Dixons’ Freeserve Takes No. 2 Spot, According To BMRB Research

Only six months after launch (see DoubleClick To Sell Ad Space On UK’s Fastest-Growing ISP), Dixons’ free internet service provider, Freeserve, has taken second place in the UK’s home internet market. According to BMRB International’s Internet Monitor survey, Freeserve had a 13% share of the home access internet market at the beginning of this year, being beaten only by AOL’s 18% share.

The number two spot was previously held by Compuserve which slipped from holding a 23% share in 1997, to just 11% in 1998. Author of the survey, Patrick Diamond, says: “We are entering a new phase of development in the home internet market, which is marked by price competitiveness.”

Indeed, since Dixons launched Freeserve in September a number of other companies have joined the free ISP bandwagon with their own services. Tesco is currently offering free access to its ten million loyalty card holders; the Mirror Group is planning a service; BT has launched ClickFree (see BT Confirms Free Internet Access Launch) and Toys R Us has also created a free access service. News International and WHSmith are also thought to be winding up to the launch of a free ISP.

It is expected that this growth in free net access will force the existing subscription-based services to rethink their businesses. Services such as Freeserve make money through web advertising, sponsorship and e-commerce facilities but it is understood that most free ISPs are currently running at a loss.

BMRB International: 0181 566 5000 … http://bmrb.mediatel.co.uk/ Dixons Group: 01442 888 588