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Since a mid-January announcement from ZeoSync claiming it had succeeded in creating a compression technology that could reduce files to one one-hundredth of their original size with no loss of data, debates have flared as to whether ZeoSync has done what it claimed, is mistaken in its claim, or is perpetrating a fraud.

A failure to provide proof of its "discovery," the loss of some of the scientists and researchers that the company claimed were working on its technology, and the resignation of a member of ZeoSync's advisory board after revelations surfaced about his past criminal record are casting further doubt on the company's prospects.

ZeoSync's claim of 100:1, loss-less compression, if true, would overturn mathematical and scientific laws established more than 50 years ago. Needless to say, experts have decried the "breakthrough," comparing it to another hoped-for, but impossible invention: the perpetual motion machine. One analyst, who holds a Ph.D. in audio compression and was interviewed at the time of ZeoSync's announcement summed up the "breakthrough" as "simply impossible."

Raising Cash

When ZeoSync made the January announcement, Chairman and Chief Executive Officer Peter St. George said the company had been running on $10 million in private funding, but was looking to raise more money to continue its work. This week, St. George said that ZeoSync is "actively engaged" in raising $40 million through a private stock offering.

Since January, though, things have not gone entirely smoothly for ZeoSync. St. George promised that one week after the original announcement he would answer skeptics by revealing the terms of a demonstration that would allow researchers to test ZeoSync's technology. That announcement ended up being made nearly a week after it was promised and contained no concrete details about when such a test would be offered, instead saying that the details would be provided "shortly" and "at a later date."

St. George now says that the test, which was promised to be "an open testing process that would enable independent scientists to test ZeoSync's proprietary algorithms" in the company's statement, will occur in the form of six demonstrations for chip makers starting next week. ZeoSync will only demonstrate the technology for those companies, which he declined to name, and the companies will make statements about the demonstrations and the technology.

"I'm sure that statements from those companies will suffice," making unnecessary the general test originally promised, he said.

Chipmakers Quiet

If the policies of some leading chipmakers are any indication, though, such statements will likely not be forthcoming. A survey of a handful of U.S.-based telecommunication and networking chip companies found that they are generally reluctant to make announcements about demonstrations or meetings with companies.

A Cisco Systems spokesperson said that Cisco's "official company policy is that we don't disclose internal meetings."

Motorola, another leading maker of telecommunication and networking equipment, has a similar policy. "Within the semiconductor sector, we talk to a lot of different companies," said Ken Phillips, director of business communications with the Motorola Semiconductor Product Sector. Making such an announcement "doesn't make any sense" unless there's a deal in place, he said.

Phillips did allow that an announcement could happen after the demonstration, but would depend on the context.

Intel, one of the world's leading chip companies, follows a similar business practice. "We would not comment on if we were just meeting with a company," said William Giles, an Intel spokesperson, noting that Intel meets with a lot of companies.

"We typically wouldn't comment on [a meeting] publicly ... until we had some sort of formal agreement," he said, adding that the company does not confirm meetings with third parties.

Broadcom follows a similar policy, according to a spokesperson.

Fluid Team

Beyond the testing issue, the company has also been hurt by a defection of talent from its scientific team. When ZeoSync's original announcement was made, the company boasted that it had more than 30 scientists around the world working on the technology as members of its scientific team. As of Tuesday, only five of those scientists remain listed on ZeoSync's Web site as members of the scientific team.

St. George maintains, however, that the company still has dozens of people involved in developing its technology and that the five scientists listed on the Web site are the members of its core technology team, not the entirety of its development staff. While admitting that the company made some mistakes in releasing the names of some of the scientists that it claimed to be working with, St. George refused to answer further questions about the scientific team.

At the time of the original announcement, multiple members of the scientific team refused to stand behind ZeoSync's claims, denied working more than an hour with the company and derided the company's claims.

For example, John Post, an assistant professor of electrical engineering at Arkansas Tech University, was named as a member of ZeoSync's scientific team. Post, it turned out, had only played "a small role" in consulting on the technology at the time of the announcement. Post, interviewed this week, said he asked ZeoSync to remove his name from their Web site as he felt that the way he was presented on the site made him appear to be an employee. ZeoSync complied with his wishes quickly, he said.

Post has not worked with ZeoSync since the time of the January announcement, he said, but "would entertain it in the future." He stopped his consulting for the company due to the nondisclosure agreement we would have had to sign to continue working with them and because "[nothing] there ... is a good match for my forte," he said.

Questions Remain

Despite having done some consulting work for the company, Post can't verify the claims ZeoSync is making about its technology.

"I've never seen the compression work," he said, adding, "I don't know how they came up with their results."

Post would like to see the technology pan out, though, saying that ZeoSync is aiming for "a laudable objective" and that "the impact would be tremendous," were the company to succeed. But he also thinks it won't be easy.

To succeed, "you would have to have an algorithm capable of discovering any pattern, no matter what it is," he said. "It certainly seems to me tough to pull off."

Another revelation related to ZeoSync came when the background of business advisory board member H. Hamby Hutcheson was posted anonymously on at least one Web site and repeatedly sent by e-mail to reporters covering the company. Hutcheson was arrested four times in the 1970s and 1980s, on three counts of passing bad checks and one count of cocaine possession. Hutcheson served half of a three-year prison sentence for the bad check misdemeanors in Florida. He served 30 days on the cocaine charge.

Hutcheson said he has resigned from ZeoSync's business advisory board where he had worked as a consultant, effective Thursday, the same day he was interviewed. However, St. George did not mention Hutcheson's resignation when interviewed the same day.

Hutcheson resigned because of "the press about the fact that I had a conviction 20 years ago," he said. Though he did not reveal his background to ZeoSync at the time he was hired, he did not think it was relevant, he said.

"I had a drug problem and I paid a penalty for that," he said. "I've worked very hard for 20 years to have a career."

St. George also turned aside questions about Hutcheson, saying Hutcheson was working with the company as a consultant on a 90-day contract and owned no stock in the company. Hutcheson verified this.

St. George dismissed Hutcheson's past as "sideline issues," noting that Hutcheson currently chairs a number of government committees. ZeoSync, St. George said, wants to proceed with its business.

"All we're asking for is for the decency to let these tests take place so the truth can be known," St. George said.

Presumably, he's not the only person interested in seeing ZeoSync's technology tested.

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