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Kmart: Attention ISP shoppers

The retailer, which has filed for Chapter 11, hopes United Online will buy the assets of BlueLight, its Internet service business, at an October auction.

United Online hopes to buy the assets of Kmart's Internet service business, which are being sold as the retailer struggles with bankruptcy.

The company, which owns the NetZero and Juno Internet services, acknowledged in a statement that it doesn't have a complete lock on the deal. An auction is set to take place Oct. 7 for the assets of Kmart's BlueLight service, and the winning bid must be approved by the bankruptcy court.

If United Online is the successful bidder, however, it promises to provide uninterrupted service to BlueLight's subscribers.

Kmart launched BlueLight as a spinoff in 1999. It offered free Internet access, with the idea that customers who spent time online with BlueLight would do more of their shopping through the site as well. It the free service in February 2001, and ran into other problems, staff and its CEO. In July 2001, Kmart decided to outstanding shares of the company.

Kmart filed for bankruptcy in January, closing more than 200 stores. The company the Web site in June to return focus to the parent company.

Financial details of the United Online offer were not released.