Web portal AltaVista Co. will terminate its free Internet access service on Dec. 10. The company confirmed that 1stUp Corp., the vendor that provides AltaVista with its free Internet access service, is going out of business.

AltaVista and 1stUp Corp. are owned by CMGI Inc., which announced on Nov. 14 that it would sell or shut down 1stUp, its free ISP (Internet service provider).

In September of this year, AltaVista cut its work force by 25 per cent or 225 people. The company said it planned to consolidate its operations in California into its Palo Alto headquarters. It also announced its decision to reduce staff at its subsidiary Shopping.com in Irvine, California, and relocate the remaining staff to the headquarter offices.

But AltaVista spokesman Jim Shissler said that the two issues are unrelated.

“We did not reduce staff at Shopping.com more than at any other place,” he said. “We had five different locations and consolidated them at one place. Shopping.com was absolutely not cut more than other places. There was a cut across the board.”

He said that the overall reduction in resources at AltaVista was “just to generate organizational efficiency and get us on the path to profitability.”

The company restructuring was the result of leaving the media portal business, Shissler said.

“We want to focus our resources on search for both consumers and businesses,” he said, adding that AltaVista currently performs more than 15 million search queries everyday. “That’s what we’ve been doing.”

AltaVista has assured users that 1stUp’s closure will not affect the availability of its free Internet search services. The company has made arrangements to provide Internet access through Microsoft Corp.’s MSN Internet access service to U.S.-based members.

For a limited period, customers who sign up for MSN will receive three months of free unlimited Internet access, after which they will be charged US$21.95 monthly.

Chris Anne Wheeler, vice president of information services at ActivMedia Research LLC views this as part of a trend toward paid ISPs.

“Essentially it’s the economics of it,” she said. “It takes a lot of effort to keep e-mail up and running. Since it’s a free service there’s no way to maintain costs. Mostly, it’s a time consuming and financially burdensome service.”

Wheeler thinks that fee-based services are the only way ISP’s can make money.

“Maybe it’s a trivial amount of money, but it’s also an opportunity to do some marketing activities, to cross-sell other services,” she said.

AltaVista can be reached at http://www.altavista.com/.