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Gateway gives online access
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February 24, 1999: 2:10 p.m. ET
Customers to get 1 year of free Internet service with PC purchase
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NEW YORK (CNNfn) - Gateway Inc. Wednesday said it will provide free Internet access to customers who purchase a computer priced higher than $1,000.
The move extends Gateway 's (GTW) push into the Internet access market through Gateway.net.
The offer, effective beginning Friday, will provide Gateway customers with 150 hours of Internet access per month for one year through Gateway.net. Users will pay $1.50 for each hour after 150 hours of access.
Ted Waitt, Gateway chairman and chief executive officer, has spoken publicly about developing a mixed business model that includes Internet access and personalized content along with built-to-order PCs.
Gateway's offer comes on the heels of the launch of its co-branded service with Web portal giant Yahoo! Inc. (YHOO).
"Gateway has earned the number-one position in the consumer desktop market through innovative service offerings, and through affordable, personalized technology that grows with the user," Waitt said in a statement.
"We are aggressively moving into other business segments that surround the purchase of a PC, thereby delivering the greatest value to customers, shareholders and industry partners," Waitt added.
Market share rising
Wednesday's announcement is the latest move by the North Sioux City, S.D.-based company to provide a further boost to its growing market share. Earlier this month, the company announced plans to use chips from Advanced Micro Devices Inc. (AMD) in some of its systems.
Gateway now poses a legitimate threat to Dell Computer Corp. (DELL) and Compaq Computer Corp. (CPQ) in the direct-selling arena. The company's 1998 unit shipments grew 37 percent from 1997 figures.
In 1998, the company jumped past IBM Corp. (IBM) as the No. 3 U.S. PC maker, according to market research firm International Data Corp. Gateway was ranked sixth in 1997.
Fueled by its strong unit shipment growth, Gateway recently reported fourth-quarter earnings three cents ahead of Wall Street estimates.
Gateway also purchased a 19.9-percent stake worth $21 million in NECX Office and Personal Technology Center, NECX's retail e-commerce subsidiary. Together, the companies will launch SpotShop.com, which will offer Gateway products as well as software and peripherals from other manufacturers.
Gateway shares slipped 1-7/8 to 80-5/8 in midday trade. 
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Gateway
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