CueCat and corporate cluelessness

Why CueCat's makers need to catch a clue.

Just when you think the money truck has stopped making its rounds -- that just any bunch of idiots can't get funded anymore -- here comes Digital:Convergence Corp., proving that small-timers with small ideas can still convince fools to part with their money.

And a lot of it -- news reports say the company has raised $100 million from people who ought to be smarter than they are but don't seem to be. I'm talking NBC, Young & Rubicam and Coca-Cola, so perhaps I am expecting too high an IQ, but $100 million is still a lot of money for a company that's yet to have a truly creative idea.

Digital:Convergence -- in case you've missed the howls of protest and the hilarious hacking incident -- is the Dallas company that brings us the CueCat, a little barcode scanner that links magazine ads to Web sites. What a concept -- I read all my magazines while sitting at the computer! And those barcodes in the new RadioShack catalog are so ... well, trashy-looking!

But aesthetics isn't its biggest problem.

You'd think that by now any company doing anything that might get close to privacy concerns would have the details all worked out in advance. But Digital:Convergence seems genuinely shocked -- if the media quotes are any indication -- that people would be concerned. The company's "trust us" attitude would be charming if it didn't seem to cover a much deeper misunderstanding.

Since Radio Shack and Wired and Forbes magazines started distributing the little scanners -- described as looking like a "marital aid" by some readers of my earlier column on this company -- Digital:Convergence seems to have been surprised that people started disassembling the devices and making them work in new ways.

A wave of cease-and-desist orders seems to have sent most of that activity underground. One thing hackers learned to do was shut off the scanner ID that is reported to Digital:Convergence with every swipe of a barcode.

Privacy advocates -- in another move that seems to have caught the company off guard -- have gone apoplectic over the company's ability to use these IDs and other information it gathers from users to build detailed profiles of their ad-swiping habits. That would be bad enough, but since the company wants users to start swiping books, consumer goods and other bar-coded items, the data-collection potential is considerable.

The company says it has no plans to do any such thing -- but why did it build the capability into the system in the first place? Wouldn't it be better not to have the built-in temptation? We're already seeing how troubled dot-coms have been willing to sell their customer information to raise a few bucks.

And there's Digital:Convergence having to send out $10 RadioShack gift certificates as an apology after the company's database apparently was hacked, perhaps leaking customer information to God-only-knows-who. So this is the kind of company we're supposed to trust with our personal shopping habits in return for the ability to scan magazine barcodes?

Here's what I want you to do: Run down to RadioShack and look really excited when you ask for one of the scanners. Go to lots of RadioShacks and do this. When you are done, disable the devices by cutting the cords and dump them into the trash so as to keep someone else from ending up with one by mistake. Gather the ones the magazines are sending out from your friends and trash them, too.

This company is just too idiotic to make someone rich. And together we can keep it from happening. Let's make Digital:Convergence understand that not considering privacy can really kill a business.

ZDNet News commentator David Coursey is based in Silicon Valley and has covered personal computers, software and the Internet for more than 20 years. He is an industry analyst and creator of several industry conference events. His Web site is www.coursey.com.