Share offers raise free ISP stakes

Free Internet service provider (ISP) Blue Carrots (http://www.bluecarrots.com), launched last week, is aiming to build a customer base in the crowded market by giving its customers shares in the company.

The company, which has hired former Carlton Online managing director Carol Dukes as non-executive director, plans to establish itself as a top five player in the free ISP market by distributing a minimum of 80 per cent of its equity to regular users of its service. This could grow to 95 per cent if sufficient users subscribe.

According to Blue Carrots’ launch statement: “Members can help steer the direction of the company by voting on the types of content and commercial relationships that they would like added.”

Blue Carrots managing director David Dobson says: “[Blue Carrots’] content and the vested interest of members will draw people back, thereby differentiating it from free ISPs that have a high loss of visitors and low loyalty.”

The company, which has hired BMP Interaction to handle promotion, is planning online and print advertising, as well as distribution of CD-Roms at college sites and shopping centres.

The launch mimics that of rival free ISP company themutual.net, which in June offered new subscribers the chance to register for 10,000 “units” each in the company. Later subscribers were given the chance to collect 1,000 units each. These units will be redeemable for shares within the company flotation scheme, which gives users 50 per cent of the company’s total equity.

Mutual.net suggests that when the 10,000 units are converted to shares under its flotation scheme, they will be worth about &£520 “based on standard industry free ISP evaluation of &£1,054 per head”.

But Dobson insists that Blue Carrots is best-placed to deliver on its planned flotation and share giveaway, but is keen to avoid the dangers of a “carpet-bagger’s” mentality among users.

According to Dobson, shareholders who cash in their shares within three years will be penalised.