Copyright 1999 Times Mirror Company
Los Angeles
Times
February 9, 1999, Tuesday, Home Edition
SECTION: Business; Part C; Page 1; Financial Desk
LENGTH: 640 words
HEADLINE: NO
HOLDING BACK AS PUBLIC OPTS FOR PCS OVER PRIVACY;
INTERNET: WEB SITE
IS FLOODED WITH 300,000 VISITORS AFTER OFFER OF FREE COMPUTERS IN EXCHANGE FOR
PERSONAL ONLINE DATA.
BYLINE: KAREN KAPLAN, TIMES STAFF
WRITER
BODY:
Hundreds of thousands of
people flooded the Web site for Free-PC.com Monday to sign up for one of the
first 10,000 computers the Pasadena company said it would give away to people
who are willing to share personal information and receive targeted
advertisements.
The Web site was visited by an estimated 300,000 people
by midafternoon, with nearly all of them filling out the online application for
the fully equipped PCs made by Compaq Computer, said Free-PC.com spokesman Steve
Chadima.
For every person who got through, there were untold others who
tried in vain to connect to the Web site, at http://www.free-pc.com. Chadima
said the company is adding server capacity to its site "as fast as possible."
The demand demonstrates that a large segment of the public is willing to
exchange some of their privacy for a free computer. Free-PC.com founder Bill
Gross said the company needs to collect personal information from its
customers--including what sites they visit on the Internet--so that it can make
enough money from advertising revenues to recoup the cost of the computers and
earn a profit.
Janis Carroll, a shop steward for the Service Employees
International Union in Los Angeles, said she didn't think questions on the
application were particularly intrusive.
"It's just name, address, work
number, home number, how many people live in the house, what is your income,
what are you interested in, what type of magazines do you subscribe to," Carroll
said.
With so many people willing to share so much personal information,
the company dropped its initial plans to make the first 10,000 computers
available on a first-come, first-served basis. Instead Free-PC.com will collect
applications over the next two months and give the first 10,000 PCs to
applicants whose demographic profile most appeals to advertisers.
"Those
10,000 units are going to get passed out to the 10,000 people who are the best
match to what the first advertisers want," Chadima said.
Gross has said
he plans to target low- and middle-income households that can't afford to buy a
computer--although some have questioned whether advertisers are as eager to
reach them as they are to reach people with more disposable income. But
Free-PC.com executives and outside analysts said advertisers would be eager to
reach moderate-income consumers online once they have access to the Internet.
Free-PC.com ultimately plans to give away as many as 1 million
computers, and if the company's business model works, others--such as America
Online--are expected to follow suit.
Since Free-PC hasn't yet announced
its initial advertisers, it is unclear which demographic profiles will be
selected for the first 10,000 PCs.
Some potential customers who were
initially enthusiastic about Free-PC.com said they had second thoughts after
trying--and repeatedly failing--to connect to the company's Web site.
"That's pretty bad for the first day for it to crash like that," said
Ted Reiner, a retired aerospace worker and part-time telemarketer in Chatsworth.
"I thought, 'Wait a minute, is this for real?' "
Others said they were
still skeptical about the privacy ramifications of allowing a company to monitor
their computer use.
Edward Hawthorne, who retired from the Los Angeles
Police Department and lives in View Park, said he was particularly concerned
about whether Free-PC.com could honor its pledge to keep the customer
information it collects to itself. "You never know what company would buy this
company out, and you never know exactly what they would do with that
information," he said.
Gross officially unveiled Free-PC.com at the Demo
99 conference in Indian Wells and announced that USA Networks--a partner in
another Gross-founded company, Ticketmaster Online-CitySearch--has invested $ 10
million in his newest start-up.
LOAD-DATE: February 9,
1999 
