EarthLink in Talks to Acquire Volaris

EarthLink, the third-largest ISP in the U.S., will announce the acquisition later this week of Volaris Online's dial-up customer base, which comprises 250,000 subscribers in the Southeastern United States.

by Jim Wagner of internetnews.com [October 16, 2002]

EarthLink, the third-largest ISP in the U.S., will announce the acquisition later this week of Volaris Online's dial-up customer base.

Officials confirmed Tuesday morning a deal that's been rumored for days now, and is a significant subscriber boost to EarthLink's existing 4.7 million subscribers. According to Carla Shaw, EarthLink spokesperson, the details of the acquisition won't be announced until their release is issued.

According to Volaris' website, the ISP serves 250,000 dial-up, DSL, and dedicated access (T-1) customers throughout the Southeast U.S. region. Officials said they wouldn't divulge the number of dial-up customers make up that 250,000.

Volaris as an entity has been an ISP serving a quarter-million customers for less than a year, the result of a merger between Durocom and 10 other ISPs in the Southeast last November.

Calling itself the "Southeast's alternative provider to AOL," according to Ozzie deFaria, Volaris CEO, the company now finds itself looking for revenue help from an AOL competitor.

While Volaris officials weren't available for comment at press time, the ISP is likely to announce its decision (in the EarthLink release) to focus on business-class customers, the ones who buy into pricey broadband and dedicated access lines. Dial-up residential service, while a consistent moneymaker for any ISP, doesn't have the profit margins to be found in business services.

While EarthLink's main competitors, AOL and MSN, have been busy spending millions on advertising campaigns to launch the latest updates to their services, EarthLink has been quietly buying up ISPs and related companies.

The ISP has long sought customer growth through acquisition. In June of 2000, EarthLink bought out OneMain.com and its 762,000 subscribers, while last year it acquired the dial-up subscriber base of Netpliance's i-opener, a Texas-based operator with roughly 50,000 customers.

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