After amassing 5.4 million users, free e-mail provider Juno Online Services graduates today into an official online service by offering Internet access for the first time.
Currently 57.5% of Juno's customers have no other form of Internet access, according to the online service's registration polls. And it's this body of Internet newbies that Juno President Charles Ardai hopes to turn into paying customers. "What we found is that many of them after several months are ready to graduate," Mr. Ardai said, of consumers who've started with Juno's free e-mail then feel ready for an Internet access account.
THREE LEVELS OF SERVICE
And until now, America Online has been the main choice for Internet newcomers, but "With AOL, you get all or nothing," he said of AOL's chat, content and e-mail features.
Juno is offering three levels of service and pricing plans: Juno's basic free e-mail will remain intact; the new Juno Gold package, which allows users to attach files to their e-mail, will cost about $3 a month; and Juno Web, which will offer full e-mail capabilities and Internet access, will be priced competitively with other Internet service provider plans, probably about $20 a month, Mr. Ardai said.
To accompany the online service, Juno is launching a portal site, which will be co-branded with search engine Lycos. Mr. Ardai described it as a site simplified for new users. While the exact terms weren't disclosed, the agreement involves a share of ad sales and e-commerce revenue generated from the site.
NO JUNO ADS LINED UP YET
While Juno doesn't have any launch advertisers lined up for the portal, its marketing partners, such as Bank of America and LCI International long-distance service, will get first options on advertising and selling their services on the site over Lycos' marketing partners, Mr. Ardai said.
For Internet access, Juno is relying on ISPs, including Concentric, CompuServe and Sprint. Juno had 500 access numbers and will have 1,000 when Juno Web goes live.
So what's taken Juno so long to develop an Internet platform?
"We had to build a version of the Internet that was easy to use," said Mr. Ardai, noting it's been working on Web access since 1996. "We knew to get the mainstream user base on the Internet, you couldn't confuse them; it had to work smoothly."
Juno is planning to promote its new services internally to its current members and then by yearend, launch its first major ad campaign, which will be created by its agency Jordan McGrath Case & Partners, New York. Details weren't available, but a Juno spokesperson said it will probably include radio ads.
Juno's move is an important step to stop users from leaving the service, according to Kate Delhagen, senior analyst at Forrester Research. Juno is "a good service, but it's absolutely training wheels for lots of users," she said. "I think Juno has grown a lot of e-mail newbies and lost them to Web access."
Juno Web is "a good opportunity for them to gain customers," Ms. Delhagen added. "If they do well, they potentially would reach a large population that puts them on the map for a lot of other interesting things."
Copyright July 1998, Crain Communications Inc.