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Free Net services gain ground on leaders

Freei.Net, a competitor to free Internet services like NetZero and AltaVista's free Net access, successfully crosses the 1 million subscriber mark.

Free Internet service providers are catching up with the industry's leaders.

Freei.Net, a competitor to services like NetZero and AltaVista's free Net access, said today that it crossed the mark for 1 million subscribers. Along with the other leading free services, this puts it squarely in the top 10 ISPs nationwide, creeping up on industry stalwarts like Prodigy and MindSpring.

The quick growth of these services in the last year has sent shockwaves throughout the ISP industry, prompting companies such as CompuServe and AT&T to slash their service prices. Other firms have responded in turn with discounted PC-Internet access bundles.

NetZero now claims 2 million subscribers, effectively putting it in the No. 2 position behind America Online. By comparison, AT&T WorldNet has about 1.8 million users and EarthLink Network has approximately 1.6 million.

Determining exact subscriber figures for free Net services is still a tricky endeavor, however.

Unlike a traditional ISP where users generally pay monthly bills, a free ISP subscriber might sign up once and never return. Regardless, that person stays on the firm's subscriber list. NetZero says about 53 percent of its members use the service each month.

Freei.Net now gets about 15,000 new member subscriptions a day, aided by a network television campaign that ran last week, according to spokeswoman Bridget Murtagh. A recent round of financing has helped the company establish a name nationwide and begin advertising on television.

Most free Net service firms have yet to make a profit, but many are becoming more creative in finding ways to reach subscribers with tightly targeted advertisements, which boosts revenue potential. However, many other established ISPs are also bleeding red ink as they boost spending on marketing and increased customer service.