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Technology Stocks : Network Associates (NET) -- Ignore unavailable to you. Want to Upgrade?

To: AlienTech who wrote (5409)	6/24/1999 3:27:00 PM
From: Robert Frisbee	Respond to of 6021

This is not comforting for DirectWeb. Sounds like execution is lacking and poorly planned. Hope they get the bugs out soon. Swamped by offer of free PCs, DirectWeb scrambles to regroup By Rob O'Regan 06/23/99 12:23:00 PM ZDNet Related Stories •More Free PCs •There's no such thing as a free PC •Will free PCs attract Net neophytes? NEW YORK -- Once bitten, twice shy? Not in the case of DirectWeb Inc. Caught off guard by overwhelming demand for a March promotion promising a free PC for subscribers to the startup's Internet service, DirectWeb has had to regroup, in a hurry. The Mount Laurel, N.J., company originally planned to ship 25,000 PCs by the end of June to customers willing to subscribe to its Internet service. But DirectWeb had to pull back on its plans, holding up the first shipments by a month and decreasing the number of PCs it would give out in its pilot test in the Philadelphia area. "Two weeks [into the program] I had to shut it down," DirectWeb President and CEO Dennis Cline said in an interview at PC Expo here this week. "We ended up changing our approach on the fly. We didn't know what to expect." No. 1 problem: lack of PC experience The major surprise, Cline said, was the lack of PC experience of people signing up for the PC giveaway. DirectWeb had expected more knowledgeable PC users, but "over half the people [requesting the service] were novice users," he said. As a result, DirectWeb had to revamp its client software to make the systems even easier to use. DirectWeb is just now shipping its first test systems to Philadelphia-area subscribers; it plans to ship between 10,000 and 15,000 PCs over the next eight weeks to those customers. After completing the Philadelphia trial, DirectWeb plans to offer its service nationally late in the third quarter. "The No. 1 issue for the national launch is the client software," said Cline. "We want real-world testing by thousands of users." Pricing for the service will start at $19.95 a month, including a Celeron-based PC running Windows 98. But while DirectWeb initially did not require a minimum service period, subscribers must now sign a three-year contract for the service. An increasingly crowded space DirectWeb can't afford many additional bumps in getting its pilot program off the ground. The company is competing against not only a handful of other small companies offering free PCs, but also against the likes of Dell Computer Corp., Compaq Computer Corp. and Gateway Inc., which are jumping into the space with varying degrees of free or discounted systems as part of an Internet service package. (On Wednesday, Free-PC Inc. announced that it has begun shipping to consumers the first 10,000 of its free personal computers with free Internet access and e-mail.) For his part, Cline remains undeterred in his strategy. "Our goal," he said, "is to gain people's trust as the gatekeeper to the Internet." And while DirectWeb's first focus is on the consumer market, it has businesses in its sights as well. "We have to do [the business market]," Cline said. In fact, he added, entering the business market will likely be easier than selling the service to novice users. "The hardest thing in the world to do is to make something easy," he said. "Once we have managed those expectations, it becomes easier to address a more sophisticated market." Cline's goal: to be selling to businesses -- particularly smaller shops without a lot of technology expertise -- within the next year.