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E-mail on the cheap
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December 5, 1996: 8:54 p.m. ET
Several services make it possible to get free electronic mail accounts
From Correspondent Fred Katayama
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NEW YORK (CNNfn) - If you're one of those who's not yet hopped on the Internet bandwagon or are just interested in getting an e-mail address, a few companies have a good deal for you.
Services that offer free e-mail are attracting thousands of new users every day and more providers are entering what they hope will be a lucrative market.
Up until now, users who were primarily interested in e-mail and not the other components of the Internet still had to pay a monthly subscription fee to a service provider.
That all changed when the Juno Online Services, the privately-held company that pioneered the concept of free e-mail, launched in April. Already, it has pulled in 870,000 members.
Just last week, USA-Net also came on the scene with its NetAddress service.
Internet analysts say while there are just two main players in the field now, the desire to get wired -- even if not fully -- compounded with the unbeatable price, will mean more companies will try to make a go of it.
"I think it's going to be a big trend and that's evidenced by a bunch of things, one of which is the emergence of companies like Juno," said Alan Braverman, Internet analyst at CS First Boston.
As is true with many other things that are "free," these e-mail offers come with a trade-off. Sponsors pay to place ads on e-mail messages sent through the services. Users also have to fork over personal information up front that e-mail providers use to help pull in advertisers.
Juno has lured advertising from such names as Bausch & Lomb and Lincoln Mercury. Those and other advertisers pay rates that are 50 percent higher than print ads. Even with those higher rates, Juno doesn't expect to turn a profit for a few years. However, Juno President Charles Ardai has big plans to expand on the company's concept. (183K WAV) or (183K AIFF)
Just recently, Freemark, another free e-mail competitor, called it quits. The company said it was not able to raise enough equity capital to keep the business running.
"The problem they have is convincing advertisers it's a viable medium. I think that's a big hurdle," said Tim Duncan, managing director of Story Street Partners.
The market is already tight and there's more competition to come. This month, a Japanese company will begin a trial to give residents in the Bay Area full Internet access for free.
Given the limited number of customers that are either interested in or capable of receiving the services, analysts say a shakeout in the free e-mail business is sure to come.
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