arlier
this year, Plainfield High School in Central Village, Conn.,
signed up for a free computer lab from the ZapMe
Corporation. The highflying company was promising to connect the
nation's schools to the Internet, asking only to deliver
advertising to the students' computer screens to pay the
freight.
Last week, the Plainfield school superintendent
got the bill.
An e-mail message from a company employee explained that
times were tough for ZapMe, which had come under attack as a
tool of commercialization in the schools and had experienced a
drop in its stock to just over $2 from a high of $13.75. As a
result, the superintendent was told, the company was quitting
the free-computer business.
Starting in February, the message explained, "there will be a
fee charged for the service and equipment." It said the school
could go ahead and install the computers, wait until a price
list arrived in November before making a decision, or make
arrangements for ZapMe to pick up the equipment.
"It was
quite a shock," said the superintendent, Mary Conway. Her school
had spent $4,000 to prepare a room for the computers — a lot of
money for Plainfield, which ranks 161st out of the state's 169
school districts in spending. "The board apparently made the
decision that it was worth the risk because we are so poor and
needed the computers. Now we're really in rough
shape."
ZapMe says it has given millions of students
access to the Internet in 2,000 schools nationwide; a total of
15,000 had signed up for the service. At its height last fall,
ZapMe's stock was worth half a billion dollars; the company was
emblematic of the new economy, a place where good deeds, vision
and commerce form a single elegant braid.
Now it has all unraveled: ZapMe says it is refocusing on
selling its technologies for high-speed Internet access and
services via satellite to business. It says, meanwhile, that it
is trying to find ways to keep the school network alive without
forcing the schools to pay.
"We are exploring many opportunities," said the company's
founder and chief executive, Lance Mortensen, "including — but
not limited to — partnerships, the outright sale of the network,
joint ventures and alternative options to schools that would
allow them to keep the labs, which means, obviously, for pay."
The story of ZapMe and schools like Plainfield shows the
ripple effects of the dot-com downturn that extend far beyond
Silicon Valley and Alley. To its founders, ZapMe had a noble
vision defeated by a handful of naysaying activists opposed to
any commercialism in schools and ready to jump to conclusions
about the company's use of data about the students' computer
use. While schools were still eager to sign up, Mr. Mortensen
said, the bad publicity worried potential advertisers "about
having an association of their brand with our brand."
"It's heartbreaking for me," he said. "That opportunity we
gave America's schools was taken away" by "a few people."
To its critics, ZapMe represented a bad idea that collapsed
under its own weight. Gary Ruskin, director of Commercial Alert,
a group affiliated with Ralph Nader that opposes "excessive
commercialism" in society, was involved in a public relations
war that Mr. Mortensen cites as the key factor in his company's
decline. Mr. Ruskin counters that "their business model of
violating the privacy of children and forcing them to watch ads
was a total flop."
Mr. Mortensen insists that he hopes to keep the service free
to the schools through subsidies from business, foundations and
government. "We're looking for people to adopt these schools,"
he said, but noted that ZapMe still had bills to pay. He said
the company was spending about $3,000 a month on each of the
smaller schools it served to pay off the equipment costs —
typically 5 to 15 computers — and supply high-speed Internet
connections.
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