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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Kenya AA who wrote (47379)	2/8/1999 3:40:00 PM
From: Elwood P. Dowd	Read Replies (5) \| Respond to of 97611

Monday February 8, 3:18 pm Eastern Time (Note: this article is ''in progress''; there will likely be an update soon.) Web entrepreneur to give away PCs, make money on ads PASADENA, Calif., Feb 8 (Reuters) - A well-connected Internet entrepreneur on Monday said he plans to give away personal computers in exchange for consumers accepting targeting advertising on their computer screens. Idealab!, the investment vehicle of venture capitalist Bill Gross, said he had introduced Free-PC Inc., a company that plans to offer consumers a Compaq Computer Corp. (NYSE:CPQ - news) personal computer, Internet access and electronic mail -- all for free -- in exchange for viewing targeted advertising. In a statement, Idealab! said Barry Diller's USA Networks Inc. (Nasdaq:USAI - news) had agreed to invest $10 million and link its series of Internet-related properties to the Free PC service. Free-PC plans to begin offering Compaq Presario Internet PCs with a range of Internet media and communications services from Compaq's Alta Vista Internet unit. It said it will give away 10,000 units to qualified customers in the second quarter. The move is designed to capitalize on falling computer prices and widespread hunger among consumers for Internet links and is expected to be followed by a wave of similar services to be introduced later this year, the company said. It reflects the transition of consumer PCs into low-cost consumer electronics devices in which a new class of PC service providers give away their equipment and try to make money through services available through the boxes, just as phone and cable companies do with cell phones or cable-TV equipment. ''Free-PC is the breakthrough first product to start an inevitable trend,'' Bill Gross, chief executive of idealab! said in the statement. "Set-top cable boxes have been free for a long time and now cell phones are virtually free. Free access to the Internet and free e-mail services will be provided by privately held NetZero. Consumers can apply for a Free-PC at 1. The machines to be given away include a 333 megahertz computer chip, a 15-inch color monitor, 32 megabytes of memory -- enough to run standard Windows 98-based programs smoothly -- according to the Free-PC Web site. The PCs come with a 33,600 bit per second modem to connect to the Internet. Free-PC plans to link to USA Networks Web sites, including Ticketmaster Online-CitySearch Inc., Internet Shopping Network/First Auction and the Home Shopping Network. 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 and information about personal tastes and interests. The information is used to determine which advertisements are displayed, increasing the likelihood that the ads are relevant to consumers, while assuring corporate sponsors that their ads are reaching highly qualified consumers. A demonstration screen on the Free-PC Web site had a range of five or so billboard-like ads arrayed down the right side of a computer desktop window. Free-PC is the latest business to be spun-out of idealab!, which bills itself as an incubator of Internet companies. Since 1996, idealab! has developed more than 20 businesses including CitySearch, an Internet-based local information service that is now owned by USA Networks and GoTo.com, a Web search directory, and eToys, the leading online toy retailer. (Note: this article is ''in progress''; there will likely be an update soon.)