The end of free Internet service provision.

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From: Adam Rifkin (
Date: Thu Dec 28 2000 - 18:32:49 PST

Both NetZero and Juno now have market caps under $100m, and will
likely be delisted soon by Nasdaq rules. In the meantime, they're
suing each other out of existence. (In other lawsuit news, Openwave
and Geoworks settled their mutual lawsuits. Yawn.)

That's it, AOL won, no more free Internet. Darn.

On the other hand, everyone seems to be moving to broadband anyway.
DSL really doesn't seem to have come down in price much at all.

> NetZero sues Juno
> By Jim Hu
> Staff Writer, CNET
> December 27, 2000, 1:45 p.m. PT
> Free Internet service provider NetZero has filed a lawsuit against Juno
> Online Services, alleging that the rival free ISP infringed on its
> advertising-related patent.
> The lawsuit, filed Tuesday in U.S. District Court in Los Angeles,
> alleges that Juno infringed on a patent recently awarded to NetZero's
> zCast technology that allows an ISP to display an advertising pop-up
> window. Both companies offer free Internet access but require people to
> accept a persistent window that displays advertisements.
> The practice of serving persistent advertisements is the cornerstone of
> free ISPs. The services often subsist on revenues from advertising
> sales, and patents on the ad technologies can hinder rival services
> attempting to become leaders in the market.
> NetZero's lawsuit seeks an end to the alleged infringing practices by
> Juno and compensation for what it considers resulting damages.
> "We intend to judiciously protect our rights granted by this patent,"
> Mark R. Goldston, chief executive of NetZero, said in a statement.
> This is not the first time the two companies have battled in court over
> alleged infringements. In June, Juno filed a lawsuit alleging that
> NetZero and Qualcomm infringed on a patent that enables advertisements
> and other content to be displayed when a consumer is offline. This
> lawsuit has not yet been resolved.
> Juno CEO Charles Ardai denied infringement by his company's services in
> either case.
> "We do not believe we are infringing on any valid claim of any NetZero
> patent," Ardai said. "I hope to see both of these complaints to be
> resolved appropriately through legal channels."
> Given the recent downturn in online advertising dollars, skeptics
> question whether the free ISP business model, with its reliance on ad
> sales, is sustainable enough to offset connection costs.
> Because of this skepticism, free ISPs have been hammered this
> year. Juno's stock has plummeted 99 percent from its 52-week high of
> $87; it now trades below $1 after a 30 percent dip Wednesday. NetZero
> shares have nose-dived 97 percent from their year high of $40 and now
> trade below $1.
> Other free ISPs have folded or been acquired by larger entities.
> Internet holding company CMGI plans to shut down its free Net access
> provider while it seeks a buyer. In December, Kmart's online
> division,, said it would acquire the assets of free ISP


The weak are toast. Are you meek in soul, poorly capitalized, or unreasonably leveraged? Can't handle volatility? If these attributes apply to you as either an investor or a businessperson, forget about it. Get a day job. Buy treasuries. Also, every company is a startup. A great company is only great on the day it announces a great quarter. The day after its earnings announcement, it's a startup again. --

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