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COMPUTING

From...
Industry Standard

How much should you pay for a free PC?

April 14, 1999
Web posted at: 1:39 p.m. EDT (1739 GMT)

by Jason K. Krause

(IDG) -- Free has become a popular price point for personal computer vendors. A growing group of companies offers free or cheap computers with Net access – but there's a catch. "The 'free' part is just a marketing spin," admits Dennis Cline, CEO of free-PC vendor DirectWeb in Mt. Laurel, N.J. Most of these companies have their hopes on e-commerce, although they haven't yet figured out how to generate revenue from cheap PCs. Look for hidden ploys: there's no such thing as a free lunch, or a free computer.

COMPANY BUSINESS MODEL THE CATCH
DirectWeb No cost for the PC, if you pay an ISP fee. DirectWeb charges between $19.99 and $49.99 a month for ISP access. DirectWeb wants to use the PCs to generate e-commerce revenue and keep customers tied to the company's front page. It has set aside hard-drive space for rich-media ad content.
Free PC A free PC with Internet access by ISP NetZero. You get a fast machine and Internet access for free, as long as you endure intrusive advertising and provide personal data.
Gateway Free Internet access with a $1,000 PC. "Free" covers the first 150 hours per month. After that, it's $1.50 an hour.
Gobi Gobi charges $25.99 a month for a PC and Internet access, and upgrades the PC after three years. Wants to generate e-commerce revenue, but has no model yet. Look out for hidden e-commerce ploys.
Microworkz Not quite free, but outrageously cheap: one year of free Internet access with a $299 machine. The company admits it can't make a profit at this price point, so watch out for the old bait-and-switch.
NuAuction Will give away 12,000 PCs at random. This one's a pure sales gimmick. According to the company, the odds of winning are 3,000 to 1.
One Stop Free iMac, as long as you buy $100 of merchandise a month. Represents a $3,600 outlay for a computer valued at $999.
PC Free $39.99 per month for a PC and Net access. Every computer's homepage will be locked on Compaq's AltaVista portal site and a permanent desktop icon will link directly to Compaq's Shopping.com online mall.


RELATED STORIES:
Can you afford a $50 PC?
March 17, 1999
Free PCs, but not a free lunch
February 10, 1999
Computer giveaway lures 500,000 people
February 15, 1999

RELATED IDG.net STORIES:
PC giveaway aims to deliver ad audience
(Computerworld)
Microsoft site to give away free PCs to mortgage customers
(Computerworld)
PC giveaway lures 500,000 applicants
(Computerworld)
Can you afford a $50 PC?
(PC World)
Two more 'free' PC firms pin hopes on e-commerce
(PC World)

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RELATED SITES:
Compaq Computer Corp.
Shopping.com

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