The Web portal, which will end the service on Dec. 10, said it has been "forced to discontinue this offering because the company who provided the service and telecommunications infrastructure for it, 1stUp Corp., is going out of business."
Representatives from AltaVista were not immediately available for comment.
In November, AltaVista's parent and Net holding company CMGI Inc. (cmgi) announced that it would "wind down" 1stUp, its free ISP. The company, based in Andover, Mass., blamed the planned closure on an unhealthy market for online advertising and "insurmountable" capital costs to maintain the business.
On top of its partnership with AltaVista, 1stUp had offered its services via deals with Excite and Lycos, among other Internet companies. AltaVista offered assurances that the change would not affect the availability of its Internet search services.
The move comes on the heels of announced staff reductions and restructuring plans at the company.
AltaVista in September trimmed its work force by 25 percent, or 225 people, to focus on its namesake search engine and to accelerate its path to profitability.
The company has said that it plans to consolidate its operations in California into its Palo Alto headquarters. It has also said that its Shopping.com offices in Irvine, Calif., will be reduced and that the majority of its remaining staff will relocate to the headquarters offices.
The recent changes and layoffs at the company are indicative of AltaVista's attempt to refocus its efforts in a highly competitive market. Over the past year, AltaVista had been trying to transform the company into an all-in-one Web portal to compete with market leaders Yahoo! Inc. (yhoo), America Online Inc. (aol), and Microsoft Corp.'s (msft) Microsoft Network.
In its notice to members, AltaVista said that although it has investigated finding another supplier to provide a free Internet access service, it was unable to find a company that could meet the needs of its customers.
The company, which unveiled the free Internet access service in July 1999, said that it has made arrangements with Microsoft's MSN to assist its members in the United States who would like to move to the MSN Internet access service.
For a limited time, customers who sign up for MSN will receive three months of unlimited Internet access at no cost. After the three-month offer, the cost of the MSN service will be $21.95 per month.