Juno Enters Web Access Business

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In what is the most radical evolution of any of the slew of companies offering free e-mail addresses, Juno Online Services L.P., this week entered the Internet access fray.

The company will begin marketing the new service immediately through banners and pop-ups to try and convert its membership, which Juno pegs at 5.5 million free e-mail users, to paying Web surfers.

Charles Ardai, president of Juno, New York, said the offering -- dubbed "Juno Web" -- shouldn't be a conflict for the firm's advertisers who still will be able to reach Juno members when they check their e-mail. Banner ads eventually will be available on Juno's start page, which will be a portal (news, search services, shopping, etc.) offering co-branded with Lycos (www.lycos.com).

"Fortunately, e-mail is the most commonly used activity online," Ardai said. "Even those of our members who sign up for full Web access will probably still check their e-mail more often they go onto the Web, so our advertisers will still be able to reach them."

Ardai declined to reveal financial details of Juno's relationship with Lycos.

"The basic relationship is what you would expect between a company that controls a stream of traffic and a company that wants to get the traffic to its site," he said.

When it launched in April 1996, Juno offered its members free e-mail addresses through an advertiser-supported online service, but no Internet access beyond text only e-mail message transmission and retrieval. Ardai called Juno's move to Internet access "a natural evolution from being an access provider offering a narrow set of services to an access provider offering a broader set of access-related services to its members." As the generally online-novice Juno membership develops new needs, "we want to make sure they don't go outside the Juno universe to satisfy those needs."

Ardai would not rule out prospecting through traditional media for new Juno Web members but said that, initially, Juno will limit prospecting to existing members to avoid any dial-up problems that might result from growing Juno Web too quickly.

"We've found word of mouth to be an extremely powerful marketing tool," he said, citing company estimates that half of Juno's members were recruited by the other half. "We want word of mouth about these new enhancements to be positive."

Ardai declined to give Juno Web membership projections. The service will cost $19.95 for unlimited access.

In another development, Juno last week launched Juno Gold, an enhancement to its basic free e-mail service that for $2.95 a month allows members to send and receive graphic file attachments. Ardai declined to say whether Juno expects to get most of its long-term revenue from billing consumers for online services or from advertisers.

"That is a horse race, and I don't know which way it will go," he said.

This is not the first major change for Juno.

In November, at the request of advertisers, Juno began linking sponsors' ads to their sites and giving its members without prior service temporary Internet access limited to the advertisers' sites. Advertisers on Juno's service have three options: run-of-service advertising, advertising aimed at one of 10 broadly defined segments (such as families, business users, seniors and travel) and custom-targeted advertising.

Custom-targeted advertising is available by selecting segments of Juno's database using any combination of demographic and psychographic characteristics the company gathers through a 20-question subscriber survey.

Juno's advertisers include American Express, Delta Airlines, IBM, Intel, Bristol-Myers Squibb and Procter & Gamble. Ardai said Juno will have 10 million subscribers by the end of 1999.

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