Thursday, November 16, 2006

NetZero launches broadband!

Hurray! They join the party at last!

So, they go beyond dial-up and have launched a new Netzero DSL broadband service at $14.95 a month introductory offer. Yes, this was always on the cards, and this is yet another sign that the dial-up business is dying on the vine. For the past several quarters, chief competitors AOL and Earthlink have been reporting declining revenues in subscribers as more people ditch dial-up for faster broadband access.

United Online (the parent company of NetZero, Juno, Classmates.com, Bluelight Internet, and a few other web-based companies), has also reported 15% decline in the revenues from its Internet access business for the third quarter this year, as compared to last year. Earthlink, for example, saw its dial-up subscriptions decline by 81,000 third quarter, but gained 47,000 new subscribers for its broadband business. So, clearly, that's the way to go!

Hmm...It seems that United Online has entered into agreements with Verizon Communications to lease the networking infrastructure. That makes sense - if the capital investment is high, and there's someone doing it better - Buy, Don't Make! However, I feel, since Verizon also offers broadband service on its own, they would have a higher bargaining power in this context, and could charge United whatever they want for leasing the whole infrastructure, just to make sure United continues to charge higher than Verizon. Not sure, how they're working out the contract...

Well, lot's of interesting stuff happening out there, wish I continued to work for NetZero! It was a great company!

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2 Comments:

Blogger Sasidhar said...

This is primarily to reduce churn. Basically to hold and keep the existing customers.. also to make wall street happy. :)

12:04 PM  
Blogger Padmanaban Kumar (paddu) said...

If the NetZero guy says so, I agree. :)

3:31 PM  

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