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By editorial@silicon.com, 13 November 1998 00:10

NEWS Internet users are to be paid to view online ads, under a pilot scheme being run by Compaq. The company is reviving MilliCent, the electronic payment system it inherited when it bought Digital earlier this year. The technology was unveiled early last year by Digital, but never made it into a final product. Under the scheme, surfers receive a 'micropayment' of electronic cash from participating Web publishers each time they click on an online advert. This accumulates in a digital purse which can be downloaded free from the Compaq Web site, and can be spent at selected ecommerce stores. Users can also choose to view advert-free pages - but they have to pay for the privilege. Compaq hopes MilliCent, currently being tested with the company's online journal, will attract Web publishers looking to increase banner ad revenues, while also appealing to advertisers wishing to increase the low click-through rate that many banner ads currently suffer. A Compaq spokesman claimed the technology will change the face of Web advertising, making it a profitable business for publishers and advertisers. The move breathes new life into the concept of electronic cash, which faces stiff competition from credit cards and smartcards as the preferred means of making online payments.
Earlier this month, ecash software pioneer, Digicash, went bankrupt after failing to attract enough customers, while First Virtual pulled out of the market in July. However, IDC analyst, Stefan Elmer, thinks ecash is a good idea waiting to happen. "It's got long-term potential, but it's the same problem with any new technology: its success will depend on how many people use it, both on the demand and supply side." Elmer believes Compaq can make a success of the technology where Digicash failed. "For Digicash, the time wasn't quite right. People are still scared to use electronic cash - a big company like Compaq will be able to throw funds at the project and inspire consumer confidence." Compaq was unavailable for comment.