NetZero Launches Ad-Backed Access Service

Startup operation NetZero Inc. launched a free Internet access service backed by highly targeted ads in an on-screen window that can’t be closed.

The company has funding from idealab Capital Partners, the venture capital arm of Bill Gross’s idealab incubator. Other Idealab companies include GoTo.com, CitySearch and eToys.

To subscribe to NetZero, users must complete a profile that captures their interests and demographic data. NetZero’s patent-pending zCast software automatically refines the profile by continuously monitoring online behavior, facilitating the delivery of precisely targeted ads.

The zCast software provides Dynamic Targeting–a system that generates geographic, demographic, psychographic and behavioral information in real time.

NetZero will provide free Internet access via a local dial-up account and an email account for each individual user in a household, a business or at specific location, such as a school or public library.

“Listeners and viewers don’t pay for radio or network TV, and there’s absolutely no reason to pay for Internet access,” said Ronald T. Burr, CEO of NetZero.

“Where banner advertising is hit or miss at best, NetZero delivers ads users actually want to see. . . This is a huge breakthrough, especially for local advertisers, who have yet to see the interactive medium work for them,” he said.

Strategic partners include AGIS in Detroit and NetGravity in San Mateo, CA. AGIS is providing the backbone infrastructure; NetGravity will deploy exclusive ad server software for NetZero.

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. 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.

Because the AdVantage Window operates independently of both content and the browser, 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.

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

NetZero said it designed its system and software to disassociate the subscriber’s information from his or her identity, for privacy purposes. NetZero, a member of TRUSTe, said it will not sell its list of subscribers or otherwise provide individual subscriber data to any third party.