-tiered
service strategy,” Ardai said. “As the Internet matures and users become
more sophisticated, each of our services needs to grow as well.”

Juno offers levels of Internet service, free basic service for e-mail,
low-price nationwide dial-up service and broadband access that utilizes
Digital Subscriber Line technology where available.

Juno will make Web access available to its e-mail-only members immediately.
Users must upgrade their software in order to take advantage of the free
dial-up services.

Ardai said Juno plans to deploy several cost savings strategies through the
use of technologies designed to achieve efficient hardware utilization.

“We believe that Juno’s cost-effective network architecture and offline
email technology should provide us with significant cost advantages
relative to competing free services,” Ardai said. “Juno invented the free
Internet service. No company knows more about how to make a free model work
than Juno. K-Mart is much better at
running retail stores than we will ever be, but they don’t know how to
operate a free ISP.”

Ardai added that a few years ago, operating a free ISP was cost prohibitive, but the price of telecom time has dropped and Juno’s advertising revenues are at an all-time high, making for enhanced profit opportunities.

“Juno has a well balanced revenue mix consisting of ad dollars and
subscriber fees,” Ardai said. “We posted a strong third quarter and
anticipate that we will break even in our fourth quarter report, scheduled
for release in January. At our current pace, we’re going to break even

three quarters earlier than projected.”

Juno partnered with Covad
(COVD) to extend their premium DSL service offering, to be rolled out next year.
Ardai said all Juno did is rachet up their free service offering, to bring
news online customer’s to the company’s subscriber base.

“Up-selling has always been our marketing strategy,” Ardai said. “We let customers determine the level of service they need and then determine what
they are willing to pay for advanced services. It’s like the difference between economy and first class seats when you fly, the plan gets you to the same destination. How much you pay determines how comfortable you are getting there.”

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