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2nd Free Web Service Dissolves

July 20, 2000

NEW YORK (AP) _ For the second time this month, Juno Online has gobbled up a competing free Internet access provider.

Freewwweb LLC ceased operations Wednesday night and, with court approval, began referring its subscribers to Juno’s free Internet access service, Juno said. Freewwweb filed for bankruptcy last month.

``The deal is very similar to the one we struck with WorldSpy,″ said Juno spokesman Gary Baker. Freewwweb claimed more than 700,000 subscribers, according to Juno, which put Worldspy.com’s active subscriber total at 260,000 when it folded in early July.

The two companies failed primarily for lack of advertising revenues _ WorldSpy didn’t advertise at all while Freewwweb didn’t do it enough, Juno’s president, Charles Ardai, told The Associated Press.

Free Internet access no longer offers great possibilities.

``The window of opportunity for new players to jump into this market or for players to jump in from scratch and launch free services is really closed,″ said Zia Daniell Wigder, an analyst at Jupiter Communications.

Jupiter ranks Juno fifth among U.S. Internet service providers with 1.7 million active subscribers at the end of the first quarter. Comparatively, America Online Inc. had 20.3 million paid subscribers nationwide.

Juno advertises heavily on its free Internet access service but its hybrid business model also offers high-speed Internet access at a cost.

Ardai said Juno was paying primarily in common stock, with a smaller portion in cash, for every Freewwweb subscriber who signs up with Juno.

While not offering specifics, Ardai did say that the bulk of the payments to Freewweb would be made only after a transferred subscriber had been active for three months.

Freewwweb is owned by New York-based Smart World Technologies LLC, which did not return telephone calls on Thursday.

Juno said Freewwweb subscribers who convert to Juno would be able to continue receiving e-mail sent to their Freewwweb address and continue to enjoy free Web access. As well, those subscribers will have the option of upgrading to one of Juno’s billable premium services.

Juno had $24 million in revenue in the first quarter of 2000, said Ardai, about 70 percent of it from subscription fees. Its stock closed at $9.313 on the Nasdaq Stock Market Thursday, down 9.3 cents.

``Our goal is to get as many of our subscribers to pay eventually,″ said Ardai. The company, founded in 1996, has yet to show a profit.


On the Net: Juno Online: http://www.juno.com

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