Don't look now, but another survivor of the dot-com crash has turned profitable. United Online
United Online owns the NetZero and Juno Online services, both of which still offer free dialup access. Users who take advantage of these no-cost plans must contend with a prominent advertising bar and are limited to surfing only 10 hours per month. This works in the company's favor, however, because many who try the free service will eventually upgrade to unlimited, advertising-free access for $9.95 per month. The company collects either way, with 12% of revenue coming from advertising and the rest from subscription fees.
NetZero and Juno fees are a bargain price compared to the $23.90 AOL users must pay, or the $21.95 charged by EarthLink and Microsoft's MSN. In fact, United Online interested many new subscribers with a national ad campaign that began: "What do you call someone who pays double for Internet access? An AOL user!"
Management says that for the first time ever, more than half of new paid subscribers were from outside the company, as opposed to those upgrading from the free services. And at a time when the major ISPs are struggling to even maintain market share, United Online's paying customers increased 48% year-over-year to 1.85 million.
The stock price has reflected the company's success, increasing almost 500% over the past 12 months.
