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Gobi Jumps Into 'Free' PC Arena

Technology

April 01, 1999|JOSEPH MENN | TIMES STAFF WRITER

SAN FRANCISCO — Gobi Inc. became the latest in a rapid-fire series of start-ups with a new angle on how to profit by getting personal computers to consumers for free or next to nothing.

The New York-based company said it will ship as many as 1 million Intel Celeron chip-based PCs with Internet hookups to consumers who will pay $25.99 monthly over three years. It hopes to get most of its money back through sponsorships of links at its default home page.

Gobi follows in the footsteps of Antrim, N.H.-based start-up PC Free, which last week said it is trying to negotiate for as many as 1 million Compaq PCs that it would lease to consumers at $40 a month, also including Net access. That company hopes to get a break on Compaq prices in exchange for desktop icons and other pitches to consumers. But the two sides said they have no deal yet.

"There are too many confusing choices out there for consumers," said Gobi CEO Ganesh Ramakrishnan. "We thought there must be a simpler way to do it."

Gobi's plan would allow consumers to cancel the contract but keep the PC for $699 the first year and less in the following years. This week, Gobi began filling more than 300 orders from a test market in Toledo, Ohio.

Ramakrishnan said Gobi won't lose its shirt because it is also financing its purchase of the computers, from well-regarded manufacturer Solectron, and has a volume discount there. Although the company will lose a little money there, it plans to make that back by renting out real estate on consumers' Web home pages, which will become more valuable as more people sign up.

It may also get a cut of some regular Internet purchases that its customers make after they start surfing from the Gobi page.

The recent flurry of free-PC pitches also includes one this week from NuAuction.com, which is offering a chance--but only a chance--at one of 12,000 computers from a pool of what it hopes will be 100,000 applicants. The only catch is that the would-be winners have to register to be notified of its online auctions.

The expense to NuAuction might work out to as little as 50 cents per registered pair of eyeballs, said company President Ken Kapur.

NuAuction's approach follows that of Pasadena-based Free-PC, which was overwhelmed by more than half a million people who said they were willing to live with a strip of targeted ads permanently affixed to their computer desktop and to provide detailed personal information to get one of 10,000 free Compaqs.

All of the gimmicks are an outgrowth of the falling price of computers, which can now be had for less than $600.

Look for even more of the same as parts of the computer business morphs into something similar to cellular phones or cable service.

"We have all sorts of potential competitors," Gobi's Ramakrishnan said.

By the end of the day, PC Free Chief Executive David Booth said he wouldn't go quietly, suggesting that $25.99 isn't as low as he can go in order to get captive Web audiences.

"We could give it away for free," Booth said. "And there's some models where we may."

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