Digital Junk Pile

The demise of many dot-coms has left a trail of useless gadgets

October 22, 2001|By Karen Kaplan | Karen Kaplan,SPECIAL TO THE SUN

For Jeanne Miller, the Internet revolution was crystallized in a wondrous device called SportBrain - a $99 clip-on unit that measured her physical activity throughout the day and relayed the information to a personalized Web site.

"Everywhere I turned, people were touting SportBrain," said Miller, a Seattle marketing executive. "Oprah had it, of all people!"

She saw the gadget as high technology's ultimate gift to fitness and was immediately addicted - for all of four months. In July, the company went out of business, rendering Miller's and 40,000 other SportBrains useless.

"It's not like $100 is the end of the world, but if I had known in advance that it would only work for four months, I wouldn't have paid that," she said. "There's more than one way of investing your money in high tech and losing it. You can invest in the stock, or you can buy their product."

Along with mountains of worthless stock certificates and heaps of pink slips, the 18-month-long high-tech meltdown has left behind a growing pile of dot-com junk. Included in the debris are expensive wireless modems that worked only with a now-defunct service, hand-held gadgets that could display entertainment listings only from another vanished company, and untold dollars worth of Internet currencies that no longer have the power to buy anything.

The accumulation has unleashed a wave of consumer frustration rivaled only by the ire of the now-jobless thousands who actually worked for those companies.

"I cannot tell you how sick I was," said Linda Pratt, an Ohio real estate investor who ran up a $6,100 bill with CyberRebate.com. The company had promised to eventually rebate as much as 100 percent of the price of anything bought through its Web site. But Pratt didn't get her rebates. The company went belly-up in May.

"I felt I would throw up," she said. "I was shaking. I didn't even tell my husband for four days. It was the stupidest thing I've ever done in my life."

Edgar Dworsky, founder of an online consumer resource guide called Consumer World, noted that "historically, it has been only the venture capitalists and stockholders who lose money" in high-technology companies. "Now, more and more individual consumers are suffering financial losses when a dot-com goes bust."

The flakiness of some online ventures seems obvious now. But the early buzz about the Internet was so hot that any business that was online appeared to have boundless possibilities.

Few predicted that the dot-com frenzy would end so abruptly.

When prices for tech stocks began their precipitous decline 18 months ago, it took only a few more months for some companies to burn through whatever cash they had left.

Many closed shop with little or no warning, leaving consumers fuming about how the tech revolution was turning out.

And Pratt is still smarting from her experience with CyberRebate.

The idea behind the company seemed odd at first. Its prices were wildly inflated - $33 for a plain toothbrush, $77 for a set of toy racing cars, $60 for a bunch of Lincoln Logs that usually sold for $10.

But CyberRebate had a gimmick that was tough to resist. The company offered rebates for as much as 100 percent of the purchase prices, banking on that a small percentage of shoppers would never bother to collect all the paperwork necessary for a reimbursement.

In March, the company was the seventh most popular e-commerce site on the Internet, drawing 5.6 million visitors, according to Jupiter Media Metrix.

Pratt didn't put her trust in CyberRebate right away. For five months, she quizzed friends and family members who bought items on the site, checking to make sure the rebate checks arrived as promised.

She read everything she could about the company and discovered that the New York attorney general investigated CyberRebate and allowed it to stay in business.

Finally, she got tired of sitting on the sidelines. In less than a week, she ran up a $6,100 bill on a mini-refrigerator, a wooden salad bowl, several stuffed animals and other assorted merchandise.

Shortly before her refund checks were due to arrive in late May, the company went out of business. It left several million dollars worth of rebates unpaid, according to a group of stiffed consumers called the CyberRebate Recovery Alliance.

"I got sucked into this because it was free," Pratt said. "I had no idea that my money was at risk."

In New Brighton, Pa., Kim Tkacik spent countless hours - as many as three hours a day - collecting an online currency called Flooz by surfing Web sites such as CBS SportsLine. During nearly two years, she earned more than $400 worth of Flooz, some of which she used to buy books and videos for her kids and a new computer monitor for herself. Tkacik was such a fan of the stuff that she devoted several hours a day to maintaining the FloozNooz Web site to help others earn Flooz.

So when she got word that the company was shutting down, she hit the ceiling.

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