Like most true e-companies, Freeserve's main business weapon is the information it gleans from its extensive customer base. And it continues to produce several gigabytes more every day, courtesy of its 2 million registered users. To put that in perspective, a gigabyte of data is the equivalent of 500,000 sheets of typed A4 paper. Freeserve knows that it needs to start making better use of the information it creates if it is to have any future at all.
Currently Freeserve is the UK's largest Internet service provider, with 35% of the total ISP market and it needs to hold onto that very fickle customer base. Dotcoms like Freeserve are given a market value based on their customer database - every customer it loses lowers its market capitilisation.
The problem is that the free Internet access model, which Freeserve launched and rode to dizzying heights of success in 1998 and 1999, is now a standard offering.
The number of UK ISPs is growing exponentially, and call charges and subscription rates are no longer a viable revenue model. Along with its rivals, Freeserve has to start looking for other sources of income through offering e-commerce services and "selling" the eyes of the users that access its Web pages - in much the same way that TV companies sell advertising time during the programmes they broadcast to viewers.
Freeserve's strategy over the past few months has been to move from being everyone's favourite ISP to becoming a valued source of information and services that its customers want to come back to again and again - in other words, a portal. Eventually it wants to run a whole series of portals - and to this end has recently launched two standalones - an auction site called FS Auctions and one aimed at women called iCircle.co.uk
Any company can launch a Web site and call it a portal, but to make a successful one, Freeserve is going to try and squeeze every drop of business value out of its information.
This is where Helen Litvak comes in. Litvak is one of a rare breed of professionals who understands both marketing and IT. She joined Freeserve in August 1999 as marketing data manager with seven years experience of marketing and databases. She was previously European database marketing manager for GE Information Services.
Litvak describes Freeserve's goal succinctly: "We want to get to know our customers and in turn earn more revenue.
"In order to achieve this we need to build a complete picture of our customer base so we can tailor content and services on the site to meet their needs."
Litvak's arrival at Freeserve saw the ISP launch an initiative to deploy new customer and site tracking software which will enable it to analyse users' interests and demographics to a level unmatched by its competitors.
"The aim of this initiative is to develop and organise content, enabling us to provide our customers with access to everything they need from the Web within one click on Freeserve."
Eventually, Freeserve hopes to be able to gain an insight into the stickiness of its site, seasonal trends, online and offline purchasing behaviour and customer acquisition and loyalty.
Once gathered, it will be able to use this information to maximise its advertising revenues by attracting the right visitors to particular parts of its site, thus being able to identify where adverts should be placed and what rates each area of the site should command.
By understanding the interests of its subscribers, Freeserve will also be more able to launch e-commerce services at them.
So much for Freeserve's dreams of a rosy future as a portal: how is it going to make it happen?
IT will be at the centre of Freeserve's data marketing plans, but it has never been a core part of its business - its ISP service is hosted by Planet Online in Leeds. It decided to outsource analysis of all its data to business intelligence specialist WhiteCross Systems in Bracknell, which provides the service as an application service provider or ASP. The cost? Litvak will only say that the fee is somewhere between £10-£100,000 a month.
Litvak tells WhiteCross which part of the Freeserve site to collect information from and the data is then collected, stored and analysed remotely using its software and servers. All Freeserve employees have to do is view the results via their desktop.
Eventually they will be able to do this in three ways.
At a basic statistical level, Freeserve staff will be able to look at one-dimensional information such as Web registrations, and which ad banners are being clicked on. At a more detailed level, marketing or brand managers will be able to use structured query language (SQL) tools to correlate data, which they could use to find out what type of people in what parts of the country are clicking on which parts of the site.
Finally, proprietary WhiteCross data mining software can be used to really delve into the information in response to a particular query.
The project started last August and began with a needs analysis of Freeserve's employees - then 35, now more than 200 - and the information that would help them do a better job.
Freeserve and WhiteCross have now finished off the core data analysis model and have started collecting key data that it wanted from day one - registrations and demographics, dial-in logs of how long users spent on the site and with which browser, and Web logs such as page impressions.
By the end of this month Freeserve will be able to analyse advertising and e-commerce logs, which will tell it what ad banners are being clicked on and what is in people's shopping baskets.
This data will show it where its revenue streams are coming from - enabling it to charge premium ad rates for particular parts of its site, and identify new e-commerce opportunities.
By the end of this year, it will be analysing the types of search engine queries being made on its site, which will show it where customers need more information.
Datamining is already producing dividends, says Litvak.
"Our advertising department was able to ascertain that our women's portal, iCircle, had a disproportionate number of over-50s using it, and can now use that information to target advertising.
Litvak said that the information garnered had also led to new ideas for further portals.
"Although we are a business-to-consumer Web site, we discovered that over 300,000 of our registered users were businesses. We can now use this data to migrate them onto our small business portal when it is fully launched."
As probably the best known Internet start-up in the UK, Freeserve will perhaps act as a example for other young companies on the need to constantly re-appraise their business strategy. And with the information they have at their fingertips, Freeserve will better placed than most to come up with the right moves.
Company profile - Freeserve
Litvak's 10-point plan for knowledge management success
1. Aim to make information management a core function of the company
2. Understand as much as you can about all the technology available in the market to meet your data management requirements
3. Write a short, concise plan on your information management strategy and set reasonable expectations
4. Book a presentation slot on the board/senior management meetings and get phased sign off on your data solutions
5. Spend time with the IT department so that they understand the project fully and can dedicate resources to it
6. Know what data the company has and where it is stored so that you know how to access it
7. Talk to staff as early in the project as possible to understand their data needs
8. Obtain a universal view of your customer through detailed analysis of all the data
9. Work with advertising and e-commerce partners to help target their offering and maximise use of budget
10. Ensure privacy of your customer by not contravening data protection regulations in your use of their data
The key tasks of the marketing data manager