Interestingly--and this was just announced--the free model must be important and relevant enough for CMGI to buy 1stUp, the FreeAV ISP.
So let's for now forget about the college students. The mere fact NZRO is targeting them is comforting enough for me. But, ultimately, they'll be students, bakers, candlestick makers, clergy and even conservative Republicans who'll each be saving pennies, becoming a part of NZRO's multi-million user subscriber base. I'll predict by the end of December, NZRO will catapult into the top five for ISP subscribers.
Business model? Well, I'll just defer to the question: Why did CMGI buy 1stUp? Any idea why?
From October of '98 to February 10, 1999, NZRO attracted 300,000 subscribers; and from February 10, 1999 to July, it attracted 900,000 subscribers; from June to August it attracted 500,000 subscribers for a total of 1.7 million subscribers going into its IPO--and all of this on the basis of word of mouth. I predict all-time Internet subscriber records will be broken now that NZRO has the ability from its IPO to launch a national advertising budget to attract new subscribers. There's already testimony on RagingBull of folks hearing NetZero ads in the Dallas/Ft. Worth area.
But here's something on NZRO's backing.
Taken from www.Internet.com
NetZero Receives VC Endorsement
February 10, 1999
By Patricia Fusco
InternetNews.com Assistant Editor
ISP News Archives
Free Internet provider NetZero Inc. Wednesday announced that it has
secured multimillion-dollar financing from three California-based venture capital firms.
NetZero did not specify the exact amount of the investment.
The company said the investment is a strong endorsement of its business model. NetZero has also attracted more than 40 national advertisers in just three months.
The second round financing for the advertising-driven free Internet access provider is lead by Draper Fisher Jurvetson. Additional money has been secured from Foundation Capital and Idealab Capital Partners.
Following a business model similar to network television and radio,
NetZero offers subscribers free Internet dial-up and e-mail services, underwritten by on-screen advertising revenues. Since its launch in October 1998, more than 300,000 subscribers have signed-up for NetZero access, making it one of the fastest growing Internet providers ever.
NetZero is now delivering more than 300 million page views per month,
placing it among the top 16 sites by impressions worldwide, according to figures from NetRatings.
Draper Fisher Jurvetson spearheaded the financing round. Draper has
helped finance more than 150 technology and new media companies, including eToys, GoTo and HotMail. Draper associate Jennifer Fonstad will gain a seat on the NetZero board of directors, effective immediately.
"We are strong believers that access to the Web must be free," Fonstad
said. "NetZero has developed a powerful merchandising model that makes this possible and profitable. They also have the best team in the business."
Foundation Capital is an experienced provider of financing for emerging companies. Foundation Capital general partner Paul Koontz will join Fonstad as a new member of the NetZero board.
"Internet access will be free for everyone -- there's no question about it," Koontz said. "What sets NetZero apart is its execution of a nationwide rollout of high-quality, free Internet access. A business like this must operate on a national scale, and NetZero is the first to demonstrate its ability to do that."
"This is a ringing endorsement of our model and our strategy," said
Ronald T. Burr, NetZero's chief executive officer.
"We've been able to address the needs of our advertisers by providing
unprecedented targeting and profiling capabilities -- delivering ads our subscribers want to see," Burr said. "We aim to be a unique gateway to the Internet and the new round of funding will enable us to increase our development efforts and deliver additional value-added features to our service." |
