Hansen is CEO of Internet service provider Brigadoon.com, which has applied to purchase @bigger.net, a San Jose, Calif.-based company that took a $59.95 fee from 40,000 people, promising them a lifetime of Internet access, and then filed for bankruptcy last month.
Many industry analysts insist that companies such as @bigger.net, which look to pay for the online services they offer by selling advertising, are built on shaky financial ground. It simply isn't feasible to pay for all the expenses of running an ISP through advertising, they argue.
But Hansen's company has been offering free Web hosting and Internet access to companies for three years, and he believes the model can work for consumers as well.
"The real issue here is, is free Internet a viable business model?" Hansen said. "We're doing this already ... it's simply a matter of being able to control your variable costs, as opposed to your revenues." Brigadoon will offer the same pricing plan @bigger.net used: Consumers surf the Web for free, as long as they tolerate an advertising window on their desktop while they're online.
The company will also offer priced services, such as paying a monthly fee in lieu of looking at commercials.
Brigadoon also plans to tap e-commerce-based revenue possibilities. For example, users could be offered the option of setting up an online store, as long as part of any income goes to the ISP. The approach is similar to that taken by free Web-based services, such as GeoCities and Tripod, which have taken to offering premium, paid services and e-commerce tools as a way to supplement ad revenues.
Hansen believes this variety of income streams will support the "free" Internet accounts it hopes to pick up from @bigger.net.
Not just one price
"Free Internet providers have mostly focused on one price point," Hansen said. "They don't look at what the costs are associated with that, and as they add more users, they're losing more money. Our model goes the other way -- we control the costs for each user."
He said Brigadoon took an interest in @bigger.net because the ad-supported ISP's strategy was similar to Brigadoon's policy of offering free Web services to nonprofit organizations.
Brigadoon hosts several dozen community-oriented groups.
The Bellevue, Wash.-based ISP signed a deal Friday to acquire @bigger.net. The companies are awaiting approval by bankruptcy authorities, which is expected next week.
Brigadoon has already started paying some of the bankrupt company's expenses, such as telephone bills, Hansen said.
Will retain staffers
Hansen plans to continue employing as many of the current @bigger.net employees as possible.
Some might question Brigadoon.com's ability to pull another company out of bankruptcy, however, since the Bellevue-based ISP is in Chapter 11 bankruptcy proceedings itself.
In October, Brigadoon's roughly 2,500 customer accounts were awarded to Pasco, Wash.-based Boss IG Internet as part of bankruptcy reorganization.
The company owed $1.6 million to Pacific Aerospace & Electronics, Wenatchee, Wash., and $2 million to other creditors. This spring Brigadoon reduced its workforce from 90 employees to 35.
Brigadoon sells Internet access nationwide. @bigger.net offered services in the San Francisco Bay Area and in Los Angeles.