Jesse Berst: The hidden cost of free PCs

There ain't no such thing as a free lunch -- most of the time. Jesse Berst tells you how to get yours.

Tech Director Jon DeKeles invited me out for lunch on Monday -- on his nickel. Once I picked myself up off the floor -- he never offers to buy -- I agreed to go.

But I suspected a hidden cost.

Sure enough, during the meal Jon asked if I'd make a brief presentation to the class he's teaching at a local college. I agreed to do it; he's a friend after all. But the cost of this lunch went from "free" to something of value: My time.

Another lesson RE-learned: There ain't no such thing as a free lunch.

Except when there's an empire at stake. And then you get fed for free for a while. By a company that wants to lock you in so it can charge you for lunch (and breakfast and dinner) for the next 50 years or so.

Several of the Big Boys -- Microsoft, AOL, AT&T -- have joined a growing list of companies giving away something: Net access, "free" PCs, rebates. Associate Editor Neil Strother lists a number of these deals in today's Special Report. Click for more. And now this "free" frenzy has drawn the scrutiny of federal and state authorities who wonder if consumers are getting the full story about long-term Net service contracts.

Why the stampede to lose money? Why the rush to give things away? Because we're at a historical juncture, at a once-in-a-century opportunity to build new brands. Because these companies know that -- if they do it right and they do it soon -- they can create brands that will last for decades. And customer lock-in that will make it possible to extract money from you for many, many years.

Normally you can't create a brand without first knocking off an existing one. Go ahead. Establish a cola in opposition to Coke and Pepsi. I dare you.

But every so often a revolution occurs that doesn't just change the playing field -- it creates an entirely new one. That's what happened at the end of the 19th century, for instance. When the industrial revolution finally jumped the Atlantic, it swept through America. And it created giant new companies that would dominate for decades. Standard Oil. Sears. Coca Cola.

Who's giving away Net-related deals in today's Digital Revolution? Just about everybody:


* Dell

* Microsoft

* Gateway

* Micron

* Qwest

* FreeMac

Who's likely to win? That remains to be seen. But you better have an attractive package to lure consumers with a bargain, or your brand will be toast before you can say: "You've got no customers."

The Digital Revolution is sweeping through our world right now. In its wake, we'll see brands that will dominate for the next half-century. And that's a prize worth fighting for. Even if it means companies have to break the first and foremost rule of American business... and give someone a free lunch.

Just like I'll do next time I need something from Jon. I'll take him out for a "free" lunch, then ask him to rewire my den for high-speed cable access.

What are your thoughts on all this "free" tech stuff? Send a message to the Mailroom.