Rearden Press

In technology circles these days, the best way to get people talking about a new product is to just shut up.

Take New Hampshire inventor Dean Kamen, for example. His company went to great lengths -- like building an underground test track, shredding banana peels and making sure office window shades could never open -- to keep his new transportation gadget hush-hush until it was ready for public consumption.

The air of mystery surrounding Kamen's Project Ginger only served to elevate speculation about it to urban legend status.

So when Kamen finally took the wraps off his Segway Human Transporter last month, it was a major news event. Kamen found himself in the middle of a media frenzy, even rubbing elbows on NBC's "The Tonight Show" with host Jay Leno, a big tech buff who had been following the secret progress of Ginger.

Other recent high-profile examples, like Cupertino's Apple Computer's fueling rumors about its new iMac by becoming even more tight-lipped than usual, highlight how operating in stealth mode can generate as much publicity as a costly 30-second spot during the Super Bowl.

After all, it's only human nature to be the most interested in something you're not supposed to know about.

"P.T. Barnum lives," said Andrew Leckey, director of the business journalism program at the University of California at Berkeley. "We really do want to see what's behind the curtain. We're still suckers for the same old things we always were."

Of course, the business of keeping secrets is as old as commerce itself and remains an integral part of many industries, from defense to entertainment.

But it may be more difficult for companies to keep mum nowadays as traditional media outlets battle online media for scoops in a competitive 24/7 news environment.

There are pros and cons to operating in stealth mode, but secrecy gives a company time to refine its product while protecting its intellectual property from potential competitors, WebTV founder Steve Perlman said.

"From a competitive point of view, it's advantageous to be stealthy," said Perlman, who has become a master of corporate disguise. "The product takes twists and turns as you evolve it. There are some things we thought about early on that turned out not to be such a great idea."

His latest venture, Moxi Digital Inc. of Palo Alto, finally emerged from the shadows at this month's Consumer Electronics Show after operating for two years in stealth mode as Rearden Steel Technologies Inc.

The industrial Rearden Steel name, derived from a fictional firm in the Ayn Rand novel "Atlas Shrugged," had nothing to do with the company's true purpose -- developing an inexpensive, multipurpose home digital entertainment hub, with a DVD/CD player, digital video recorder, broadband Internet access, a digital cable or satellite tuner and a home music jukebox.

The company even had a logo featuring what looks like an ancient Roman chariot driver. A brass logo and the Rearden Steel nameplate are still affixed to the company's brick-faced headquarters in downtown Palo Alto.

Employees, prospective employees, investors and anyone who had any inside knowledge had to sign statements saying they would not talk about the company's activities.

Perlman used the same tactic -- and the same logo artist -- in 1995 when he formed a company called Artemis Research, which was in reality WebTV, a service that plugged Internet access into a television set.

Artemis Research, named after the Greek virgin goddess of the hunt and the moon, revealed only that it was "committed to studying the results of sleep deprivation, poor diet, and no social life for extended periods of time on humans and dwarf rabbits."

Perlman said the dwarf rabbit was one of the founder's pets. And technically, watching WebTV into the wee hours could cause sleep deprivation.

The Artemis Web site still operates, although Microsoft bought WebTV for an estimated $500 million in 1997.

'UP TO SOMETHING'

The fame Perlman received from WebTV made technology watchers even more curious when he formed Rearden Steel in January 2000.

"We definitely had a lot of people trying to figure out what we were all about," Perlman said. "As soon as I left WebTV and they saw my return address was Rearden Steel, people knew I was up to something."

Keeping the secret was particularly difficult because there is a San Jose Mercury News bureau around the corner. But Rearden Steel whipped the rumor mill to a frenzy last year when it landed $67 million in financing from big- name investors like AOL Time Warner and EchoStar.

One local reporter even tried to buttonhole the guy who delivered bottled water in an attempt to divine what was going on inside.

Perlman said one story he saw speculated that the firm was building entertainment devices that used virtual retinal displays. That probably stemmed from an old interview in which Perlman said he thought "it would be cool" to someday build technology that displays video images directly onto a person's eye.

The downside of stealth is that a company can't correct erroneous rumors and speculation that can run rampant.

AN ACCIDENTAL EMPIRE

Consider Napster Inc., which in late 1999 was trying its best to fly far under everyone's radar. The company's interim chief executive at the time, Eileen Richardson, declined several requests for interviews, saying the startup prefered to remain in stealth mode while it finished its online music- sharing program and business plan.

But the beta version of Napster became a huge underground hit, attracting millions of users worldwide. Copyright infringement lawsuits by the recording industry gave Napster more publicity, shoving the company into the sunlight and creating what insiders called an accidental empire.

The Segway Human Transporter, which also became known as IT, disappointed some tech watchers because of prerelease rumors and speculation that fueled expectations of one of the biggest transportation advances ever seen in the history of the world.

"All his talk about this mystery technology, and it was basically a scooter, " said Andrew Gordon, a staff writer with Technology Marketing magazine.

Kamen said his company tried to avoid any publicity before it was ready to deliver a polished version of the Segway, a one-person, two-wheeled electric vehicle that looks like an old push lawn mower. The computer-controlled, gyroscope-balanced Segway is designed as a bridge between walking and driving on trips of a mile or two.

'NOBODY WANTS TO DISAPPOINT'

"It was not our hype," Kamen said during a recent Bay Area stop. "In fact, I was very worried that when we finally showed the world that IT's done, IT has a name, there would be some people who would be disappointed. And nobody wants to disappoint the world."

Segway operated for two years under the name Acros, Greek for "standing on top of something," Segway Vice President Gary Bridge said.

Acros moved into an Civil War-era industrial complex on the shores of the Merrimac River in Manchester, N.H., and built an underground test track. Employees sat behind barriers placed at every entrance to shield their work, and the window shades were fixed so that nobody could open them even by accident.

About 1,000 people -- employees, investors, even Bridge's 12-year-old son --

had to sign strict agreements to keep what they knew secret. And like a Cold War nuclear weapons facility, "people's spouses here didn't even know what we were working on," Bridge said.

The company even began shredding its garbage after someone inadvertently sketched the Segway on a banana peel, a problem because Segway knew outsiders would snoop through its trash, Bridge said.

But none of that stopped the speculation, especially after details of a book proposal about Segway leaked.

"It was a mixed blessing," Bridge said. "The problem with that buzz was that we were unable to tell our side of the story. Therefore, expectations built higher. People were inventing levitating machines and all kinds of nonsensical things."

Still, the buzz caused the news media to take notice -- there have been 300 stories printed in the past six weeks, including news last week that the U.S. Postal Service used a Segway for the first time to deliver mail in Tampa, Fla.

THE KING OF BUZZ GENERATION

Apple Computer Chief Executive Officer Steve Jobs is notorious for using secrecy to generate more buzz.

Brett Miller, an analyst with A.G. Edwards and Sons, said of all the companies that take pains to guard their product secrets, "Apple's probably the king."

Apple can be outright militant about protecting its secrets. Miller pointed out how a few years back, the company cut off one of its graphic suppliers after the supplier leaked information about a new product.

Still, the week before this month's Macworld Expo 2002 in San Francisco, Web sites that follow Apple were ripe with rumors about what Jobs would reveal.

One site, Spymac.com, even posted supposedly sneak photos of a new handheld device called the iWalk.

Then, on its own site, Apple promised a Macworld event that would be "Beyond the rumor sites. Way beyond."

Jobs also bumped his keynote address one day ahead of schedule because Time magazine planned to run a cover story on the new iMac.

But why all the secrecy?

"He can get a stock pop out of it," Miller said of Jobs.

Miller added that the company also gets free marketing out of it, with journalists and Mac enthusiasts tripping over themselves trying to guess what Apple is up to.

"All that extra hype makes more and more people think of Apple," Miller said. "It's free advertising, and that's the ultimate reward."

The strategy does work in terms of added publicity.

"News agencies that paid no attention to Apple a week before were trying to dig through (company) staff lists" to find someone who would talk, said David Sims, editorial director of Sebastopol's O'Reilly Network, which covers open source and emerging technology.

"We were just following the bread crumb trails they were laying out for us, dutifully walking in their tracks with the stories the readers seemed to be interested in," Sims said.

Apple officials declined to comment.