From...

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.