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ATPM 5.10
October 1999

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Interview

Chuck Fox, FreeMac

America is the land of opportunities, even if the only opportunity is to get a computer for less. On the PC side, there has been a recent movement to the “free PC.” The idea is to get a cheap PC to the consumer at little or no cost and then to regain that investment by generating a future income stream based on fixed Internet access fees, personalized advertisement and future e-commerce commissions. Most computers offered under this plan have been last year’s technology though. Now a new company called “FreeMac” is trying to bring this concept to the Macintosh and to break the rules by offering an unprecedented value for “free.” Is it too good to be true? That remains to be seen. ATPM's interviews manager Storm Russell talked with Chuck Fox, Business Development Officer with FreeMac.com on August 30, 1999 and updated the information with him on September 26, 1999. Chuck has been working primarily with the financial efforts of FreeMac.

•••

ATPM: How do things currently work with the FreeMac?

CF: The night before the FreeMac site goes live everyone who has signed up at our current site will be sent a notice that the site will be going live within the next 24 hours. Once the site goes live anyone will be able to sign up to receive a free iMac.

ATPM: How many iMacs will you give away?

CF: We’ll be giving away 10,000 between now and the end of the year, and scaling up to a total of one million iMacs over two years.

ATPM: How do people get a free iMac?

CF: The iMacs will be given away on a first-come, first-serve basis to people who meet certain demographic requirements.

ATPM: And what are those requirements?

CF: The requirements are that they must qualify for an iMac branded credit card which will be issued by First USA VISA, and they will sign a 3 year contract with Earthlink for Internet service.

ATPM: We understand that FreeMac has just announced that 1960’s pop artist Peter Max will be your spokesperson. What can you tell us about that?

CF: Yes, Peter Max has been signed on as our Chief Creativity Officer. Peter will function as a spokesperson for FreeMac.com. He will also lend his creativity and his presence to the company’s business activities through painting a limited series of ten Apple iMac computers. As part of the FreeMac.com launch, these one-of-a-kind Collector’s Editions will be auctioned through a major online auction venue such as eBay or Amazon.com, with all proceeds going to the National Multiple Sclerosis Society. Peter will also design a series of 12 posters, and will participate in FreeMac.com video news releases as well as trade show and press events.

ATPM: How can you get one of those posters?

CF: The posters will be available exclusively through FreeMac.com. Every person who submits a completed demographic profile at the FreeMac.com Web site will receive a free poster. A different poster will be offered each month.

ATPM: Besides Peter Max and the other companies we’ve mentioned, who else is FreeMac working with?

CF: Besides Earthlink and First USA, we have entered into an agreement with Cybercash to provide each member of the FreeMac community with a co-branded FreeMac/First USA InstaBuy e-wallet. This e-wallet will instantly enable one-click shopping at FreeMacStore.com as well as at thousands of e-commerce sites within the InstaBuy network of merchants, including Borders, Virtual Vineyards, and others. We have also just entered into an agreement, of which details will soon be announced, with one of the world’s largest Internet portals to provide FreeMac.com with branded content and search capabilities.

ATPM: Is Apple involved with this, did FreeMac contact them?

CF: Apple is not directly involved, although they have taken a very strong interest in FreeMac.

ATPM: What is FreeMac trying to achieve with the giving away of a free iMac?

CF: Well, our goal I guess you would say is threefold.

ATPM: What do you mean?

CF: Our goal is to provide a free Apple iMac computer to qualified online users in order to:

  1. Build a network of over one million consumer households for a variety of marketing partners including credit card companies, banks, and Internet service providers;
  2. Deliver a highly qualified, highly participatory online community to our advertisers and e-commerce partners by means of permission marketing, and;
  3. Build a branded online community that delivers the very best Internet experience to its members and participants.

ATPM: What do you mean by “community”?

CF: That community will include many interesting aspects. All of our members will have a FreeMac Personalized Start Page which can be customized by the end-user to reflect their particular content interests. We will also have the FreeMacStore. This is an e-commerce site where members of the FreeMac community will be able to purchase all of the software and peripheral devices for their iMac along with portable computers and other Apple products. The community’s virtual town center will be ClubFreeMac.com. ClubFreeMac is envisioned to become the preferred congregation place for online members by providing a wide variety of content and commerce tied to the interests of its community.

Basically, we see the FreeMac community as central to our business model and want to deliver the highest quality content, products, and services we can to satisfy the real needs of our community By doing this, FreeMac.com will become the starting point and destination point of its members.

ATPM: What will keep customers from getting a “cheap” iMac for $718.28 (the cumulative cost of the deal FreeMac is offering) in three years without actually using the Internet access and the credit card? Even if customers use it, what will guarantee that they will become part of the “community”?

CF: Once again we need to reiterate our commitment to building an online community which delivers the highest quality Internet experience possible. This will be achieved through branded content, commerce and tools designed to turn community members into community participants.

ATPM: Where will FreeMac get the computers from?

CF: We are currently in talks with two of the largest distributors of the Apple iMac, and are negotiating the best price and terms possible.

ATPM:How will FreeMac be profitable if their income is so much below the price for which they will presumably get the iMacs?

CF: FreeMac has developed a very diverse revenue model, and as stated earlier, we are negotiating very beneficial price and lease terms for the iMacs.

ATPM: What is FreeMac’s prior experience with the Mac, online communities, and free computers?

CF: Jonathan Strum, our CEO has extensive knowledge in the development of “communities,” along with a background of over 20 years experience in the tech and retailing sectors.

ATPM: How well is FreeMac backed by investors presently?

CF: We have completed our seed financing and are currently finalizing our first round financing, with negotiation beginning with second round financiers.

ATPM: Would you say that response so far has been good?

CF: Yes, as of last week, we had about 500,000 responses. That was for about a 10 day period.

ATPM: Can people still sign up to be contacted by FreeMac?

CF: Yes. People can sign up for notification about when the FreeMac site will go live at our current site: http://www.freemac.com.

ATPM: Finally, when will the FreeMac site go live for the actual sign ups?

CF: Our site should be live for the actual sign-ups sometime between late this week and the early part of next week.

ATPM: Thanks Chuck for all the information. We hope it’s a great success.

Send your e-mail to editor@atpm.com. All mail becomes the property of ATPM.apple

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