UK start-up ISP, themutual.net Ltd is offering subscribers to its free-subscription internet access service ‘shares’ of equity as a sweetener to get them to join up. The firm says it is offering sliding-scale multiples of ‘units’ to registrants, rather than shares, which are expensive to give away. Units in themselves are worthless until the company is either bought or floated, at which point each unit is turned into a share. This supposedly gives incentive to users to stay online longer, pumping more money into the firm, which will make its cash by taking a cut of dialup revenue in partnership with telco Telinco Ltd. This is a model that has already been tried in the US by various web companies, but has yet to make a significant breakthrough to the UK market.
The theory goes that themutual.net will get so many subscribers with dollar signs in their eyes that they will be able to effect a flotation, or become enough of a threat to become an acquisition target, within a relatively short space of time. Dixons Group Plc’s Freeserve ISP said Monday it intends to float within the next three months (within a year of its launch). Whether a start-up with no brand recognition which targets experienced net users can attract the same amount of support is another matter entirely.
