ZapMe! (1996 - 2001)

1996 - 2001

dead us

a california company that handed american schools a free computer lab and a satellite connection, and took the corner of every screen as payment. by late 2000 it had 25,000 machines in 2,300 schools with around two million students sitting in front of the advertising panel. the campaign against selling to a captive audience of minors made the whole thing politically expensive at exactly the moment the deployment was burning $20 million a quarter. gilat bought control in january 2001, the company renamed itself rstar, and the free service ended in february.

» see zapme.com as it lived, on the wayback machine

~ the eulogy ~

i wasnt close to this part of the story, still. in those days. American public schools in the late nineties had a computer problem that was mostly a budget problem.

a company in California offered to make it go away. to be honest. but still, turkish state schools at that same moment did not have a lab for anybody to advertise into. but yeah, the entire ZapMe proposition needed a building full of teenagers with a screen each, which is a thing you have to already own before someone can sell it back to you.

this is mostly told from the outside, zapMe! Corporation launched in 1996 outta San Ramon, run by Lance Mortensen, who had made his money in pasta before this. anyway. anyway, what a school got was a computer lab with a satellite dish on the roof and a connection that cost the district nothing to run. though, what the school gave back was screen space. Students browsed through ZapMe's own software, which kept a permanent panel of advertising in the corner of every page. the company sold that panel.

It moved fast. really though, over roughly three years ZapMe put 25,000 computers into about 2,000 schools. by the end of the third quarter of 2000 the network reached 2,300 schools across 45 states and something close to two million students. for whatever reason. Dell put money in, so did Sylvan Ventures, the investment arm of a tutoring company. in fairness, the stock touched $12.50 in november 1999 and was at 96 cents twelve months later.

this happened more in the english speaking internet than where i was, the opposition was organized and it worked. Commercial Alert called the company a corporate predator in 1998. in those days. junkbusters pushed the same argument from a different side: an audience of minors, required by law to be in that room, looking at advertising nobody had asked them about. more or less. What alarmed people more was the data, because the software also collected information on the children using it. Legislators started asking whether any of it should be permitted at all.

~ the dossier ~

Born	1996 in San Ramon, California
Peak	25,000 computers in about 2,300 schools across 45 states
Killed	february 2001, free service to schools ended
Lifespan	four years of installations
Made by	Lance Mortensen
Killed by	$20 million a quarter against a public fight over advertising to children

~ how it landed ~

i saw this from a distance, mostly. For a school with no money the deal was hard to refuse and hard to read properly. more or less. Districts spent their own funds on wiring and on preparing rooms for equipment that had been described to them as free, which is how a gift ends up on a budget line.

this part you had to be in the US for, and i pretty much was not. anyway. honestly, zapMe was running at about $20 million a quarter to deploy and maintain that network, a figure the company put in its own SEC filing in october 2000. by then. No version of the advertising business covered it. more or less. The investors could see the political risk arriving at roughly the same speed as the bills.

~ the funny part ~

this part i actually was not really around for, but anyway. Having given the computers away, the company asked for them back. Schools were told in late 2000 that they could pay for the equipment by february or return it. Districts that had already installed everything, some of them thousands of dollars deep in preparing the room, were left choosing between an invoice they had never budgeted for and an empty lab with cable running to nothing.

i wasnt close to this part of the story, still. About a thousand more schools had signed up and were still waiting for hardware when installations stopped (name escapes me). Those ones got nothing at all.

~ the day it died ~

this is mostly told from the outside. anyway. Gilat Satellite Networks, the Israeli company whose Spacenet subsidiary had been carrying ZapMe's traffic the whole time, offered around $50 million for 51 percent of the stock in late '00 and took control on 11 january '01 (close enough). look, what Gilat wanted was the browser technology and the network underneath, for selling private communications networks to businesses.

i was not paying attention by then. for whatever reason. anyway, the company renamed itself rStar and left education (if memory serves). The free service to schools ended in february 2001, four years after the first lab went in. but yeah, mortensen's public reasoning was that continuing was too risky for shareholders with legislators circling the advertising model, which is an honest answer and also the entire critique: the schools were never the customer.

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