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Belo Scratches CueCat

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DALLAS -- Belo Corp. says it will drop a technology that linked its newspapers and television broadcasts to Internet sites with a mouse-like device called a CueCat.

Belo said too few people used the CueCat, which Belo introduced Oct. 1 on the pages of the Dallas Morning News. Belo declined to provide numbers.

The Dallas-based company invested about $37.5 million in privately held Digital Convergence Corp., the Dallas company that developed the technology. Belo wrote off the investment. The Morning News sent at least 200,000 free CueCats to its readers last year, and others were distributed at RadioShack stores nationwide.

Belo said the Morning News, the Providence Journal and the Press-Enterprise in Riverside, Calif., would stop using the technology with Thursday's editions.

The newspapers had printed bar codes alongside some stories that, when scanned by the CueCat, linked the reader's computer to a Web site for additional information and advertising.

Belo's WFAA-TV in Dallas used a related technology that used electronic signals transmitted to viewers' computers if they were attached to the TV with a special cable.

But readers and viewers skipped over the cues and preferred to go directly to the newspaper and TV station Web sites, said Belo senior vice president Skip Cass.

Newspaper and online columnists ridiculed the CueCat as an unwieldy device that assumed people read newspapers while seated at their computer. Privacy groups warned that it could be used to track readers' online behavior because each unit has a unique identifier.

Belo officials said they would not track individual CueCat users but would gather anonymous information grouped by age, gender and ZIP code. Digital Convergence was embarrassed, however, when a security breach last year exposed the names and e-mail addresses of about 150,000 CueCat users.

Digital Convergence, which once hoped to sell its stock to the public, fired the majority of its 225-member staff in June and went into what an official called "maintenance mode." The official said this week that the company is looking for additional financing.

Other investors in Digital Convergence included NBC parent General Electric Co., RadioShack Corp. and E.W. Scripps Co.

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