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VIDEORecession Resuscitates Dial-Up Internet
By
Scott Reeves Feb 26, 2009 10:00 am
Brief scrutiny of today's headlines.
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The reason: price.
EarthLink (ELNK) and Net Zero, a unit of United Online (UNTD), are cranking up advertising efforts in an effort to snare bargain-hunters trading down from broadband or putting off an upgrade to it, the Wall Street Journal reports.
This is an unexpected twist in an age of ubiquitous -- and often free -- Internet wireless service at yuppie meccas like Starbucks. It also underscores the continued popularity of Internet pioneer AOL, a subsidiary of Time Warner (TWX), and the fact that it continues to serve millions of users.
EarthLink pitches “Connect for Less” at $7.75 a month. NetZero offers dial-up Internet access for $9.95 a month.
Both companies pitch the savings gained by downgrading to dial-up service from higher priced broadband plans. The theory is that the recently unemployed will put up with the slower access to regularly review job listings and e-mail resumes from home.
EarthLink’s plan is offered through its PeoplePC subsidiary and advises potential customers, “You may incur phone charges depending on your location and local calling plan. Please check with your local phone company to make sure that the access number you selected is a toll-free call.”
But the market for dial-up services, sometimes derisively called “narrowband,” continues to shrink.
EarthLink says it lost 173,000 dial-up subscribers in the fourth quarter and NetZero lost 86,000. Earthlink had 1.76 million dial up subscribers at the end of the year and NetZero had 1.74 million.
When typewriters make a comeback, we’ll know the recession has taken a huge bite out of American households.
For more on dial-up, check out Hoofy and Boo's always astute report.
No positions in stocks mentioned.
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