NetZero Acquires Key Assets of Freeinternet.com; Transaction Approved by Bankruptcy Court

Business Wire, Nov 1, 2000

Business Editors & Consumer Reporters

WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--Nov. 1, 2000

NetZero, Inc. (Nasdaq:NZRO), a leading provider of advertising- and commerce-supported Internet access, today announced that it has completed its previously announced acquisition of certain assets of Freei Networks, Inc., a national provider of free Internet access. Freei Networks, Inc., which is also known as Freeinternet.com or Freei, filed for protection under Chapter 11 of the United States Bankruptcy Code on October 6, 2000.

Subject to the terms of the agreement, NetZero will pay Freei Networks $5 million in cash in exchange for certain key assets of Freei, including the domain names Freeinternet.com, Freeinet.com and Freei.net; all proprietary rights; certain tangible assets; and the transition of Freei users to NetZero's service. Additional payments may be made under the agreement depending on the number of Freei users that subscribe to the NetZero service.

NetZero has reserved an account name and password for existing Freei users. These users will, in most cases, have the opportunity through a simple process to elect to transition to the NetZero service, while maintaining their existing Freei email address. After Wednesday, November 1, the Freei service will only be available to facilitate the transition of users to NetZero's service.

Freeinternet.com launched service in December 1998 in the Seattle metropolitan area and expanded to five major metropolitan areas in May 1999. In October 1999, the company launched service in all 50 states and currently serves users in cities throughout North America.

The NetZero service will not be available for all Freeinternet.com users. Users must first check local access numbers for accessibility in their area. Freei users who are not within a NetZero service area may have their accounts terminated. In addition, there may be limitations on the volume of emails and other data in a Freei user's account that will be available through the NetZero service. MAC users are not supported by the NetZero service at this time.

About NetZero, Inc.

NetZero, Inc. is a leading provider of advertising- and commerce-supported Internet access offering a broad range of interactive marketing, research and measurement solutions. NetZero offers consumers free access to the Internet, free e-mail and customizable navigation tools that provide "speed dial" to key sites on the Internet. Through proprietary technologies, NetZero offers advertisers unique targeting capabilities through numerous online advertising and sponsorship channels. The company's CyberTarget division offers marketers and advertisers mass-scale, online market research and measurement services. NetZero is a Cisco Powered Network, providing its access services to over 5.7 million registered users in more than 5,000 cities across North America. For more information, visit www.netzero.net. To obtain a CD, call 1-800-DEFENDER.

This announcement may contain forward-looking statements that involve risks and uncertainties. Actual results may differ materially from the results predicted. The potential risks and uncertainties include, among others, the risk that the proposed transaction will not provide NetZero with the expected benefits; that Freeinternet.com users will not experience service interruptions or will have access to the NetZero service; and NetZero's ability to integrate the proposed acquisition. More information about potential factors that could affect the company's business and financial results is included in the company's Form 10-K and other filings with the Securities and Exchange Commission (http://www.sec.gov) including (without limitation) information under the captions "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors." NetZero(R), Defenders of the Free World(TM), the NetZero(R) logo, zCast(TM), NZTV(TM), CyberTarget(TM) and The ZeroPort(TM) are trademarks of NetZero, Inc. All other names are trademarks and/or registered trademarks of their respective owners.