NET ZERO CUTS 26% OF STAFF

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(Aug. 2, 2001) -- ISP NetZero on Wednesday announced it was cutting 26% of its employees and placing further user limits on its free Internet access service. The company said 66 staff members would lose their jobs in the latest round of belt-tightening.

A new pricing plan offers households 10 -- rather than the previous 40 -- hours of free access service per month. The company is also eliminating the free service from areas where telecommunications costs make ad-supported only Internet access too expensive. The changes are slated to go into effect on Oct. 1.

The price for NetZero online access in future will be $9.95 per month, which the company already offers in its NetZero Platinum service, which eliminates a banner advertising window that has been a part of the free service. The new plan will affect approximately 38% of NetZero's 3.4 million subscriber base.

NetZero is in negotiations to merge with Juno Online Services, which had also attempted a completely ad-supported ISP. The two companies plan to unite their services into a new company called United Online. -- Catharine P. Taylor

Copyright August 2001, Crain Communications Inc.

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