As previously reported by CNET News.com, Lycos today announced that it is launching a free Internet access service, while NBCi plans to launch a similar service sometime in the next two weeks, according to sources. CNET, publisher of News.com, also is an investor in NBCi, which declined to comment on the move.
Spinway.com, a free Internet service provider, will provide its services through Xoom, which is part of NBCi, sources at NBCi said. Late last year, Spinway began providing the infrastructure for BlueLight.com, the free service provided by retailer Kmart and Yahoo.
Lycos, based in Waltham, Mass., tapped CMGI-owned 1stUp.com to run the service. 1stUp.com's other portal clients include AltaVista and Excite@Home.
Lycos' and NBCi's moves are in part a simple means of keeping up with the Yahoos, as several of its closest competitors have already attracted hundreds of thousands of users to their free Net access services. But the deal also underlines these services' new role as a critical piece of portals' business models, much as free email has now become commonplace on virtually every Web site with mass-market ambitions.
Of the major Web-only portals, only Disney's Go Network is now left without some kind of access component. Yahoo joined with K-mart to create the Bluelight free ISP service last year.
The Web sites are hoping they can forge the kind of tight relationship between ISPs and their customers that has led America Online to considerable success. AOL has consistently declined to offer its own free service in face of this new competition, however, or even drop its $21.95 monthly service costs.
Lycos is currently the No. 2 Web-only portal, trailing Yahoo by a considerable margin. Microsoft and America Online also draw more users than Lycos, but each of those has a strong dial-up Net access division.
The company has spent considerable time and money over the last year on acquisitions and marketing, trying to close Yahoo's lead. That piecework strategy was implemented after a planned merger with USA Networks fell through due to a lack of shareholder support.
Lycos' and NBCi's moves also add a bit of momentum to the free ISP market, now sailing smoothly after a rocky start.
By the middle of last month, more than 3 million users had signed up for NetZero, the leading consumer free ISP brand--though analysts say only about half of those are active users of the service. CMGI's 1stUp.com has about 2 million subscribers spread across its various Web clients.
Earlier this month, the CMGI subsidiary announced a deal that will take free ISP service into the Latin American market as a joint venture with StarMedia Network and a group of venture capitalists.