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CEO out at Ellison's Net-device firm

update New Internet Computer Co. CEO Gina Smith is leaving the Larry Ellison-backed Web-surfing gadget company she helped launch, CNET News.com has learned.

update New Internet Computer Co. CEO Gina Smith is leaving the Larry Ellison-backed Web-surfing gadget company she helped launch, CNET News.com has learned.

Ellison's NIC Co. is one of the last players in the once-promising market for low-cost alternatives to the PC. The category attracted large names such as Sony, 3Com and Gateway, as well as start-ups such as Netpliance, all of which have stopped selling the devices in the past two years.

Smith, a former technology reporter for ABC News and CNET, was chosen by Ellison in February 2000 to head the company, of which he is chairman and majority owner. The company's namesake product is a $199 Linux-based Web-surfing device that lacks a hard drive, storing the operating system and other software on a CD and in flash memory.

Smith, who quietly resigned March 15 and has been on vacation the past three weeks, said that Chief Financial Officer Peter Clark is taking over as CEO. Smith said that she plans to write a book about Silicon Valley since the late 1980s, drawing on her experiences as both a reporter and CEO.

The NIC device is Oracle's second try at a networked computer. Its first effort, called Network Computer, was not well received. Oracle eventually took the software core from that effort and created set-top box software developer Liberate Technologies.

Compaq Computer was one of the last big names to sell an Internet appliance. Compaq said in February that it had stopped selling its device after shipping the last remaining inventory, which connects directly to Microsoft's MSN Internet service. Although Compaq is not producing more of the units, the company has said it will introduce some kind of new non-PC Internet-access device later this year.

In February, Smith said the company fell short of its goal of selling 100,000 units by the end of 2001 and reaching profitability.

NIC Co. has announced a smattering of deals since debuting the device in July 2000, including pacts with Sun Microsystems, PeoplePC and Senior Explorer, an Internet service provider for those 50 years old and over.

However, not all of the deals that were announced bore fruit.

PeoplePC has not sold any of the devices, nor is it actively marketing the device on its Web site or elsewhere.

"We haven't seen any demand for it," said a source close to PeoplePC, who added that the company still could start selling the product if it sees demand in the future.

Smith said NIC Co., which has always had less than 20 people, is scaling back to focus on its core markets, such as selling to schools.

"I decided it was a good time" to leave, Smith said. "I'm on great terms with Larry (Ellison). I wish the company the best. I was its 'Mom' for two-and-a-half years."