Students Cash In On iPod Giveaway

You sign on to a website and agree to a free trial offer from a company. You find five friends to do the same. As soon as the fifth friend keys in, your free iPod is on its way to you in the mail.

Sounds too good to be true, but it’s not.

Since June, Harvard students have been among the 200,000 people visiting freeipods.com every day, on their way to getting one of the $300 digital music players for free. According to Peter Martin, co-founder of the company that started freeipods.com, Gratis Internet, the company has sent out over 6,500 ipods. In the 02138 zip code alone, Martin estimated that several thousand customers have signed up.

At the website, you can choose among a free iPod, iPod mini or $250 iTunes gift certificate. In return, all you have to do is sign up for one of several marketing offers from companies like Blockbuster or Citigroup credit cards.

Yet even some students who have received their free iPods view the offer as some sort of a scam.

“It’s a pyramid marketing scheme and some of the online offers are much more fraudulent than others,” said Rachel A. Culley ’07, who started the process two months ago and just recently received her ipod.

The website has a variety of “free” offers you can choose from—some from recognizable companies like Blockbuster, others for virus protection software and botox. While many feature free trial periods, you must cancel before automatically being charged.

Some Harvard students who tried the site were skeptical at first, but their skepticism faded as their new gadgets arrived.

“When I saw it I thought it was a hoax at first,” said Le Zhang ’07, “but I checked it out and assessed the risk, and it seemed pretty legitimate.”

Others heard about it through the recommendations of friends and decided to give it a try. The Freshman Outdoor Program summer staff even decided to try the offer as a group, according to Margaret C.D. Barusch ’06.

Wei-Jen Yuan ’06 heard about the offer through his brother, who told him that all his friends had received one, and he even knew of someone who had received two by completing the offer twice.

But several students say the website isn’t for everyone, citing the time and effort in finding people to sign up.

“It took me about a month and a half to get my ipod. [The company] is banking on skepticism, hoping you’ll start an offer, but won’t finish and complete the terms,” said Zhang.

Martin, the co-founder of Gratis Internet, said concerns about the site being a pyramid scheme were unfounded.

“It indicates how skeptical people are,” Martin said. He called the system an “online customer acquisition process,” and said it provides companies with potential consumers.

“The customer is only a click away from their product,” Martin said.

So how is the company able to make money giving away free ipods? According to Martin, for each person who signs up for a trial offer, Gratis Internet receives a “bounty” that usually ranges between $40 to 60. “That covers the cost of the ipod, the overhead, and the profit,” Martin said.

Martin said the business model is similar to that of credit card companies who try to sign people up by handing out incentives that are usually “pretty crappy.”

Martin said his company is “taking this concept...to the next level by offering premium product.”

“The customer is only a click away from their product,” Martin said.