Travelzoo stock free shares

(IDG) - Sure, you've heard of Web companies handing out frequent flier miles or CyberCash to surfers who visit their sites. But the founders of online bargain-vacation finder Travelzoo are pioneering a new technique in Web site promotion: giving away three free shares of company stock to anyone who stops by and signs up. Refer friends to the site, and earn up to seven additional shares.

Unfortunately for Travelzoo's shareholders, the start-up, whose Web site launched in April, isn't traded on any public market in the U.S. or elsewhere. And the company doesn't issue actual stock certificates, though it provides the "registration numbers" of each share via e-mail.

Though Travelzoo is based in the Bahamas, its stock offering is still subject to Securities and Exchange Commission regulation because it is making the offering to U.S citizens. The SEC has taken steps to more closely monitor securities offerings from offshore Web sites. In March, it issued an "interpretive release" stating that the SEC "will take appropriate enforcement action whenever we believe that fraudulent or manipulative Internet activities have ... placed U.S. investors at risk."

SEC spokesman Duncan King declined to comment on Travelzoo specifically.

Travelzoo.com is the brainchild of Mark Foster and Ralph Bartel Internet Ventures, a San Jose company which holds Travelzoo's domain registration. The site aims to aggregate travel bargains on the Web, though currently most of the site's content consists of links to other online travel services such as Preview Travel and American Airlines, and text-based ads from small travel agencies.

The company says it will dole out shares to 700, 000 individuals who register at its site; so far, Travelzoo boasts more than 235, 000 shareholders, who Foster says will soon be able to attend online shareholder meetings and even elect a new president (Foster, Travelzoo's current president, says he is serving only on a temporary basis.) Ultimately, Web users will own 70 percent of the company.