Free Internet providers announce plans to merge


June 10, 2001


In what may be the final shakeout for the free Internet movement, NetZero and Juno Online Services announced recently they would merge to become the nation's second largest Internet provider.

The merged company would be push MSN -- now the second-largest Internet provider -- into third place behind America Online.

The merger, set to take place late this year, is worth an estimated $70.7 million.

The new company will abandon both companies' names for United Online Inc. The merger will give the company more than 7 million active subscribers.

AOL is far ahead of other Internet providers, with an estimated 29 million subscribers. Microsoft has about 5 million, Earthlink has 4.8 million, and AT&T Worldnet has about 1.3 million subscribers.

Among broadband providers, Excite@Home has about 3.2 million subscribers.

Both Juno and NetZero have struggled over the past year as online advertising revenues had dropped dramatically.

Both services were advertising-supported, though both have been moving to a fee-based service in recent months with varying success.

Establishing monthly charges for Internet access put both NetZero and Juno on the same playing field as locally owned Internet providers across the country.

These "mom and pop" companies are difficult to beat for customer service and value, not to mention the fact that using their services helps support a business in the subscriber's community.

Juno began in 1995 as an ad-supported free e-mail service. The company later added free Internet access, which included the World Wide Web.

MAIL CALL. There's no disputing the U.S. Postal Service has been is being hurt by the explosive growth and use of e-mail, fax machines and the Internet to pay bills, conduct business and communicate in general.

The Government Accounting Office projects first-class mail to continue to grow by 1.8 percent per year through next year, according to estimates. After 2002, the GAO predicts the volume of first-class mail will decline at 2.5 percent per year from 2003 through 2008.

While the Postal Service may have the "snail mail" nickname, it takes high-tech resources to coordinate the delivery of more than 700 million pieces of mail between 136 million U.S. locations each day, according to a postal service executive.

Mail delivery isn't going away, but with the service's current financial crisis, the changes we may see in the future may be more than just increases in postage. One such proposal would eliminate Saturday delivery of mail.

While business use of e-mail has increased, some industry watchers believe online bill paying could significantly impact the postal service. Paying bills online is still fairly new and gaining acceptance; there are still untapped ways to make paying for goods and services online a much more commonplace event in people's lives.

Postal mail still has the benefit of security. Users can count on their postal mail being secure and private.

This isn't the case with e-mail. Most businesses have a policy that allows them total access to employees' e-mail, regardless of the content.

As I heard one manager say about e-mail sent from work, "What you think is private really isn't."

No computer viruses have ever been delivered by postal mail (unless it was on a computer disk). You don't need plug-ins or viewing programs to read postal mail. And even if you misspell the name of the recipient, his street and town, chances are good your letter or package will still arrive.

Misspell an e-mail address and your message is bounced back to you (or ends up in someone's In box as an unwanted message).

The postal service has been working to embrace e-commerce with a variety of initiatives. It's too early to tell how well they'll perform.

Postal mail survived other threats -- namely, the telegraph, telephone and television. The world of communications is changing again, but I expect postal mail will always have a role in business and personal communications.

BIG FOUR. If you're a fan of history, you probably predicted it.

After the rapid growth cycle of the Internet, the big fish in the pond have eaten many of the little fish, leaving four companies to dominate the Internet.

AOL Time Warner, Microsoft, Yahoo and Napster now control half of all time spent online by users in the U.S., a survey by research firm Jupiter Media Metrix said.

AOL Time Warner now controls 32 percent of user minutes. Most of this time is spent using e-mail and instant messaging, the survey said.

Microsoft's MSN Web portal, its Hotmail e-mail site, and online magazine Slate get 7.5 percent of users time online.

Yahoo followed Microsoft with 7.2 percent. The company's personal finance service and instant messaging are its top draws, the survey said.

Napster was included in the top four, though its users have dropped significantly since it has begun to filter copyrighted material from its site.

AMAZON EXPANSION. Online book giant is expanding and diversifying its product lineup. will expand its book business to include sales to institutional customers later this year.

On the consumer side of the business, Amazon will also start selling personal computers.

Analysts say online book sales have been flat for months, and Amazon's move into new markets is a move to reinvigorate the company's sales numbers.

The company's "Amazon Used" program is being credited for adding 775,000 customers. It offers used copies of books alongside the new ones.

In sales last month, one out of every 12 books sold was a used book.

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