[Red Herring]Good news for odor fans

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From: joelinda1@home.com
Date: Mon May 22 2000 - 21:51:46 PDT


Good news for odor fans
By Ken Yamada
Redherring.com, May 23, 2000

Good news, odor fans! Smell -- the great unconquered frontier of
multimedia -- is wafting closer to reality on the Web.

Digiscents officials say their fourth-generation iSmell box is in
development and that a Christmas-season product launch is on target.
They expect their scent-emitting box, a PC-speaker-size device, to be
priced at $80 to $150 each.

Problem is, company founders Joel Bellenson, 35, and Dexster Smith,
31, must first sweat out a search for second-round funding in the
neighborhood of $30 million to $50 million. They hope to raise the
money within 90 days.

The Oakland, California, company has a sensuous proposition: to become
the first ever to recreate smells that'll accompany pictures, sounds,
and moving images, giving audiences a "you are there" feeling.

Other inventors have made similar attempts, with notable stinkers such
as Smell-o-Rama and Aroma-Rama in the 1950s (certain smells were
pumped into movie theaters). In 1981, cult filmmaker John Waters
accompanied his movie Polyester with Odorama scratch-and-sniff cards.
Those efforts proved to be nothing more than gimmicks.

By contrast, Digiscents is attracting serious attention. Procter &
Gamble (NYSE: PG), the giant consumer products manufacturer, earlier
this month announced a research alliance with Digiscents, hoping to
catch a whiff of technology that, if successful, could have
wide-ranging implications for marketing brands such as Pantene, Oil of
Olay, Vicks, and Pringles. A P & G spokesman says the project will
focus on consumer market research. "We think there's something there,"
he says.

Also, eCandy recently signed an agreement to "scent-enable" its Web
site with Digiscents technology. The Los Angeles-based online merchant
hopes to use smells to help candy makers such as Nestle, Mars, and
Nabisco (NYSE: NA) conduct product research and sell items like
chocolates and fruit-flavored candies. "Ultimately, I see it as a
value-added proposition," says Rani Aliahmad, eCandy cofounder.

Mr. Bellenson claims to have letters of intent from 400 companies
interested in his company's technology. But that won't mean much,
should he fail.

The idea of a digital version of Smell-o-Rama still elicits chuckles
and visions of mad scientists. Mr. Bellenson waves away the criticism.
"We've gone beyond our marketing objectives, and gotten past people
dismissing us as an April Fool's joke," he says.

Digiscents officials wouldn't give me a demonstration, explaining that
an existing prototype was being given a makeover as a
fourth-generation box. They claim early prototypes already made strong
impressions on other people. "No one who's been given a demo hasn't
left with a smile on their face," Mr. Bellenson says.

The two Digiscents founders met while Stanford University
undergraduates, and, in 1991, founded Pangea Systems, which focused on
building genetic databases. Pangea eventually morphed into
Doubletwist, a biotech firm that's emerged as a contestant in the race
to map the human genome. The duo stepped down from daily operations
two years ago, selling part of an equity stake, which earned them
enough to retire.

Employing biotech research ideas and raising $1 million in seed
funding, they started Digiscents last fall around the idea that a
myriad of scents may be created using a map of 128 different oils.
Similar to an ink jet printer, those oils form the core of a
replaceable cartridge, which is inserted in the company's iSmell
device. The oils are electrically stimulated in different combinations
to create specific smells in response to software prompts programmed
into applications such as Web site features, computer games, digital
music, and movies.

In February, the company raised $10 million from Pacific Century
Cyberworks (HKSE: 1186) in exchange for a 12.5 percent equity stake.
Digiscents currently has 40 people, with hiring plans calling for 100
people total by year end.

With an idea that captures imaginations, Digiscents is attracting a
lot of attention. The possibilities are boundless for digital
entertainment, computer games, perfume, aromatherapy, fast food,
travel, medicine, you name it.

Digital smell may be an idea whose time has come, but there are
reasons why no one has mastered smell generation. It's an extremely
complex process involving chemical reactions, biology, physiology,
genetics, and, perhaps, the secrets of life itself -- let alone

"God knows, I can't say if it will make money," says James Penhune, a
Yankee Group analyst. "The jury is still out."

I agree. Don't hold your breath.

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