Juno Muscles Into Online Mall Crowd

Continuing its transformation from a free e-mail company to a multi-faceted Internet service provider, Juno Online Services, Inc. (Nasdaq: JWEB) announced a new shopping service today that will allow other online retailers to sell products on its Web site.

The new Shop@Juno service will provide three new revenue streams, the company said. Juno will charge individual merchants up-front fees to host their online stores, will take a cut of the profits from those merchants’ sales, and will charge “per-click” fees when consumers travel from the Juno site to a linked merchant’s site.

Juno also generates revenues through advertising sales on its site, through the sale of its enhanced e-mail service, Juno Gold, for $2.95 (US$) per month, and through its $19.95 per month Internet access service.

The company’s direct marketing efforts have been declining over the past year, as the company made a “strategic decision to de-emphasize direct merchandising in favor of higher margin e-commerce activities through the formation of strategic marketing alliances,” Juno said.

Shopping To The Rescue?

Juno is now bringing in 47 e-commerce merchants to help make that uphill climb a bit more manageable. Participating merchants include well-known Internet names such as 1-800-FLOWERS, Art.com, Bluefly, Crutchfield and Garden.com. Shop@Juno offers goods and services in more than 15 categories.

Whether these efforts will pay off in the crowded online shopping mall business remains to be seen. At the end of September, Juno had 132,000 Juno Gold subscribers and 268,000 Internet service subscribers.

Juno plans to take advantage of an extensive database of Internet users to market the new shopping mall. In addition to its half a million paying subscribers, the company has a database of 7.6 million accounts that have been registered with Juno since the company began its free e-mail service in April 1996.

Alhough Juno claims that it considers its Juno Gold and ISP numbers promising for services that launched just over a year ago, the company also admits that it joined a highly competitive ISP market as a clear underdog. “We face intense competition to acquire billable service subscribers. Our competitors for such subscribers include companies that have substantially greater market presence and financial, technical, distribution, marketing and other resources than we have,” Juno said in its third quarter statement.