Hunt for Subscribers: Searching for a way...

Hunt for Subscribers: Searching for a way to speed growth in a slowing market, EarthLink Network Inc. on Tuesday will take the unusual step of issuing a standing offer to buy subscribers from smaller Internet access providers that might be ready to leave the increasingly competitive business.

The move is unique partly because EarthLink is making its ambitions so public, but also because the approach is a departure from traditional avenues to growth, such as advertising and straightforward acquisitions.

Instead, the Pasadena-based company is offering to pay other Internet providers a “bounty” only for subscribers who agree to switch to EarthLink, thereby avoiding account losses that often accompany buyouts.

Sky Dayton, chairman of EarthLink, would not say how large those bounties might be, but others in the industry said asking prices typically range from $100 to $300 per subscriber.

EarthLink has grown rapidly from about 30,000 subscribers at the end of 1995 to about 325,000 today, including a gain of nearly 100,000 in the last six months. But Dayton said it is increasingly difficult to attract new subscribers now that many of the early technology adopters are already online.

“It’s not a free-for-all like it was three years ago, when you put up a shingle that said ‘Internet’ and people pounded on your door,” Dayton said.

EarthLink is targeting the thousands of small, regional Internet service providers sprinkled across the country. Dayton said many of these companies are looking for a way to get out of the dial-up business, where they compete with giants such as AT&T; Corp., to focus on areas that aren’t as capital-intensive, such as Web site design.

If growth is the only objective, the strategy could work, said Mike Kallet, senior vice president of products and services at Netcom Online Communications Inc., a San Jose-based Internet service provider with about 580,000 subscribers.

“There are 4,000 ISPs in the United States, and a lot of them are running machines out of the basement,” Kallet said. “I have to assume that even if they’re not ready to sell, their spouses are.”