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Acunet is an Internet dial-up service provider and e-commerce development company founded in 1996 by Fernando Colon Osorio, a former Digital Equipment Corp. engineer and executive. Acunet has developed what Osorio terms "fourth-generation" electronic commerce technology that enables companies to set up customized, scalable, "world-class" e-commerce operations at a fraction of the cost of stand-alone, proprietary systems created by individual Internet merchandisers such as Amazon.com, E-trade and Dell Computer. Be Free, also founded in 1996, does not host Web pages or provide dial-up services. Rather, the company focuses on building and maintaining networks of sales affiliates and has developed software that allows tracking of individual buying habits and creation of individual customer profiles. The software, which Be Free has patented and intends to have in operation by the year 2000, gives merchants the ability to create "target marketing" custom tailored to an individual specific buyer's "psychographic profile." Gordon B. Hoffstein, Be Free president and chief executive officer, said the new product "is like if you were driving along the road and whatever billboard you passed recognized your car and started showing you ads based on your buying habits." The "behavioral targeting technology" software, Hoffstein said, collects an "anonymous profile" of an individual Internet browser whenever someone uses that browser to log on to a Be Free sales affiliate Web site. The purchases made from that browser are noted and categorized. Over time, a profile of purchasing habits from that computer is created, so that when someone uses that computer again to shop on an affiliate Web page, he or she will be presented with custom tailored advertisements and offers geared to previous spending habits. The program will create not only a profile of what has been purchased, but what was not purchased, and what was seen and considered before the purchasing decision. Hoffstein has long been close to the computer industry. He was co-founder of PCs Compleat Inc., a Marlboro mail-order computer company sold in 1996 to CompUSA Inc. in a stock swap valued at $110 million. Before that, Hoffstein was chairman and CEO of Microamerica Inc., a Marlboro microcomputer distributor sold in 1989 to Softsel Computer Products Inc., which became Merisel Inc. of El Segundo, Calif. Colon Osorio said the e-commerce industry is at the point of what he termed a "discontinuity," which he described as a point in time when a new idea or technology emerges that creates unexpected business opportunities. The invention of the transistor and semiconductor technology are other examples, he said. By 1995, at the beginning of e-commerce, the few companies that were entering the market were each spending millions of dollars a year to create and then maintain proprietary e-commerce software and computer systems. Colon Osorio said Acunet is at the forefront of the "fourth generation" of Internet commerce, with a new product, under the umbrella name AcuShop. This product, he said, enables companies to build Web-based transactional systems for far less than the price of earlier proprietary solutions. Hoffstein said Be Free has developed a network of merchant "affiliates" in which an e-commerce company can gain access to dozens or hundreds of other Web pages and use those other Web pages to generate sales. The affiliate who hosts an e-commerce site earns a commission as a percentage of every item sold through the affiliate's Web page. Be Free maintains the affiliate merchant network, automatically computing and generating commission payments, and takes a 2 percent commission on every transaction on the network. Some of Be Free's major affiliates include Barnes & Noble and American Greetings. Acunet's products are also part of high-profile e-commerce and Internet sites, and include the basis for the annual WBUR Internet auction. Both companies are privately held and do not disclose financial data. However, both are growing rapidly. Both Colon Osorio and Hoffstein said they hope the companies at some point could become public corporations.