• by Masha Geller , September 7, 2001

I hate to forecast that yet another Internet ad company will soon bite the dust, but I can't resist an "I told you so."

I'm talking about the CueCat. Several newspapers and magazines over the last year had printed bar codes alongside some stories that, when scanned by the CueCat (a mouse-like device manufactured by privately-held Digital Convergence), linked the reader's computer to a website for additional information and advertising. An interesting idea, right?

Well, it looks like it didn't quite catch on with consumers.

Earlier this week, Belo Corp., which introduced the CueCat on the pages of the Dallas Morning News, the Providence Journal and the Press-Enterprise last year, said it will stop using the technology and has now written off their $37.5 million investment in Digital Convergence. Other investors included GE, RadioShack Corp. and E.W. Scripps Co.

Why didn't it take? Because too few people used it even though the Morning News sent at least 200,000 free CueCats to its readers last year, and others were distributed at RadioShack stores nationwide.

Readers and viewers skipped over the cues and preferred to go directly to the newspaper and TV station websites, Belo senior VP Skip Cass told the Associated Press earlier this week.

All those skeptics, myself included, who said the CueCat is an unwieldy device that assumes people read newspapers while seated at their computer, turned out to be right after all.

Digital Convergence, which once hoped to go public, fired the majority of its staff and according to several sources, is looking for additional financing.