The giveaway model is not new. Telecommunications companies have been giving away certain models of cellular phones in order to provide lucrative wireless service contracts. Cable operators also tend to provide set-top boxes at no charge. Free-PC customers will provide detailed information about themselves, including their age, income, and family status, along with information about personal tastes and interests. This data will then be used to target ads at particular users.
Advertisers are willing to pay a lot for targeted consumer.
Ads will appear in a frame that surrounds the working area of a high-resolution screen. The ads are drawn from a collection stored on the hard drive that ships with the PC, allowing rich media and interactive ads to be displayed instantly without the delay associated with downloading Internet ads. The advertisement database stored on the PC will be updated periodically in the background when the user is online. The company said there will be contractual terms that demand that the user not tamper with the advertising information on the hard drive, including safeguards to prevent them from erasing that information. We are still working on that and hope to have it resolved by the time we ship.