NetZero, one of the few remaining providers of free Internet access, is slashing staff, selling a subsidiary, and reducing its free service to save money, company officials said.
The company has eliminated 66 positions and will reduce the number of free hours available to basic service customers from 40 to 10 a month, effective Oct. 1.
It also sold subsidiary RocketCash. The sale closed Wednesday, but neither the name of the buyer nor the terms of the deal were disclosed.
"If we have a business tangential to our core business, and if we are spending a lot of time or effort on that, this market will not give us credit for that," NetZero (NZRO) chief executive Mark Goldston said. "We can't afford the diversion."
Goldston said NetZero wanted to make the cost-cutting moves before its merger with New York-based Juno Online Services in a deal that will create the world's second-largest Internet service provider behind AOL. NetZero hopes to close the stock deal by year end.
The goal is to move people from free service to a "Platinum" plan that costs $9.95 a month.
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Tax ban: A moratorium barring taxes on the Internet would be extended for five years under legislation approved by a House subcommittee.
The panel sidestepped the more complex issue of whether state sales taxes should apply to Internet transactions. The current three-year moratorium barring taxes on Internet access and taxes that single out the Internet expires Oct. 21. The measure approved would extend that ban until Dec. 31, 2006.
Rep. Mel Watt (D-North Carolina) tried to attach an amendment that would give states five years to simplify their sales tax systems and permit Congress to vote on such a compact in 2006 if at least 25 states reach agreement.
But the panel's chairman, Rep. Bob Barr (R-Georgia) rejected the amendment, saying it was unrelated to an extension of the Internet tax moratorium.
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Garage sale: Metricom is auctioning off its business, according to the company's website.
The auction, set for Aug. 16, includes the Ricochet network in the 17 cities where the company offered its wireless service or had infrastructure in place. Also included are all patents related to the service and wireless licenses.
It was unclear what will happen to the company's 51,200 subscribers in various cities from New York to San Francisco. The future of the company's employees also was not immediately known.
The website said the business could be sold as a whole or in parts. A Metricom (MCOMQ) spokesman did not return telephone messages seeking comment. Neither did Kevin Dowd, the corporate turnaround specialist who on Wednesday was named Metricom's chief executive officer.
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Safe buy: Tyco International is buying Sensormatic Electronics for $2.2 billion in stock.
Tyco (TYC) said the deal would complement its existing fire and security monitoring operations marketed under names like ADT, SimplexGrinnell and Thorn Security.
Tyco would also assume $116 million of debt in the deal.
Tyco is offering $24 a share of its stock for each share of Sensormatic (SRM). That is a 60 percent premium over Sensormatic's closing price of $14.94 on Thursday on the New York Stock Exchange. The deal has been approved by the boards of both companies but is subject to regulatory approval. The companies expect to complete the deal in September or October.
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Lost in space: Hamilton Sundstrand, a division of United Technologies (UTX), announced it has purchased a space and defense instruments manufacturer for about $20 million.
The Sensor Systems Division of Orbital Sciences (ORB) produces instruments for the space and defense industries, and industrial markets.
Sensor Systems and Hamilton Sundstrand share many customers such as NASA, Boeing and the U.S. and British navies.
"Sensor Systems' capabilities complement our own and provide opportunities for systems integration in key defense and space markets," said Jim Gingrich, president of Hamilton Sundstrand's Flight Systems & Services segment.
