PC Giveaway Has A Catch
Free-PC Inc. Monday said it will offer consumers a free Compaq personal computer, free Internet access and e-mail if they agree to receive targeted advertising on the desktop.
The company said during a trial of the concept, it will ship 10,000 computers to customers in second quarter of this year. If there's enough demand, the number of free computers could rise to 1 million, the company said.
Ads will be drawn from a collection stored on the hard drive that ships with the PC, allowing interactive ads to be displayed quickly. The advertisement database will be updated when the user is online.
The company said that by using an application questionnaire and tracking which ads the customer clicks on, the company "will be able to deliver to them just the kinds of ads that they will find interesting and helpful."
In addition to asking such information as name, address, sex, marital status and income, the questionnaire asks how the computer will be used, such as for a home-based business, games or electronic mail.
It also asks how many hours per week the computer will be used and whether the customer uses a computer at work. Other information Free-PC wants to know include: what kind of car a user drives, what the user's interests are, and what types of publications the user subscribes to.
Developed by idealab!'s Bill Gross, Free-PC said one of its charter investors is USA Networks Inc., which will invest $10 million.
That company's Internet ventures, including Ticketmaster Online-City Search, will be featured on a Free-PC home page.
"Set-top cable boxes have been free for a long time, and now cell phones are virtually free," said Gross. "This is now possible because of the explosion of e-commerce, and the opportunities for interactivity and targeting that the computer allows. Merchants will pay to reach you, so they essentially will subsidize the cost of the PC," he explained.
Gross said the company will spend $500 on each computer it gives away, but expects to make the money back, and some.
Privacy advocates raised some concerns about the plan.
"They're offering a Faustian bargain here," Evan Hendricks, editor of the newsletter, Privacy Times. "Everyone has to decide for themselves what's more important: a free computer or what people learn about their lives from that computer."
The company's chief executive, Don LaVigne, assures "we won't share anyone's personal information with anyone, period."
However, Beth Givens, director of the Privacy Rights Clearinghouse in San Diego, said keeping one's privacy is difficult.
"You may come down with a serious medical problem and visit chat rooms and Web sites where you seek support," she said. "Do you want that information ever getting into the hands of an insurance company or an employer?"