Mark Goldston, CEO, United Online

Mark GoldstonThere are a lot of
options out there for Voice over IP , all with
different price plans and features. But they all have one thing in common:
they require a broadband connection.

All except one that is. United Online, which operates the NetZero and Juno brand
ISPs, as well as, recently announced that it will launch a VoIP
product that works over dial-up lines.

The offering uses technology from CrystalVoice and Ubiquity Software to make
sure the voice quality is crisp. But even so, will dial-up customers, who
aren’t generally viewed as early adopters, be sold on the service?

Mark Goldston, United Online’s chairman, president and CEO, thinks so.
Goldston recently talked with about the ISP industry,
the new VoIP offering and other growth strategies.

Q: ISPs are pushing broadband and prices are coming down. Why is dial-up
still a viable offering?

We’ve managed to raise the art of dial-up. Our goal all along has been to
make sure that a huge amount of Americans, who
don’t get broadband [because they live in an area where DSL or cable isn’t
available], or see the need for it, get what they

In June, we launched the fastest product in our history, NetZero 3G …
The vast majority of Internet users — most of what they do is check e-mail and go to the same 10 Web sites: eBay, Amazon.

Q: No ISP has launched VoIP for dial-up. Why did you decide to pursue

We thought about what the next big frontier would be that we could buy into
or build. Nine months ago, we started investigating [VoIP] in earnest. If
you have a major dial-up ISP infrastructure, you’re 70 to 75 percent there.
It’s that similar, down-to-the-backbone network.

I thought, “Now there is something we can do.” We have a brand that stands
for high quality and low prices, and we could have a high-quality, low-priced
telephony product that uses our own proprietary software and a couple of
outside software resources.

Q: What are your plans to market this and sell it? Will it be primarily
viral, or will you make a big advertising splash?

We soft-launched it and it’ll probably be ready in late December or January.
We’ll do a separate marketing campaign and a major campaign within, which has 45 million members.

We’re going at this thing more
along the line of Skype. Virtually everyone has adopted a box approach …
to throw out the home telecom company. As a marketer I think it’s a stretch.

Q: What about the ability to provide e911 service and allow for law
enforcement wire-tapping?

Because it’s computer-to-computer it doesn’t. But ultimately everyone is
going to be there. The category is evolving, and people will have to come up
with more robust feature sets as customers decide whether it’s a home-phone

Q: Besides VoIP, what other areas is United Online looking at to boost

We’re always looking at things in content and social networking arenas to
find a way to bulk up. We’d like to use Classmates as a platform. We love this
law of large numbers, having access to 40 or 50 million people when we go to
offer a new product. If 2 percent decided to go for [the new product]
you have 1 million people. Yahoo has done a great job with this.

Q: EarthLink has formed a
joint venture with SK Telecom to add wireless to its mix. Does United Online
have any similar plans?

“We think the wireless category is a great space. Over time, we would like
to be looking to see if there is play there for us.

We believe that the NetZero and Juno brand names could help us. But at this point, it’s not something we’d be looking to do, to walk into a category where there is so much merger and acquisition activity. [To enter that market] you better have a unique play.

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