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Excite@Home poised to offer free dial-up service

The Net-over-cable firm is expected to offer its own branded free dial-up Internet service in hopes of luring a larger customer base.

Excite@Home is expected to offer its own branded free dial-up Internet service in hopes of luring a larger customer base, according to sources familiar with the discussions.

The company plans to offer the service using technology provided by CMGI-owned 1stUp.com, the same free access provider that AltaVista cut a deal with in July. Excite@Home already is the largest provider of high-speed Net access over cable networks.

The decision to enter the free Internet service provider (ISP) space comes at a time when Excite@Home Web content competitors are beginning to offer their own free ISP services.

Yahoo is expected to announce a deal tomorrow to offer a co-branded free ISP service with Kmart as part of the launch of the retailer's e-commerce site, according to sources. Spinway, the free ISP with funding from Masayoshi Son's Softbank and Seagate founder Al Shugart, will power the service, sources said.

The trend underscores the lengths to which various Web properties will go to gain access to a wider audience.

Sources familiar with the discussions said the deal is set, but would not give a time frame for when the service will launch. It is thought to be imminent, sources said.

A 1stUp.com representative declined to comment. Excite@Home also declined to comment.

Excite@Home, the nation's largest high-speed Internet access provider, recently topped 1 million subscribers. But with tens of millions of Internet users using dial-up technology to access the Web, the company and its advisers have long considered a separate dial-up offering.

With its own dial-up service, Excite@Home can maintain a relationship with Net users who can't subscribe to its high-speed service, which runs over cable networks. Because cable television systems require extensive technological upgrades before they can deliver high-speed Net access, many neighborhoods and even cities can't subscribe to the @Home service.

But an alliance with 1stUp.com could be viewed as a defection from AT&T. Ma Bell, the largest shareholder in Excite@Home, runs its own dial-up Net access service called AT&T WorldNet. Published reports earlier this year indicated AT&T might be willing to sell its WorldNet unit to Excite@Home.

One of the nation's largest ISPs, WorldNet could ink an alliance with Excite@Home, but does not offer free Net service.

Analysts said the decision was an obvious one. "It's a no-brainer thing to do," said Hilary Mine, an industry analyst at Probe Research. "[Excite@Home] is trying to get volume on their network to help their advertising models and e-commerce models."

"The reality of Internet access is that even after going five years out, the dominant mode of Net access is going to be dial-up," she said.

Free Net access firms are highly dependent on advertising revenue, analysts say. Pairing with Excite@Home and its ad service MatchLogic could help 1stUp.com offer advertisers specific information about its rapidly growing user base.

The alliance also could put further pressure on subscription-based ISPs such as America Online and MSN Internet Access, which have seen their free ISP brethren make inroads in recent months.

Free Internet access has made relatively obscure ISPs 1stUp.com and NetZero two of the fastest growing ISPs in the industry.

News.com's Corey Grice contributed to this report.