RealTime IT News

Company to Give Away PCs, Internet Access

idealab! Monday launched Free-PC Inc., the first company to offer consumers a free personal computer, Internet access and e-mail in exchange for allowing targeted advertising messages delivered to the desktop.

USA Networks Inc., whose strategic assets include Ticketmaster Online- CitySearch Inc., Internet Shopping Network/First Auction and Home Shopping Network, has agreed to invest $10 million in the new company, idealab! said.

Alta Vista Internet services and USAi properties will be included in the Free-PC home page interface.

Free-PC will deliver Compaq Presario Internet PCs featuring Alta Vista Internet services. Free access to the Internet as well as free e-mail services will be provided by NetZero.

Consumers may begin applying immediately for their Free-PC at www.free-pc.com. The company will ship its first 10,000 units to qualifying customers in Q2.

"Free-PC is the breakthrough first product to start an inevitable trend," said Bill Gross, chief executive officer of idealab! "Set-top cable boxes have been free for a long time, and now cell phones are virtually free. For the first time, Free-PC is making the personal computer free.

"This is now possible because of the explosion of e-commerce, and the opportunities for interactivity and targeting that the computer allows. This means that you can have the ultimate live yellow pages and local directories, including events and ordering, right from your home. And merchants will pay to reach you, so they essentially will subsidize the cost of the PC, indirectly..."

Since the giveaway was announced,visitors flocked to the site, slowing it to a crawl.

When consumers apply for a Free-PC, they will be asked to fill out a detailed questionnaire that provides the company with typical demographic data, such as age, income and family status, along with information about personal tastes and interests. These data are then used to determine which advertisements are displayed, ensuring that the ads have relevance to the consumer and assuring corporate sponsors that their ads are reaching qualified consumers.

Ads will appear in a frame that surrounds the working area of a high- resolution screen, and they will be displayed whether or not the user is online.

Ads are drawn from a collection stored on the hard drive that ships with the PC, allowing rich media and interactive ads to be displayed without the delay associated with downloading Internet ads. The advertisement database stored on the PC will be updated periodically in the background when the user is online.

Free-PC has an agreement with Cybergold Inc. to provide its incentive-based advertising to the Free-PC desktop. Cybergold's advertisers include Disney, ESPN, credit-card issuer MBNA and Internet car retailer autobytel.com, among others.

"We think this concept will provide a powerful benefit for both consumers and advertisers," said Don LaVigne, chief executive officer of Free-PC, Inc.

"By providing us with information about themselves, consumers not only get a free computer, this will allow us to customize their experience by delivering the most relevant content and advertising directly to their desktop. For advertisers, Free-PC represents the first real opportunity to reach a mass audience via the computer."

"We are also committed to the highest standards of data security for our customers," LaVigne said. "All information will be held in strict confidence by Free-PC. No personal information will ever be revealed to advertisers, and the company promises to never sell or give away consumer data to any third party."

Free-PC will buy Compaq Presario Internet PCs for the 10,000-unit trial. Hardware features include CD-ROM and floppy drives, Microsoft Windows98 and a 15-inch color monitor. Each Free-PC also includes free Internet access with local dial-up along with free e-mail.

idealab!, founded in March 1996 by entrepreneur Bill Gross, currently has more than 20 businesses in various stages of development including CitySearch, GoTo.com and eToys.