Spinway targets service to HP customers

The FreeTicket ISP service is Spinway's latest attempt to gain a foothold in the market by attracting mainstream consumers. Analysts have said that since the sector has been undergoing a shakeout, a free ISP's survival depends on providing services equal to its for-pay competitors.

"This is another move on Spinway's part...to try to increase their base of first-time Internet users," Gartner analyst Lydia Leong said. "If (consumers) are buying a brand-new PC and they don't already have Internet access, getting (it) on the initial desktop is an important thing. So this is an intelligent deal."

FreeTicket includes personalized Yahoo content and services through Spinway's relationship with the Web portal.

Leong said that Spinway's strategy--going after middle-America brands to find people that don't have Web access--appears to be working. Over the past year, Spinway has inked deals with online and offline companies including NBCi, Costco, Barnes & Noble, Kmart's BlueLight.com and Spiegel Catalog.

Analysts say it's an ideal time for consolidation in the ISP market, as an increasing number of dot-coms are failing and several high-profile companies are hunting for partners. For example, Juno.com has captured pieces of failed free ISPs Freewwweb and WorldSpy; it also has struck a deal with Time Warner, making it the first outside ISP to win a carrier contract with the cable company as it prepares to merge with America Online.

Leong said that although many free ISPs have been "cannibalizing the existing Internet base" and signing large numbers of customers, the companies are not necessarily gaining members who use a free service as a primary access provider.

For free ISPs to survive the shakeout, Leong said they need to not only build brand loyalty but also provide services comparable to their for-pay counterparts and "lower the cost to acquire new customers, retain customers in their target markets, and serve customers with appropriate ads and services."

Sunnyvale, Calif.-based Spinway said that it built its marketing infrastructure based on what for-pay ISPs offered.

"The reason people don't use a free ISP is because they think they're getting less for the free ISP, and that's not the case...at least with our services," said Danny Robinson, founder of Spinway.

Robinson says that Spinway's service differs from other free ISPs by not requiring members to click on ads or receive pop-up ads. ISPs frequently have faced questions about consumer tolerance for advertising. Most of the services require customers to view advertising, which often comes in the form of a bar that remains on the subscriber's screen through the duration of the Internet service.