AltaVista Signs Up 800,000 Free Users

Destination site AltaVista, which has Internet holding company CMGI (Nasdaq: CMGI) as its majority shareholder, announced today that it has signed up 800,000 users for free Internet access in the first three months of the service.

This enrollment makes AltaVista equivalent to the seventh-largest Internet service provider in the United States.

“As Internet access costs continue to decrease and user demand for free access grows, we will remain in this strong leadership position,” said Ross Levinsohn, vice president and general manager for AltaVista New Media.

AltaVista also announced today that its service is now available for users of Windows NT, in addition to the current available service for users of Windows 95/98. The free access application can be downloaded at www.microav.com.

NetZero Still Number One

AltaVista is still well behind leading free Internet access provider NetZero, which has signed up more than two million users.

Both AltaVista and NetZero subsidize their free access with advertising, as users essentially view ads in exchange for free access. AltaVista’s free access in the United States is powered by patent-pending technology from 1stUp.com, a provider of ad-supported Internet access solutions that also has CMGI as a majority shareholder.

AltaVista has combined its free access service with what the company bills as the world’s first microportal, a tiny application that offers personalized news and information and links to various parts of AltaVista. The microportal takes up less than five percent of screen space and contains a rotating advertisement. Users must interact with the microportal once per hour to receive free access.

Additionally, AltaVista is working on expanding into Canada. The company plans to offer nationwide free dial-up Internet access that covers more than 85 percent of Canada through local phone numbers.

According to AltaVista, this service will be available by December 15th. The premium dial-up network of PSINet Limited, a Canadian subsdiary of PSINet, will be used for AltaVista’s free access users in Canada.

Highly Anticipated IPO

In addition to expanding its services, AltaVista has started a marketing campaign that includes prominent television advertising. The increased brand awareness that AltaVista generates now could play a big part in the success of the company’s initial public offering, which is expected to happen next year.

Investors are already expecting AltaVista’s offering to be extremely active, whenever it happens, largely because of the presence of CMGI. AltaVista had previously been owned by Compaq, which was criticized for failing to take the company public.