Dell Jumps on Net Service Bandwagon

Dell Computer, aiming for a bigger share of the consumer market, will announce today that it is bundling a year of Dell-branded Internet access with some desktop and notebook computers.

The long-expected offer comes after Dell, the largest direct seller of computers, partnered with MCI Worldcom’s UUNet Internet service provider. UUNet has been used by competitor Gateway Inc. since February.

Dell, like Gateway, will offer the service for $129 a year after the first 12 months. Most ISPs offer unlimited Internet access for about $20 a month.

“Our strategy is to become the single source of information technology for the home,” said Klee Kleber, Dell’s director of consumer marketing.

Dell is the second-largest PC company in the U.S. behind Compaq Computer, according to research firm International Data Corp. But the Round Rock, Texas-based company has lagged in the consumer arena.

The move comes after a number of retailers and Internet access providers, including America Online’s CompuServe unit and Microsoft Network, began offering rebates to customers who buy computers bundled with their ISP.

“It’s a no-brainer move for Dell,” said analyst Kurtis King of Banc of America Securities. “Anybody that’s serious about selling to consumers has to tie in the hardware purchase with Internet access.”

Consumers who don’t want Internet access can have $75 taken off the computer purchase price, Dell’s Kleber said.

Gateway includes a year of Net access with every computer that retails for more than $1,000, spokesman Brad Shaw said.

“Given Dell’s track record of piggybacking on some of our consumer innovation, it’s not a surprise,” Shaw said. “The good news is, we’re the dominant [direct] player in the consumer space. We are now the fastest-growing ISP in the country.”

Dell had the fourth-biggest share of the consumer market in the first quarter, according to Ziff-Davis, behind Compaq, Gateway and Hewlett-Packard.