AOL, Prodigy Offering Free PCs
Jul. 01, 1999
NEW YORK (AP) _ America Online Inc. and Prodigy Communications Corp., two major providers of Internet access, have joined an industry push to offer consumers free personal computers if they agree to sign up for online service.
While smaller companies started giving away PCs last year, AOL and Prodigy are the biggest examples yet of how the plunging price of computers is fast making them into just a delivery mechanism for services and software.
AOL said it would give a $400 rebate on selected eMachines Inc. computers to people who agree to subscribe to its $21.95-a-month CompuServe Internet access for three years. The lowest-price eMachines computer is $399, in effect making it free, but the monitor isn't included. The deal also applies to all computers bought at the Circuit City retail chain.
Today, Prodigy announced a similar three-year deal for computers bought at Best Buy consumer electronics stores. Its Internet access costs $19.95 a month.
The deal is expected to help AOL finally bolster the subscriber base of its CompuServe service, which has only 2 million subscribers compared to its flagship AOL service, with 17 million subscribers. It is intended to reach out the millions of Americans who haven't yet bought PCs.
But the arrangement may not be as attractive as it seems. In the Internet industry, three years is an extremely long time to lock into a contract for online service, and new bargains are springing up all the time.