Article

Year in review: 2001

An incredibly complex and challenging year is wrapping up in the kiosk industry. Here is a look at the defining moments of 2001.

February 18, 2002

In any maturing industry, the road to ubiquity is usually strewn with land mines. That was apparent in the kiosk industry during 2001, as the sector suffered the effects of a sluggish economy and the shock waves of the Sept. 11 terrorist attacks.

On the down side, applications that had been deemed "can't miss" fell far short of the mark. Companies, privately held and publicly traded, staggered. Some even collapsed.

But on the plus side, retailers and other companies were not discouraged from launching new deployments, while many veteran kiosk executives maintained their commitment to the industry.

At year's end, the kiosk industry continued its gradual movement toward what it expects to be overall consumer acceptance, with new projects unveiling and new applications gaining buzz status.

Here is a look at the events that shaped the year in kiosks, version 2001.

January

* BigFatWow! Media Networks, which offers free Internet access via shopping mall kiosks, completes the acquisition of rival company CyberXpo. The acquisition gives BigFatWow 113 installations.

* High-speed access provider Darwin Networks Inc., which also offers public access Internet terminals and kiosk design services, files for Chapter 11 bankruptcy protection. The company would shut down in May.

* Kmart announces one of the largest kiosk deployment in the sector's history, more than 3,500 online kiosks in 1,100 stores. The units will connect directly to the company's retail Web site, BlueLight.com.

* Gaming kiosk manufacturer Agora Interactive Inc. files for Chapter 11 reorganization due to escalating debts. The company ended fiscal year 2000 with assets of $1.1 million, but unsecured debts of $1.6 million.

February

* InnoVentry Corp., which provides check-cashing services through a line of automated financial kiosks in retail outlets, completes a $253 million round of funding, taking its fundraising total to $400 million since its founding in 1998.

* Kiosk software developer Netkey Inc. completes a $9.5 million round of funding. The company plans to use the funds for product expansion and to launch a global sales and marketing campaign.

* Video entertainment kiosk provider ObjectSoft Corp. appeals NASDAQ's decision to delist the company from its SmallCap Market.

March

* Pixel Magic Imaging, which offers photo kiosk solutions, secures $10.5 million in second-round funding from Southeast Interactive Technology Funds, Sony Electronics, and Barnard & Co. LLC.

* BigFatWow! announces it has more than two million users per month at free Internet access kiosks in 106 shopping malls through the United States, making it the country's largest provider of broadband Internet access. By year's end, the company would be out of business.

April

* NASDAQ formally delists ObjectSoft from its SmallCap Market for failing to maintain the board's minimum bid price of $1 per share. The company's stock plummeted from $8 per share in March of 2000 to less than 10 cents a year later. S. Michael Rudolph is named ObjectSoft chairman, president, and chief executive officer, replacing David E.Y. Sarna. NASDAQ also delisted CAIS Internet Inc., an online provider that planned to install Internet kiosks in airport, shopping malls, and cruise ships.

* Gaming kiosks developer GameCom Inc. completes a letter of intent to acquire virtual reality company Ferris Productions Inc. Entertainment Technologies & Programs Inc., which had been negotiating an acquisition with Ferris, files suit to block the purchase.

* Ford Motor Co. Internet executive Thor Ibsen is named president and chief executive officer of kiosk software developer Degasoft. Ibsen announces that the company will expand and move its home office from Iceland to London.

* During KioskCom's 2001 convention in Orlando, Fla., members of the online trade association Kiosks.org meet to discuss establishing a formal association to promote the needs of the kiosk industry. Among the topics discussed: the establishment of bylaws, formation of committees, and the election of officers.

May

* Four months after Kmart launches a major kiosk deployment built around its retail Web site, BlueLight.com, the site announces a major restructuring. BlueLight will maintain the kiosk line, but plans to reduce its staff by making greater use of Kmart's resources and eliminating duplicate jobs.

* ObjectSoft reveals it is in discussions to merge with fellow interactive kiosk developer Golden Screens Interactive Technologies Inc. The merger is expected to take three to four months to complete.

June

* Convenience store chain 7 Eleven Inc. rolls out its Vcom line of financial services kiosks at 36 stores in southwest Florida. The machines, manufactured by NCR Corp., will provide a range of services, including check cashing and money orders. The chain has already installed Vcom machines in nearly 60 Texas outlets as part of a beta test.

Target Corp. vice chairman Gerald Storch speaking at the Retail Systems 2001 trade show.

* Target Corp. vice chairman Gerald Storch, delivering the keynote address at the Retail Systems 2001 trade show in Chicago, said kiosks that allow shoppers to buy out-of-stock items through a retailer's Web site represent a poor in-store application. He argues that gift registries, store directories, and information applications (job hiring, product information, etc.) made more sense.

July

* Degasoft receives a $3 million investment from The Venturos Group. The funds will be used on the company's new London headquarters, product enhancements, and sales and marketing efforts.

* Public access kiosk provider PayStar Communications Corp. announces plans to buy almost 1,000 public Internet kiosks from eKiosk Corp.

* ObjectSoft ceases operations and files for Chapter 7 bankruptcy protection after its proposed merger with Golden Screens falls apart. Merger talks ended after several investors change their mind about investing in ObjectSoft, according to company chairman S. Michael Rudolph.

* BlueLight.com, the online retailing arm of Kmart Corp., is bought out by Kmart, which previously owned 60 percent of the company. Company officials did not say how many BlueLight employees would be retained at its San Francisco office.

* Kiosk deployer CityKi unveils its first kiosk at America's Food Basket grocery store in Dorchester, Mass. The kiosk is designed to offer Internet services and retail shopping for inner-city residents.

* IT consultant and kiosk designer UBICS Inc. appeals a delisting notice from NASDAQ, which says the company no longer complies with its $5 million minimum market value requirement.

* CAIS Internet shareholders approve a name change to Ardent Communications Inc.

August

* Australian kiosk manufacturer NeoProducts Pty Ltd. acquires English kiosk developer LGC Associates, consolidating its presence in the European kiosk market. Earlier in the year, the company landed a contract to manufacture 9,000 Jobpoints employment service kiosks for UK Jobcentres.

* As part of its continued kiosk expansion, PayStar Corp. announces plans to purchase 200 Internet kiosks from iCatcher Network Inc. The company remains in expansion mode throughout the fall, reaching a letter-of-intent in November to purchase nearly 400 Internet kiosks from NP Communications.

September

* GameCom shareholders approve the company's merger with Ferris. The shareholder meeting was delayed a week after the Sept. 11 terrorist attacks. The company receives $1 million in funding from investment firm Olympic Holdings, which agrees to seek acquisition targets for GameCom.

* In the wake of the Sept. 11 terrorist attacks, SMO MultiMedia Corp. announces it will add security measures - including safety information and airport security rules - to its line of E-station airport terminal kiosks. A month later, the company announces it is adding biometric technology to its kiosks.

* Just six months after completing a $253 million round of funding, check-cashing kiosk provider InnoVentry shuts down, citing financial problems, putting 300 employees out of work. The company had deployed about 1,000 machines that offered advanced ATM functionality.

Rick Rommel

* Eastman Kodak Co. director of digital retail systems Rick Rommel is named interim president of the Kiosks.org Association advisory board.

* UBICS Inc. remains on the NASDAQ National Market after the exchange places a moratorium on stock delistings until the end of the year due to the Sept. 11 terrorist attacks.

* NASDAQ suspends trading in GenesisIntermedia Inc. and launches an investigation into its stock-trading activities and its relationship with Ultimate Holdings Ltd., a Bermuda-based company controlled by Saudi businessman and Iran-Contra figure Adnan Khashoggi. GenesisIntermedia's Centerlinq division operates advertising kiosks in shopping malls. A series of lawsuits alleging securities fraud are filed against the company and its founder, Ramy El-Batrawi in October.

October

* Kiosk software developer NetShift Software Ltd. obtains $5 million in venture capital funding from Shell Internet Ventures BV. The company plans to use the funds for marketing and product development.

* Degasoft announces it has changed its name to Kudos Development Group. The name change coincides with the launch of the company's Kudos version 6.1 kiosk development software package.

* Phillips 66 Co. begins deploying a kiosk test program at Circle K stations in Phoenix and Philadelphia. The kiosks offer financial services, online shopping, and telecommuncations services. Working in conjunction with Global Access Alliance Inc.and Info Touch Technologies Corp., Phillips announces it will deploy the kiosks in more than 1,100 Circle K stations nationwide in 2002 if the trial program is successful.

* Ardent Communications files for Chapter 11 bankruptcy protection, but says operations of its high-speed Internet access and Internet kiosks would not be affected by the move.

* Boston's Logan International Airport announces plans to test a pair of biometric security systems for 90 days. Two of the planes involved in the Sept. 11 attacks were based out of the airport.

* A survey of retailers conducted by Display & Design Ideas magazine reveals that 42 percent of respondents believe increased electronic interactivity will represent a significant change in the retail market over the next five years.

November

* Eastman Kodak Co., whose digital-photo kiosk system is the kiosk industry's largest deployment, announces plans to establish an open architectural standard for its retail digital software.

* Deli-style sandwich chain Schlotzsky's Inc. unveils plans to test a customer-ordering kiosk at a new location opening in Round Rock, Texas, located near the headquarters of Dell Computer Corp.

* Regional carrier America West Airlines and international airline Cathay Pacific both launch passenger check-in kiosks. America West deploys six kiosks at Phoenix's Sky Harbor International Airport, while Cathay Pacific launches its system in Hong Kong and Taiwan.

December

* British Telecomand Marconi Interactive Systems enter a strategic partnership to deploy 28,000 Internet payphones in the United Kingdom by 2007. The payphone kiosks will also feature full Internet access, e-mail, directional services, and retail advertising.

* Australian airline Qantas announces plans to launch a line of self-service check-in and baggage kiosks starting in mid-2002.

[Editor's note: Info Touch Technologies became Tio Networks in April 2006.]