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Gateway beefs up Gateway.net profile

Regardless of whether the PC maker actually acquires an Internet service provider, the company plans to forge ahead with efforts to expand its current service.

Regardless of whether PC maker Gateway actually acquires an Internet service provider, the company plans to forge ahead with efforts to expand its current service.

Gateway today said it is preparing to ramp up efforts to market its Gateway.net Internet service by mailing disks for service installation to its customers and by offering disks at its retail stores.

Instead of the mass mailings popularized by America Online (which is now the largest ISP with about 17 million members), Gateway will take a more targeted approach and will mail 600,000 disks to current customers who receive Gateway Magazine in the next two weeks, according to Brad Shaw, vice president of corporate communications for Gateway.

The mailing will be supplemented by making disks available in the company's 170 retail outlets, called Country Stores. Shaw said approximately 200,000 people a week visit the company's outlets, which are expected to number over 200 by year's end.

All told, the company expects to mail out or give away more than two million disks by the end of the year in an effort to double its current subscriber base of 400,000 users.

Internet service and Gateway's master plan
News of the expanded marketing effort comes after rumors of Gateway's interest in acquiring ISP Earthlink were reported last month. Gateway continues to decline to confirm specifically that it is in talks to acquire Earthlink.

The interest in expanding the number of users to an ongoing service, whether it be through marketing or acquisitions, remains the same: add higher margin services to the balance sheet, especially those services which offer recurring revenue sources.

Bolstering the company's other efforts to transform itself from a pure PC maker to a hybrid hardware-Internet service company is an alliance with CMGI, the Internet investing powerhouse.

Within months, Gateway could begin offering new services to its small- and medium-sized business customers through CMGI's NaviSite, such as Web hosting, ad and content management services. and the ability to support auctions on sites. CMGI's NaviNet offers wholesale, nationwide dial-up access for ISPs.