NetZero Offers Free Internet Access

Targeted advertising funds e-mail service that's also a service provider.

Peggy Watt, PC World

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Its formula is yet to be proven, but NetZero appears to be off to a roaring start. The Southern California startup claims that more than 200,000 people have signed up since its launch in mid-October, and the company expects to hit a million users by the end of the year, according to Chief Executive Officer Ronald Burr.

Footing the bill for the free e-mail, of course, is advertising. NetZero's lure for advertisers is that all subscribers complete a personal information form, noting demographic details such as marital status, age, income, geographic location, profession, interests, and hobbies. This targeting makes NetZero more attractive to advertisers than the broadcast advertising available on most other Web sites, Burr says.

Burr likens NetZero's model to television and radio, which can provide demographics about their audiences. But NetZero gets much more specific. The company can tell advertisers how often users log on (an average of three times daily, he says). The ads are tied to user categories, so childless subscribers won't see ads for kids' wares, for example; and advertisers can target particular regions of the U.S.

NetZero's big differentiation from Bigfoot, HotMail, Yahoo, and numerous other competitors is that subscribers don't need a separate Internet service provider. And while a few other services--most now defunct or faltering--have tried that tactic, most of them charged a sign-up fee, Burr notes.

Also, NetZero is available nationwide; other similar ventures generally were regional. NetZero provides more than 600 dial-up locations in the U.S. Subscribers can run any browser. NetZero's ads float in separate boxes on the screen rather than appearing as banners on the Web page.

The ISP role is a mixed blessing, however. You can forward your NetZero e-mail to any e-mail account, and you can log on through any ISP to check your e-mail. But you must log on to a NetZero POP in order to send NetZero e-mail. This discourages spamming from the free accounts, Burr says--but it also makes the e-mail less accessible.

Advertisers include Nisson and Bell South, so the young venture has caught some national attention. NetZero is a funded product of IdeaLab, a business incubator launched by Bill Gross, who founded Knowledge Adventure.

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