Sculley-backed startup offers new twist

Former Apple exec's new Internet marketing company mixes the concepts of viral marketing and real-time broadcasting

John Sculley says he hasn't seen a technology this promising since Steve Jobs showed him a Macintosh computer almost 20 years ago. But as an investor and chairman of a startup called Gizmoz, Sculley's optimism isn't all that surprising.

Gizmoz, which was founded in Tel Aviv by a 20-something named Eyal Gever, has developed what it says is a breakthrough in Internet marketing, advertising and information distribution. It's called ViralCasting Networks, and it mixes the concepts of viral marketing and real-time broadcasting.

The company gives content providers, retailers and advertisers a way to develop private distribution networks that target interested customers and users. Once a user has received a Gizmo "container", he or she can pass it along to others with similar interests. For example, a Gizmo might contain streaming video of a sporting event to entice users to buy tickets, or streaming audio of a new song by a favourite artist. The container can distribute 2D and 3D animation, streaming audio and video, as well as photos.

To activate a Gizmo, users click on an icon that contains a small Java applet. There are no attachments or tools to download. The company envisions that users will collect Gizmos on their desktops or copy them to Web sites. Since it operates in real time, updates are automatically reflected in every Gizmo, regardless of where they're stored.

At first blush, Gizmos seems like a reincarnation of the failed "push" technology. But Sculley, the former chief executive of Apple, said the interactive, streaming and private nature of a Gizmo makes it different from push. "The content always resides back on the [content provider's] network, not on the PC," he said, adding that Gizmos are not "intrusive" like push content. Users receive only information that they request.

Gizmoz is making its debut as Internet marketing tactics from companies like Doubleclick are coming under fire from privacy advocates. Consumers are becoming increasingly aware that their movements on the Net can be tracked and that some companies swap or sell their private information to other marketers. Both Sculley and Gever said there is no cause for concern with the Gizmoz approach. "It's not about cookies," Sculley said. "We're not [installing] anything on your hard drive. We don't collect IP addresses." "This is a way for companies to communicate and distribute information to their customers," Gever said.

Initial content providers will be from the pop culture arena, such as music and entertainment. Gizmoz would not disclose the names of the few customers it has already signed on, but the private investment firm Sculley Brothers' Web site lists MTV, MP3, Flooz, the National Basketball Association and Major League Baseball as partners.

To be sure, the company is using Sculley's celebrity as a means to score deals with big content providers. Sculley, who acts in a non-executive role, has participated in many sales calls with other Gizmoz officials.

The company has raised about $14m (£8.6m) in funding from Sculley Brothers, Chase Equity Associates, AOL Investments, Polaris Venture Capital, Giza GE Venture Fund and 1-800 Flowers.com. Plans call for the company to eventually go public.

Gizmoz is just one of several small companies looking to make Web-based communications more efficient, particularly between companies and their customers. Gever said its concept of delivering real-time, media-rich content can be applied to a business-to-business environment. Others already in that space include Akamai Technologies, Sandpiper Networks and Digital Island. The latter two merged in December.

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