A Net Gain For Gateway?

The plan: Become newbies' first choice for PC financing, training, and Internet service

Ever since he founded Gateway in an Iowa farmhouse 14 years ago, Chairman and CEO Theodore W. Waitt has fought a relentless battle against plummeting PC prices and big-time competitors like IBM, Dell, and Compaq. But those challenges may wind up looking like mere fistfights. As the Internet explodes, Waitt is facing even scarier foes: Internet service providers (ISPs), from pesky startups to America Online, whose steroidal stock valuations allow them to offer PCs free in exchange for customers. "The valuations that Wall Street is putting on Net companies lets them develop a business model that's not about making money but that's about growth," complains Waitt.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.