What part of FreeWwweb don’t you understand?
New York’s three year-old free ISP is tearing up the tab and going totally free, The Post has learned.
Buoyed by the recent IPO success of copycat NetZero, Steven Daum and his wife, co-founders and 70-percent owners of FreeWwweb, just closed a $15 million round of private funding and are gearing up for a spring 2000 IPO.
Until a week ago users had to purchase the FreeWwweb CD-ROM or download the software from the Internet for around $120, and thereafter receive service and support gratis. Users can now get the same service with added advertising. They still have to enter a credit card number to prove they are over 18, but no charge is made.
“NetZero now has a market cap of $2.5 billion, and they didn’t even call to say thanks for the idea,” laughed Mr. Daum. “There have been half a dozen other copycats but they all went out of business because they were underfunded. They couldn’t handle the rush of customers so service deteriorated. That’s why we are ramping up our capacity so aggressively. We also learned a lesson from AOL and the time they were oversubscribed.”
Daum is betting big on low barriers to entry. Users can now go to Freewwweb.com and switch providers easily.He expects his company, Smartworld, to complete a second round of funding in the $30 million to $50 million region before Christmas. Accompanying the 150 private investors on board is Lucent.The idea that the future is in an ad-based model has certainly taken off in Texas. A group of day traders who work in the same Houston office have kicked in $1 million between them in $50,000-$200,000 parcels. “They’re so excited they decided they had to help us get customers,” said Daum. “They’ve purchased a huge billboard on 59th Street in Houston telling people to switch to FreeWwweb.”