from the New York Times
February 8, 1999
Plan for Free PCs Has a Few Attachments
By MATT RICHTEL
The personal computer, already dropping precipitously in price,
may in some cases become free -- with a few strings attached.
In a variation on a popular cellular-telephone business model --
sign up for service and pay nothing for the phone -- a Southern
California start-up, Free PC Inc., plans to announce Monday that it
will give away Compaq personal computers and a free Internet
connection, too.
The catch: Users of the computers must accept advertisements that
will constantly be displayed on the 15-inch screen, whether the
person is on the Internet or operating the computer off line.
Not only that, but consumers who want to register for a free PC
will have to answer some 20 questions about themselves, involving
income, education and the like. The company will then decide who
actually gets a free computer on the basis of who best fits the
demographic profiles that advertisers are seeking.
"The price of hardware and a connection has come down
dramatically," said Donald La Vigne, Free PC's chief executive.
"There are a lot of people who still aren't participating and a lot
of marketers who want to get at those people."
There could be a chicken-or-egg complication, of course, since
applying for a free computer will require visiting the company's
Web site, www.free-pc.com, where Free PC intends to start
registering applicants Monday.
Free PC, which is in Pasadena, Calif., plans to make its
announcement Monday at the Demo Conference, a technology industry
gathering in Indian Wells, near Palm Springs.
Free PC is the brainchild of Bill Gross, the chairman of Idealab, a
Pasadena-based Internet business incubator and venture capital firm
that has backed other ventures.
La Vigne said that Free PC planned to give away 10,000 computers
starting in the second quarter of this year as a way of testing and
refining the concept.
La Vigne declined to give details about several key aspects of the
business. He said the PCs were ones that might normally retail for
around $600, for example, but he declined to specify their power
and processing speed. He also would not identify any of the
participating advertisers with whom he said he was negotiating.
As the PC has increasingly been identified as an appliance, and
fallen well below the once-magical $1,000 retail figure, industry
analysts have suggested that an approach like Free PC's might
emerge. Already, several companies offer free dial-up e-mail access
and free Internet connections, which are subsidized by ads.
But the free Internet business model has proved challenging,
because it has been difficult to get enough subscribers to attract
advertisers.
Copyright 1999 The New York Times Company
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