Thank you to everyone for the hundreds of emails I have received over the past few days. I know many of you are avid Microworkz.com watchers and happy customers (and yes there were thousands of happy customers) and I am happy to write about what happened and why it happened. Let's start today with the biggest issue most of you have raised: The Business Model
While some have called the "free pc" revolution a fantastic pyramid, it was in fact the same business model used by many companies in many different business very successfully since the early days of marketing. Subsidizing, or losing money, on specialized hardware used to then sell a monthly-fee based service is nothing I invented: Cell phones, XBOX's, Cable boxes, TIVO's, IPOD's and a host of other consumer electronics are sold well below their cost in order to "hook" the consumer in and get them to buy services on the subscription model. Microworkz's business model was completely sound; it made economic sense then and today because revenue was earned in a myriad of other ways from a host of companies. As an example of what I mean, take a look at this article about what Dell is doing today:
http://news.com.com/Dell+embraces+Google/2100-1032_3-6077051.html
We had these kinds of deals with major banks, Amazon, Internet providers like Earthlink and AT&T and others. The net result was an enormeous profit on each machine delivered and enabled. Now that was a very different issue, the real problem at Microworkz was production, building a company and dealing with the media all at one time. Here's one of my favorite articles of late... xBox looks a lot like an iToaster doesn't it?
http://businessweek.com/technology/content/nov2005/tc20051122_410710.htm
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