Another Free ISP Tops 4 Million Subscriber Mark

We examine how subscriber numbers work for a free ISP, and how advertising technology is the most important element of any successful free ISP.

by Patricia Fusco
of internetnews.com
[August 8, 2000]

Co-branding free access provider Spinway, Inc. joined the ranks of the 4 million member club Monday.

In just seven months Spinway landed deals to provide free Internet services to high-profile advertisers including Kmart's BlueLight.com, Ace Hardware's OurHouse.com, and Spiegel Catalog, Inc., among others.

Spinway added, on average, over 25,000 new consumers to its advertising network each day.

Better advertising
Spinway's free service is built on revenues from advertisers seeking to develop online advertising resources. Its ad technology transports full motion video, rather than streaming graphics, at modem speeds as low as 14.4 kilobits per second. Spinway's ads are sent directly to the consumer's desktop during a user's down time, when they are reading Web content or e-mail.

Steve Seabolt, Spinway chairman and chief executive officer, said, "Our extensive advertising network and proprietary technology enables advertisers to reach millions of targeted consumers with entertaining, rich media TV-type commercials with no impact on system performance or sacrifice of privacy."

To protect the privacy of its users, Spinway only provides advertisers information in aggregate form, so personal information is never sold or revealed to sponsors.

Daryl Schoolar, Cahners In-Stat Group analyst for ISP strategies said Spinway does not sacrifice consumer privacy or access rates to deliver its free Internet services.

"Spinway offers its consumers top-of-the-line free ISP access with 24-hour customer service and delivery of advertising in a non-obtrusive manner," Schoolar said.

Schoolar added that he considered Spinway to be one of the dominant players in the free ISP market.

Rival free service provider Net Zero, Inc. topped the 4 million subscriber mark late in June.

The numbers
Analysts estimate that 40 to 50 percent of its subscribers actually connect to the Internet each month. Charles Katz, 1stUp.com chief executive said that its 3.5 million users trend with the industry average indicating that less than half of a free ISP's subscribers actually log-on each month.

Spinway counts active subscribers as users that are online through its network for 15-minutes or more each month. A spokesperson confirmed that the last time Spinway reported active data it posted about 42 percent actual subscriber usage.

Plugging in Spinway's 4 million subscriber milestone with past user activity, it's estimated that Spinway currently provides free Internet access to about 1.7 million users each month.

The newbies
Additionally, Spinway indicated that Blulight.com continues to be very popular with first-time Internet users. The advertising partner said that almost 40 percent of its subscribers are fist-time users.

—End