SAN FRANCISCO (CNN/Money) -
Quick: Take a peek behind the browser window you're using now. How many other windows does your browser have open? More than you thought? Congratulations: You've been popped.
You can find pop-up ads all over the Web, including on this site. They're bothersome, for sure, and with their prevalence increasing, online consumers are getting more fed up. A Jupiter Media Metrix study conducted in June found that 41 percent of respondents cited pop-ups as an annoyance that would affect their decision to revisit a site. When the same study was conducted in 1999, only 23 percent responded that pop-ups would be a factor in their decision to return to a site.
Seizing on this anti-pop-up sentiment, EarthLink (ELNK: down $0.02 to $6.47, Research, Estimates) announced on Monday that it would include anti-pop-up features in the latest version of its software, Total Access 2003. The move marks the first time a major Internet service provider will include anti-pop-up software in its connection package.
At first blush, that might seem like a suicidal move: Piss off advertisers? In today's climate?! But EarthLink's not a dumb company (full disclosure: I have an EarthLink account at home), and it knows that it gets "a very, very minimal" amount of its revenue from advertising, according to a spokesperson. The move is a way to increase its customer retention (according to a recent Forrester study, EarthLink has the second-best retention rate among ISPs, behind only AOL) and fire a salvo at AOL (AOL: up $1.02 to $14.38, Research, Estimates) and Microsoft's MSN (MSFT: up $1.13 to $52.17, Research, Estimates) -- both of which employ pop-ups.
Even though EarthLink-- the third-largest ISP, after AOL and MSN -- doesn't book much revenue from ads, the advertising community won't take too kindly to the development. "If you're an advertiser that loves pop-ups, and suddenly there's a large percentage of the Internet audience that can't see those ads, you'll react negatively," says Rob Lancaster, a senior analyst with Yankee Group.
But with consumer annoyance rising, even AOL (which, like CNN/Money, is owned by AOL Time Warner) is toning down its pop-up approach. "We're committed to reducing the number of pop-ups on our service," an AOL spokesperson says. "We recently pared our use of pop-ups and replaced welcome-screen promotions with member-focused news and content."
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EarthLink's move is a smart one, with positive short- and long-term implications. In the short term, it'll reap the benefits of good press, and word will catch on among Internet users that EarthLink -- a company that has always catered to the "savvy" Internet crowd -- is the most down-with-the-people ISP. Message: If you hate pop-ups, you'll love this service.
The longer-term rewards are more intriguing. Internet Access is fast becoming a commodity; some would argue that it already is. And when products become commodified, services differentiate the market. As such, EarthLink needs something to hang its hat on, and promoting itself as the consumer-friendly service is a smart move.
To be sure, EarthLink already differs from AOL and MSN. "EarthLink walks you to the Internet's curbside, while AOL and MSN hold your hand crossing the street," says Yankee Group's Lancaster. But, looking at AOL's and MSN's enormous subscriber numbers, there's clearly a market for that hand-holding. The question now is, What are EarthLink's more immediate competitors -- the large ISPs, such as ATT WorldNet, and the high-speed cable Internet providers -- going to do to set themselves apart? Keep an eye out behind that browser window.
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