Smart-card gadget trumpets security in mass-market push

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Entrepreneur Beny Alagem, who turned Packard Bell into a strong PC brand during the early 1990s, hopes to revolutionize home PC use with his latest company, MySmart.com.

The effort kicks off next week, when Mr. Alagem's company starts a nationwide rollout through CompUSA of its MySmart pad, a peripheral device that gives PC users one-touch access to Web sites.

HAVE CARD, WILL TRAVEL

Although MySmart.com is not the first with a device driving consumers straight to the Web, the gadget that includes a smart-card reader is among the first using a mass-market push. The reader aims to improve online security of transactions and banking.

The device, which is password protected and includes a removable smart card, sells for $19.95.

American Express Co. also distributes a PC-compatible smart card reader to holders of its Blue credit card. The reader, free since last year's launch, will cost $25 starting in September.

MySmart's first version has a button that links consumers to CompUSA's site. In September, MySmart users will get discounts on online purchases from Eddie Bauer Inc., Circuit City Stores, Carnival Cruise Lines, J. Crew and Ticketmaster Online-Citysearch.

"Instead of storing your sensitive credit card and bank account data on a server somewhere, you can store it on a card only you possess, and you can authorize transactions on a case-by-case basis," said MySmart CEO Jim DeRose, a former president of Mattel USA.

CompUSA offers the MySmart pad in a nationwide discount promotion through the first week of September. Then other general merchandise and electronics stores will carry the device, also sold at www.mysmart.com.

A bigger push will accompany "a few major banks" that will establish marketing tie-ins to My-Smart.com this fall, Mr. DeRose said, but declined to give details.

An estimated $5 million print campaign backs the launch beginning next month via Warwick Baker O'Neill, New York, themed "MySmart: Outsmart the Net."

E-TAIL SPONSORS

The company also has sponsorship deals with partners including Barnes & Noble, E-Trade Group and Toys "R" Us, Mr. DeRose said.

MySmart is one of three companies recently launched by Mr. Alagem, who has avoided the limelight in recent years. He resigned in July 1998 from Packard Bell, which parent NEC Corp. shut down last year. Armed with a $35 million investment by Softbank Venture Capital and other investments from Qwest Communications Corp. and Hawke Holdings, Mr. Alagem launched Los Angeles-based MySmart.com in January. The company has 35 employees.

Mr. DeRose said Mr. Alagem "rented offices in Century City (in Los Angeles) and started what amounts to an incubator company" about 18 months ago that now includes FastTurn, a business-to-business online sourcing company for apparel buyers at major retail chains, and Vault Technologies, which encompasses the former AST computer brand. Mr. Alagem this year abandoned his plan to return to the PC market with AST, another faded PC brand. Vault's mission now is to provide single-source hardware, software and system maintenance of professional offices' PC systems.

Copyright August 2000, Crain Communications Inc.

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