Excite@Home Joins Web Giveaway
Joining a wholesale rush to offer computer users free Internet access, Excite@Home announced it will give away Web service to customers willing to put up with a permanent advertising banner on their Web browser.
The move, which will complement Excite@Home’s main business--high-speed broadband Web access it sells to cable TV subscribers for about $40 a month--is designed in part to steer more users to the company’s Excite portal and search engine.
That in turn will benefit @Home, which uses Excite’s database of 20 million registered users as a pool of potential subscribers.
“That was one rationale for @Home acquiring Excite” early last year, said Michael Harris, an analyst for Kinetic Strategies, a Phoenix market research firm.
But perhaps even more important, Excite’s move also represents a competitive blow at other low-speed, or “narrowband,” dial-up Internet service providers, particularly America Online and others that offer users specialized information and other content, as does Excite.
“We believe that pricing pressure will continue in the narrowband business,” said George Bell, Excite@Home’s president. “By the end of the first quarter of this year, virtually all the major portals will have launched free service.”
Bell said Excite has contracted with 1stUp.com, a unit of CMGI, to provide technical support for its free Web customers for a fixed monthly fee per customer, and that the company expects to sign up as many as 20,000 users a week in the early stages. Nevertheless, Excite expects the service to eventually be profitable, with revenue coming from advertising that will remain on users’ computer screens as long as they remain online.
Computer users may soon become accustomed to receiving such service for free. Meanwhile, the cable and telephone industries are now in a pitched battle with each other to sign up customers for high-speed or broadband services, for which they can still charge hefty monthly fees. @Home now claims more than 1 million subscribers.
Free Web access will undermine “a very central element of [AOL’s] business model,” Bell said--the $21.95 monthly subscription fee on which it has relied for profitability. Bell observed that AOL has few high-speed access alternatives to offer subscribers, unlike Excite, which offers @Home service to millions of users whose cable TV companies provide the service.
Excite’s free service will also compete with the WorldNet Internet service of AT&T;, which controls Excite@Home. Company sources said AT&T; approved the move at the board level.
The free service, which was launched Thursday under the name FreeWorld, mirrors several being offered by such portals as Yahoo and AltaVista, as well as companies such as Westlake Village-based NetZero. With those services, the user’s screen displays an ad window or strip that can’t be closed as long as the user remains online.
