The promise of free PCs for American consumers who agreed to receive advertisements ended on Monday as Free-PC, the firm that created the idea, is to be acquired by low cost systems developer, eMachines.
eMachines said it will continue with Free-PC's philosophy although no hardware giveaways will be on offer. Stephen Drukker, eMachines chief executive, said: "What we are doing is changing the essence of the business from one-shot sales to long-term relationships with customers." The financial terms of the deal were not disclosed.
Essentially eMachines will use Free-PC's technology to help it send advertising to users. The company said that 43 per cent of its customers were first time buyers and therefore an attractive audience for advertisers as they have not yet established their Internet preferences.
Free-PC failed to sell enough advertising to justify giving away the hardware and Internet service despite numbering 70 advertisers and securing more than $30 million in venture capital funding.
Founded in late 1998, eMachines quickly became the third biggest PC manufacturer to sell products in retail outlets. It was sued by Apple for allegedly copying the iMac design, and is suing Compaq, claiming the Texas giant is trying to block its fast growth in the US.
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