LibertySurf

» see libertysurf.fr as it lived, on the wayback machine

~ the eulogy ~

An internet account that costs nothing is not free. Somebody is still getting paid, and in france at the end of 1999 that somebody was the phone company. LibertySurf gave you the account and the software with no monthly bill. What you paid was the local call, metered by the minute, and a share of that minute came back to the provider. The business was a cut of your telephone bill dressed up as an internet company.

It was built in 1999 by two owners who had no obvious reason to be in the same room. Kingfisher was a british retail group that owned Darty and BUT in france. Europ@web was Bernard Arnault's internet holding, the luxury-goods fortune looking for somewhere to put dot-com money. They took 45.5 percent each and put in close to 700 million francs, roughly 107 million euros. France already had Free doing something similar and World Online circling the same idea, so LibertySurf was not first. It was simply the one with the deepest pockets behind it.

The whole thing lasted about fourteen months as an independent company. It listed on the Nouveau Marche on 16 march 2000 at 41 euros a share, closed its first day up nearly thirty percent, and touched 79 euros, which valued a two-year-old dial-up provider at 6.8 billion euros. On 8 january 2001 Tiscali agreed to buy it for 900 million euros in shares, at a price of 9.83 a share. Anyone who bought at the listing lost three quarters of it in under a year.

i was on a turkish dial-up line in exactly those years and the free-access model never arrived here in that shape. In Ankara you paid twice: a subscription to the ISP, and Turk Telekom for every minute of the call on top of it. The idea that the call alone could carry the whole cost of the account was a french and british argument about how phone termination fees got split, and Turkey's phone monopoly was not splitting anything with anybody.

~ the dossier ~

~ how the free part worked ~

The trick was regulatory rather than technical. When you dialed an access number, the incumbent telco collected the call charge and passed a slice of it to whoever owned the number you had reached. If enough people dialed you for long enough, that slice paid for the modem banks and the bandwidth with something left over. So the correct customer for a free ISP was not the person who paid the most, it was the person who stayed connected the longest.

It worked beautifully while the whole country was on dial-up and it stopped working the moment ADSL arrived, because a broadband line is a flat monthly charge with no per-minute slice to skim. Every free ISP in europe hit that wall at the same time. The ones that survived it did so by turning into ordinary subscription businesses, which meant competing on price against the incumbent telco, which is a much worse business than the one they had started in.

~ the sixteenth of march ~

The listing is the part worth remembering because of what it was standing next to. The Nasdaq peaked on 10 march 2000. LibertySurf came to market six days later. There is no cleaner marker for the top of the european dot-com run than a free ISP being valued at almost seven billion euros in the same week the music stopped.

Kingfisher and Europ@web each walked away with about 235 million euros of Tiscali stock for their 35 percent stakes, which sounds like a decent outcome until you remember Tiscali stock in 2001. Sir Geoffrey Mulcahy's public line was that the european ISP market was consolidating and this was the moment to realize value for shareholders. Read plainly, that is a retailer admitting it had no idea what to do with an internet company.

~ what was left to sell ~

The consumer brand went dark quickly. Tiscali put its acquisitions under one name and LibertySurf customers became Tiscali customers. What did not die was the legal entity, Liberty Surf Group SAS, which turned out to be the most durable thing anyone built here. Tiscali sold the french business to Telecom Italia in 2005, where it traded as Alice. Telecom Italia sold the same entity to Iliad on 26 august 2008 for 775 million euros, with 850,000 subscribers and 350 million euros of carried-forward losses attached, and the losses were a meaningful part of the price.

So the name survived for eleven years after nobody could sign up for it, because a holding company is easier to keep than a brand. The last piece to go was the mail. People had libertysurf.fr addresses and kept them through three changes of owner, printed on business cards and typed into forms by people who had no idea who owned the domain. On 18 april 2012 Free pointed libertysurf.fr and webmail.libertysurf.fr at free.fr, and there was nothing at the address anymore.

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