DigiScents Buys Scratch & Sniff Rival

Analytical research firm Kamikaze Communications predicts that by 2005, half of all consumers will be begging for a little scratch and sniff action with their online content, creating a multi-billion dollar industry for digital scent technology. Okay, I actually just made that up. But yesterday, Oakland-based DigiScents did announce plans to acquire its Israel-based rival SenseIT Technologies for an undisclosed amount of paper shares.

DigiScents takes odoriferous emanations pretty serious. The start-up is in the business of developing the end-all, be-all solution for scent-enabling the Web. The idea was cooked up by a pair of Stanford grads - one with a knack for molecular biology, the other bitten by the entrepreneurial bug. Admittedly, the original concept must have felt right at home in the hysterical dot-com atmosphere that blanketed the public markets last year, and predictably, DigiScents was able to lasso more than $10 million in financing from eager investors at the outset.

Despite the monumental technology boom consumers are enjoying, the Internet is far from a three dimensional experience. Of the body's five senses, only sight and hearing get any attention from the high-tech industry, with touch arguably coming in a distant third. DigiScents is on a mission to add a little sweet and sour to your daily dose of Internet, hoping to make it a more well-rounded Web surfing experience.

DigiScents' scent gizmo is appropriately dubbed the iSmell. It's about the modest size of a PC audio speaker, and it hooks right into your computer's serial port. Whenever the unit receives a specially coded scent using the upstart's patented ScentStream technology, a tiny fan sends the individual smell wafting in your general direction, tickling the nose with anything from perfume to pine trees.

On the surface, iSmell looks primed to muscle its way into consumers' flavor of the month club. But DigiScents has been parading its vaporware technology for well over a year without any commercial results. While the working technology is definitely a reality, getting the product to market has been easier said than done. Initial estimates called for the unit to retail at $200 a pop. Now, nearly a year later, the product has yet to debut. But the suggested retail price has tentatively settled on a more reasonable $100 price tag, with plans to release the gizmo sometime next year to the public.

Will DigiScents buck the odds and turn its idea into a viable commercial enterprise? The short answer is no. It's a neato concept, to be sure, but fickle consumers will hardly be willing to shell out a C-note for a passing fad. And, to properly market the concept to mainstream PC users, the company will need more than word of mouth. While most any new idea can grab a fistful of private investor dollars during speculative times, iSmell won't likely get the necessary funding it needs from skeptical venture capital firms to see this idea brought to the mass market.

Any questions or comments, love letters or hate mail? As always, feel free to forward them to kblack@internet.com.

Want my daily missives delivered with your morning toast and coffee? Sign up for my DealTracker newsletter.