Addlebrain.com
July 20, 2000

Several weeks after filing for Chapter 11 Bankruptcy protecton, free ISP Freewwweb has shut down. Freewwweb has been in business since 1996.

Freewwweb's home page now refers current and potential users to Juno, a rival free Internet service. Juno has agreed to pay Freewwweb up to $40 in cash and stock for each user who signs up for Juno's service.

Like rival service Worldspy, which shut down last month, Freewwweb offered users free Internet service without showing a constant ad on the user's screen. Freewwweb expected to recoup its costs by directing users to a co-branded version of the Snap Internet portal, from which Freewwweb would earn advertising revenues.

This business model proved unworkable, however, and in court filings, Freewwweb disclosed that while it racked up millions of dollars in monthly costs to provide the service, it was only earning a fraction of that amount from its Snap partnership.

Freewwweb failing

There were some indications early on that Freewwweb was having some difficulty maintaining its service.

In March, Freewwweb was preparing for an Initial Public Offering of its stock, and sent an e-mail to all of its subscribers to generate interest in the IPO. The e-mail asked users to submit a non-binding offer to invest money in the company, in return for stock.

In May, Freewwweb again e-mailed its subscribers, offering half-price advertising on the company's co-branded version of the Snap portal. Advertising revenues had not been sufficient to cover the costs of operating a national ISP, according to later court filings. In the bankruptcy documents, it was disclosed that Worldcom was billing Freewwweb $1.2 Million per week to operate Freewwweb's network. Freewwweb, however, was earning only $135,000 per month from its partnership with Snap.

Other items pointed to the difficulties Freewwweb was having keeping its operation afloat. Users in many parts of Freewwweb's service territory indicated that the service was extremely slow during the most popular periods of Internet use. This type of sluggish response may have indicated that Freewwweb's network was unable to handle the large number of users that had signed up for the service.

Juno picks up orphaned subscribers

In a deal similar in structure to Juno's recent purchase of failed free ISP Worldspy's subscribers, Freewwweb was offered cash and stock for each Freewwweb subscriber who signed up for the Juno service.

Current Freewwweb subscribers were greeted with a message from Freewwweb CEO Steven Daum when they logged on to the service. The message thanked subscribers for their support, and included a link to download Juno's software. The agreement with Juno allows users to continue to receive e-mail addressed to the user's Freewwweb account, but all messages must now be read using the Juno software. According to their website, Juno will no longer allow Freewwweb users to access their mail using POP software, such as Microsoft Outlook Express or Netscape Messenger.

Juno has offered to pay Freewwweb $40 in cash and stock for each Freewwweb user who signs up for Juno's service. "This deal has the potential to significantly expand Juno's subscriber base, even if fewer than half of Freewwweb's subscribers switch to using Juno," said Charles Ardai, Juno's president and CEO. "We are very pleased to have reached an arrangement with Freewwweb that will enable us to bring their subscribers into the Juno family."

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