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NetZero

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Launched in October 1998, NetZero is a new Internet service that provides consumers with free and easy access to the Internet while offering advertisers a highly effective way to target those users.

NetZero provides consumers with unlimited Internet access, e-mail and navigational tools to enhance their online experience: all for free. For advertisers, our service offers a powerful online direct marketing tool with features and functionality that have distinct advantages over traditional forms of advertising.

A core feature of NetZero is The ZeroPort, a small window displayed on our users' computer screens while they are online. The ZeroPort can be moved to any point on the computer screen but cannot be closed so The ZeroPort is always visible regardless of where a user travels on the Web. This enables advertisers to display messages the entire time the user is online.

Subscribers to NetZero provide basic demographic and geographic information along with data on their hobbies and interests. This information enables us to build a personal profile that is unique to those users and to customize the information they see within our advertising window.

Our goal is to become the leader of highly reliable, free Internet access while providing advertisers with a method of precision targeting unavailable in any other medium.

NetZero Launches New Advertising-driven, Free Internet Access Service

WESTLAKE VILLAGE, Calif. (October 19, 1998) - Startup NetZero, Inc. today announced the launch of its free, advertising-driven Internet access service, aimed at shattering monthly access fee barriers and redefining Internet advertising with targeting capabilities unsurpassed in any medium.

NetZero is among the first companies launched with funding from idealab Capital Partners, the venture capital arm of Bill Gross's idealab incubator. Idealab companies include GoTo.com, CitySearch, and eToys, among others.

To subscribe to NetZero, users must complete a profile that captures interests and demographic data (available at www.netzero.net). NetZero's patent-pending zCast software automatically refines the profile by continuously monitoring online behavior, thereby facilitating the delivery of precisely targeted advertising. The zCast software provides Dynamic Targeting TM -- an exclusive system that generates geographic, demographic, psychographic and behavioral information in real time.

Precise targeting is critical to the Internet advertising market, now valued at $1.3 billion and projected to reach $4.5 billion by the year 2000. According to Jupiter Communications analyst Evan Neufeld, "the growth of the Web advertising pie will be increasingly dependent on the successful introduction of real targeting."

NetZero will provide free Internet access via a local dial-up account and an e-mail account for each individual user in a household, a business or at specific location, such as a school or public library. In addition to the zCast software, the NetZero CD-ROM includes Microsoft Internet Explorer and Netscape Communicator - including their respective e-mail programs - and supports such popular third-party e-mail packages as Qualcomm's Eudora.

The AdVantage Window

On the desktop, zCast opens the AdVantage Window, a movable, 1-inch-by 3-inch portion of an 800 x 600 display that continuously delivers high-quality, 30-second ads in sync with the user's profile, interests and online behavior. Unlike banner ads, which are tied to specific Web sites, the AdVantage Window delivers personalized ads directly to the subscriber. A subscriber visiting an automaker's site could receive an ad for the car dealer down the street. Or, a subscriber browsing book reviews could be greeted with a special promotion from amazon.com.

The subscriber can move the AdVantage Window to a preferred location on the screen, but cannot close it. Controls on the AdVantage Window enable subscribers to bookmark an ad, scroll forward and backward, and print coupons or other promotional offers. From the AdVantage Window, NetZero subscribers also have one-button access to the powerful GoTo® search engine and PeopleLink™ real-time chat facility.

Because the AdVantage Window operates independently of both content and the browser, for the first time ever ads can be targeted to a specific URL. American Airlines, for example, can now display its ad before NetZero subscribers who visit any travel site. An advertiser can even display its ad in front of a competitor's Web site; Avis could, for instance, target its ad to the Hertz URL. This "URL targeting" takes place in real time, displaying the ad when the page loads.

For precise local market targeting, NetZero can drill down to within a five- to seven- mile radius of the subscriber, by relying on the three-digit dialup phone prefix to create a geographic profile.