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10,000 free PCs...and the catch?

Bill Gross wants to give you a PC...For a price, of course.
Written by Maria Seminerio, Contributor

Gross, head of start-up Free-PC.com, announced it will give away 10,000, sub-$1,000 Compaq Presario computers and throw in free Internet access for users who match a certain demographic profile.

That is, if you don't mind being fed a constant stream of advertising. Or the continual monitoring of your Internet use for marketing purposes. Users must agree to use the PCs at least 10 hours per month and to view advertisements that will be displayed constantly down the right side of the 15-inch screen, whether they are connected to the Internet or not.

Free-PC.com will monitor how the computers are used, including tracking which ads users respond to and what products they buy online. Gross, founder of investment firm Idealab, said in a statement that the PCs will go to the first 10,000 people registering on the Free-PC.com site whose age, household income, hobbies, and other consumer data make them "of interest to our initial advertisers."

The site was difficult to access this morning, apparently bogged down by many free PC wannabes. Idealab officials insist the marketing information collected from users will be kept separate from their actual identities. But they say the demographic profiles that will emerge from the program will help make advertising more efficient. Company officials believe the concept makes sense because as PC prices continue to plummet, the hardware is actually less valuable than access to certain consumer demographics, even if those consumers are never identified by name.

"Free-PC is the breakthrough first product to start an inevitable trend," Gross said in a statement. "Merchants will pay to reach you, so they essentially will subsidise the cost of the PC, indirectly. We believe in the long term this model will provide cost savings to a full range of PC offerings through both retail and direct channels."

"All information will be held in strict confidence by Free-PC," company CEO Donald LaVigne said in a statement. "No personal information will ever be revealed to advertisers, and the company promises to never sell or give away consumer data to any third party."

The PCs are expected to ship in the second quarter of this year, and they will come with a 333MHz processor, a 4GB hard drive, 32MB of RAM, a 56Kbps modem and the Windows 98 operating system. Free-PC.com said it has received $10 million (£6 million) in funding from USA Networks the parent company of Ticketmaster Online and the Home Shopping Network, to get the program rolling.

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