NetZero Lands Alliance with NFO Worldwide

NetZero’s fledgling market research business got a jump-start Wednesday, when the ad-supported ISP announced a deal with consumer research giant NFO Worldwide.

Through terms of the deal, NetZero will provide NFO, as well as its automatic, research-on-demand site InsightExpress, with consumer research, based on analysis of its users’ anonymous clickstream and demographic data. NetZero will also survey its users for NFO, which is an Interpublic Group company.

The agreement also calls for NFO to offer Westlake Village, Calif.-based NetZero’s ad-supported Internet access to members of its existing household panels, boosting NetZero’s reach and enabling NFO to combine online and offline research for users who use the service.

“We share the NFO/InsightExpress commitment to providing companies with valuable, relevant information about the attitudes and behaviors of targeted online consumers,” said NetZero chairman and chief executive officer Mark Goldston.

The agreement also calls for NetZero’s research unit, CyberTarget, and Greenwich, CT-based NFO to develop co-branded research applications based upon NetZero members’ anonymous clickstream data, focusing on various industry vertical markets.

“Our goal is to give our clients a more in-depth understanding of their customers, and those of their competitors, and help them define marketing strategies that will maximize their competitive advantage,” said NFO president and chief operating officer Randy Smith.

“In partnering with NetZero’s CyberTarget unit, we can provide our clients with some of the most sophisticated targeting capabilities in the industry. This strategic relationship will allow our clients to define marketing strategies by pinpointing precisely where members of their target audiences are spending their time online and relating this to attitudes and offline behavior.”

The deal is exceptionally good news for NetZero, which has been attempting to turn its user tracking technology and demographic data into a stand-alone research package — hopefully weaning itself somewhat off of ad revenue as its chief source of revenue.

That effort comes in a time when most free ISPs are having a rough time of it Free ISP Spinway went under last week, to be snapped up by a former client, Kmart’s online unit BlueLight.com. And a NetZero competitor, ad-supported FreeInternet, recently folded as well; NetZero purchased the company’s remaining assets and user base.

Internet holding company CMGI said it would be closing or selling its free ISP, 1stUp in an effort to cut operating costs. 1stUp provided private-label free access for a number of clients, including CMGI-owned search engine AltaVista, which said Wednesday that it would be forced to cease providing free access to users.

Juno, which provides free Internet access but also runs one of the largest subscription ISP services, said last month it would be taking measures to promote its pay-for-access services by increasing the number of ads seen by free users, and by making it harder for them to maintain a constant Net connection.

Questions have lingered about the size and validity of NetZero’s research panel since the company unveiled its CyberTarget unit in September. Some experts argue that free ISP users skew toward a lower-income demographic, and thus don’t accurately represent the average Internet user in sampling. NetZero also counts 5.7 million users, although it is not known at press time how many those are “active users” — that is, how many use the service more than once per month. Prior to its acquisition of FreeInternet, NetZero said it had about five million users, about two million of whom were active users.

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