Can I Won Keep Winning?

Life changed for Jonas Steinman in more ways than one on Mar. 3, 1999. First, his second daughter was born nine days early. Then, after a quick change into his lucky suit and silver tie at the hospital, he headed over to CBS headquarters in New York to pitch an Internet business. With little more than a couple of laminated paperboard mockups of the proposed Web site and a 30-second rough-cut commercial, it took him and partner Bill Daugherty just 45 minutes to talk CBS chief Mel Karmazin into staking their startup with a $30 million loan--and a promise of $70 million in advertising over four years.

Seven months later their Net portal, iWon Inc., was born. In some ways it's not much different from bigger rivals such as Yahoo! Inc. Except, that is, in one rather costly, possibly very clever, way: iWon offers millions of dollars in sweepstakes to visitors who rack up chances to win cash prizes every time they use the site to surf the Web, check the local weather, read the news, or just log on. Steinman and Daugherty were the first to propose simply giving away money on an Internet portal, and that was all CBS had to hear. "Americans like to play lotteries," says then CBS Chief Financial Officer Frederic G. Reynolds, who admits to purchasing the occasional Power Ball ticket.