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Sculley Backed Startup Offers New Twist

John Sculley says he hasn't seen a technology this promising since Steve Jobs showed him a Macintosh computer almost 20 years ago.

But as an investor in and chairman of a startup called Gizmoz Inc., Sculley's optimism isn't all that surprising.

The company, founded in Tel Aviv, Israel, by a twenty-something named Eyal Gever, has developed what it says is a breakthrough in Internet marketing, advertising and information distribution. It's called ViralCasting Networks, and it mixes the concepts of viral marketing and real-time broadcasting.

Gizmoz gives content providers, retailers and advertisers a way to develop private distribution networks that target interested customers and users. Once a user has received a Gizmo "container," he or she can pass it along to others with similar interests.

A Gizmo might contain, for example, streaming video of a sporting event to entice users to buy tickets or streaming audio of a new song by a favorite artist. The container can distribute 2D and 3D animation, streaming audio and video, and photos.

To activate a Gizmo, users click on an icon that contains a small Java applet. There are no attachments or tools to download. The company envisions that users will collect Gizmos on their desktops or copy them to Web sites. Since it operates in real time, updates are automatically reflected in every Gizmo regardless of where they are stored.

Don't call it 'push'

At first blush, Gizmoz seems like a reincarnation of the failed "push" technology. But Sculley, the former CEO of Apple Computer Inc., said the interactive, streaming and private nature of a Gizmo makes it different from push.

"The content always resides back on the [content provider's] network, not on the PC," he said, adding that Gizmos are not "intrusive" like push content. Users receive only information that they request.

Gizmoz is making its debut as Internet marketing tactics from companies like Doubleclick Inc. are coming under fire from privacy advocates. Consumers are becoming increasingly aware that their movements on the Net can be tracked and that some companies swap or sell their private information to other marketers.

Both Sculley and Gever said there is no cause for concern with the Gizmoz approach.

"It's not about cookies," Sculley said. "We're not [installing] anything on your hard drive. We don't collect IP addresses."

"This is a way for companies to communicate and distribute information to their customers," Gever said.

From pop culture to B2B?

Initial content providers will be from the pop culture arena, such as music and entertainment.

Gizmoz would not disclose the names of the few customers it has already signed on, but the private investment firm Sculley Brothers' Web site lists MTV, MP3, Flooz, the National Basketball Association and Major League Baseball as partners.

To be sure, the company is using Sculley's celebrity as a means to score deals with big content providers. Sculley, who acts in a non-executive role, has participated in many sales calls with other Gizmoz officials.

The company has raised about $14 million in funding from Sculley Brothers, Chase Equity Associates, AOL Investments, Polaris Venture Capital, Giza GE Venture Fund and 1-800 Flowers.com. Plans call for the company to eventually go public.

Sculley has been in the investment business with his two brothers since 1995. His company, which has about 25 equity investments, focuses on early-stage companies. The Sculley portfolio includes investments in Buy.com, More.com and Peoplepc.com

Gizmoz is just one of several small companies looking to make Web-based communications more efficient, particularly between companies and their customers.

Gever said its concept of delivering real-time, media-rich content can be applied to a business-to-business environment.

Others already in that space include Akamai Technologies Inc., Sandpiper Networks Inc. and Digital Island Inc. The latter two merged in December.

Gizmos can be reached at www.GizmozNetworks.com.


Lisa DiCarlo, March 13, 2000, PC Week

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