Copyright © 1995 Robert Seidman (robert@clark.net). All rights reserved. May be reproduced in any medium for non-commercial purposes.
In This Issue...
It took a long, long time, but the potential coffee mug logos are now up on the web site. Now you have to choose a logo, and I am leaving it up to you! So vote for your favorite at: http://www.clark.net/pub/robert/vote.html .
Last week, I asked for feedback regarding the "Short Takes" section. By an overwhelming margin, those who wrote in said that they would like it to be a separate list. I have a few things going on that may delay implementation of the new list, but once established, it is easy to maintain. I'll keep you posted.
Ahhhhh. It's been a good long while since I've had a "More Fun With Numbers" in the newsletter! And this week there's not one, but two! I love this stuff.
First, we'll start out with some really stupid numbers courtesy of CMP's Interactive Age magazine, which I generally like. But they took liberties this week that really irked me. Ironically, in a feature story on just how difficult it is to obtain the number of "Unique Users" based on "hits", Interactive Age went out of its way to estimate the number of unique users anyway!
Companies supplied Interactive Age with their hit counts and IA ran a chart on the top 10 sites for the week of May 1 - May 7. The hits by themselves were fascinating-some sites report an astronomical number of hits. Like Netscape's 30 million hits, which IA, in their infinite wisdom equated to 10 million unique visitors that week. Uh huh.
Even a little guy like InfoSeek reporting 6 million hits which IA equated to nearly a million unique users per week (910,000). No way. Un uh.
InfoSeek is an interesting little service. I use it a couple of times per week myself. And every time I do, I'd estimate that I generate about 200 hits on my own. So, that's 400 hits per week, just for me. If I were the average user, that would get InfoSeek's unique visitors to 15,000. While not scientific, that number sure the heck seems a lot more reasonable than the 910,000 reported by IA.
I spoke with Andrew Anker, President of HotWired and Chief Technology Officer for Wired Magazine regarding the report.
"They asked us for our hit counts and we said, '150% of whatever Pathfinder tells you'. We also gave them a real number, but it was such a silly question and study that we just couldn't resist."
Ironically, the HotWired figure for the study seemed "more" reasonable. IA reported that for the week, HotWired received around 3,000,000 hits which they then equated to 428,571 estimated unique users for the week. But this is where I have heartburn with what IA did. It is unclear from the chart that the estimated number of unique users is an estimate calculated by Interactive Age and not the site itself.
Anker laughed off the numbers reported. "We've gone on record that we have about 200,000 registered HotWired subscribers, so I'm not sure how they derived the number," said Anker.
One thing is clear. If HotWired only has 200K subscribers, then there really is no way that they could've had 429K visitors in one week. So why would IA even bother with estimates? The stories still worth a read at: http://techweb.cmp.com/ia/17issue/17cover.html .
It's a tough decision to make. Several months previous you've paid mega-millions for a software company that's making a web browser. It is your plan to integrate this browser into your online service application and blow the world away. But something goes wrong. It's more difficult than you thought it would be.
Meanwhile, the online service you most love to hate has beaten everyone out of the box with a fairly stable Web browser and the grand-daddy of online services has just launched its own Internet access and Web browser. The Web browser you've got is still in beta, and while there are many plusses, there are still too many minuses. Everyone's got a browser but you, and your customers are crying out for a World Wide Web browser. What do you do?
Surely this was what America Online was faced with when well over a month ago they publicly previewed their Web browser. They knew it wasn't ready, so they put up a public beta for their customers using their Windows client. To the brass at America Online, it probably seemed like a good compromise. Initially, it did to me too. But I'm beginning to wonder.
It's not so bad, you know-to put out a buggy beta browser. Heck, Netscape put out a buggy release browser! But it's not quite as buggy as the browser currently available via keyword: AOL PREVIEW for subscribers using the Windows client. It is unfortunate that someone's first experience with the World Wide Web should be a bad one and with the AOL beta Windows browser, that could happen.
When you're an early adopter type like I am, bugs don't mean much to you. You're conditioned to report them and ignore them. If you can't ignore them, there's another version for you to fall back on. There are a lot of early adopter types out and about the Internet. Some would argue that it's all still so new that even those signing up for Internet access today are early adopters.
Give Steve Case credit where credit is due-his whole plan, even going back 10 years to the launch of Q-Link was to build a service that was so easy to use ANYONE could use it. That's still the basic premise of America Online today, and that's one of the major reasons why they're the largest service in the United States. But as AOL nears its three millionth customer, one thing has to be absolutely clear-a whole heckuvalot of the AOL subscriber base does not fit the mode of "early adopter".
Those not in the stereotypical "early adopter" class might not know what to make of the bug riddled America Online Web browser. My fear is the conclusion they'll come to is: "It doesn't work." And they might not associate the problem as an America Online problem. That's the problem.
It's human nature that first impressions are important. Something as harmless as a cucumber makes me sick to my stomach. It is one of only a few foods that I absolutely will not eat. This baffled my mom for years. "But Robert, it hardly has any taste at all," she would say. Didn't matter. I wouldn't eat them. I still won't. Chalk it up to a bad cucumber experience somewhere early in my life. Hopefully, AOL members who have had bad Web experiences won't avoid the Web like I avoid cucumbers.
I recently tested a newer version of the AOL beta Windows client, but as of this writing it isn't available via the AOLPREVIEW area. The good news is that it is better! The problem with the browser choking while pulling in a page disappeared during my testing. But the browser still chokes on certain "image maps" and that's a problem as many of the best sites have gone the "image map" route. I'm sure they'll get it right one of these days. Probably even relatively soon. But I wonder if any damage has been done.
There are a lot of people and businesses banking on the success of the Web. Ironically, AOL also plans to cash in on the success of the Web. It is a safe bet that sooner or later they'll get it right. When they do we know they'll market the hell out of it. We can only hope that they'll make a special effort to target those who may have been turned off during the preview by saying, "No, really, THIS TIME IT WORKS!"
Until then, I'll go on wondering why it is that the benign cucumber makes me queasy, but the dangerous jalapeno pepper doesn't!
No, it's not from a letter from me to AOL chief Steve Case, but rather a lyric from a Toad the Wet Sprocket track from the Dulcinea album. Errr, compact disc, that is. But it seems like a fitting mantra for AOL customers who are still faced with the "occasional" system problem.
This time, it's the message boards (bulletin boards, message forums, or whatever you want to call them). Some sort of technical problem crept up causing users not to be able to post messages to the forums. Maybe this was just an attempt to give forum leaders a few weeks off, though no doubt their e-mail has been working overtime during the latest glitch.
Give AOL credit for being up-front about the problems with "updates" from Steve Case via the Welcome "screen". But then take the credit away for patting themselves on the back about being so forthright.
"We apologize for this inconvenience, and continue to believe that the best approach is to be candid about problems when they occur. Thanks for your patience," said the latest update as of this writing.
Last week's update on the Interchange launch generated a lot of e-mail (mostly positive though) including a response from Robert Schafer, publisher of the Star-Tribune Online. I'd mentioned that the price point for the Star-Tribune online would be $10.95/mo. for five hours of service once all the incentives and charter member pricing end on 12/31/95. I also noted that the $10.95/mo. was a buck more than the industry standard.
"What we're telling our users is that while the basic fee is a buck higher, their actual online bills will be a lot less than other services if they use the features of the software," said Schafer.
"It's the first services that's designed to be highly functional offline. As a result, even if you have 50 hours of reading material, you could be online only for 5 minutes a day to download that material. That's about 2 hours a month," Schafer added.
"In this instance, our price would be $10.95/mo. compared with an AOL price of about $150, based on its $9.95 +2.95 hour plan, and its inability to be very useful offline."
Well, he's right Interchange is highly functional offline. However, it seems to take a lot of "tweaking" to get exactly what you want. I've gone through a series of "Keep Updated" and "Keep Contents Updated" gyrations to have it pull down everything I want from the Washington Post's Digital Ink service which is still in beta. I then set it up to call at 4AM, which is about the only time of day I can guarantee that the phone line won't be occupied connecting to some other service. But after spending well over an hour "tweaking". It still doesn't automatically pull down exactly what I want and I have to go back online to get it.
I could avoid these problems by just downloading the complete sections of the paper, and that may have been the easier route to take. Call me an idealist, I want what I want and ONLY what I want. The offline features are nice, but I don't think the mainstream consumer is going to spend much time tweaking the offline features.
As for the question of whether the Interchange model will actually work for publishers, about the closing thing we have to compare right now is Prodigy, which offers up a similar model for some of its newspaper offerings. One example would be TimesLink, the online electronic offering from the Los Angeles Times. It has been heralded by some as the best online news publication. TimesLink costs subscribers $6.95/mo. if they only want TimesLink. Prodigy members can add TimesLink for an additional $4.95/mo.
This week, TimesLink announced it had reached the 20,000 subscriber mark after only 8 months. Ironically, last week I said that the Star-Tribune would probably be considered successful with a relatively small 20,000 subscriber base. But I don't know if the TimesLink announcement bodes well for the Star-Tribune. If a major paper like the The Los Angeles Times takes 8 months to hit 20K subscribers, it might take quite a bit longer than that for the Star-Tribune. Time will tell.
In our second installment of More Fun With Numbers we stay on the track of "unique users". This time, we turn our attention to the grand-daddy of online services, the H&R Block owned CompuServe.
The H&R Block reference is especially meaningful here, because the one thing you have to count on (and I mean HAVE to count on) is that H&R Block knows, well, how to count! Doing taxes represents quite a bit of their business. Though increasingly that is diminishing. In fact, last quarter, the CompuServe unit outpaced the tax unit for the first time ever.
CompuServe's pretax earnings for the fiscal year ending April 30, 1995 were up 46.7 to $150.1 million. Overall earnings actually fell in the 4th quarter, mostly due to the $101.9 million purchase of Spry Inc. The CompuServe financials look pretty strong, and it looks like the CompuServe Network Services is doing some pretty healthy business as well (separate from the online portion of the company). But I didn't come here to write about that.
I came here to write about CompuServe's 3.2 million alleged subscribers. The numbers from all of the services have been questioned, but you'd figure, again, that an H&R Block company would know how to count. So, I asked CompuServe how they counted their 3.2 million subscribers. And this is what they told me:
I got a tip from a couple of industry insiders that CompuServe was counting a boatload of Nifty-Serve accounts. I have to be even more honest. Six months ago, I had no idea what Nifty-Serve was. If you'd have asked me, I would've guessed that they were a franchise specializing in $29.95 oil changes. In fact, Nifty-Serve is an online service company in Japan. Recently, Nifty-Serve announced that they'd gone over the 1 million customer mark. But, it is fairly well understood among industry analysts that Nifty-Serve counts every subscriber they ever had, whether they are still active subscribers or not. And that's where part of the problem with the CompuServe numbers come in.
Interested in the 890K customers in the Pacific Rim, I asked CompuServe's Michelle Moran how many of the 890K were Nifty-Serve customers. As it turns out, most of them. According to Ms. Moran, 865K out of the 890K are Nifty-Serve customers. CompuServe it would seem counts ALL Nifty-Serve accounts in their subscriber totals.
While it may be true that they do generate revenue from each Nifty-Serve subscriber, this is a royalty based revenue. CompuServe helped with the design of the Nifty-Serve system, so presumably, Nifty-Serve pays CompuServe a royalty. In that respect, the CompuServe/Nifty-Serve relationship is similar to the AOL/eWorld relationship. AOL licensed its software technology to eWorld. The more customers that eWorld gets, the fatter the royalty payment to AOL. But AOL doesn't count the number of eWorld subscribers in its subscriber totals (yeah, I know it's not as if it would inflate the numbers a great deal, but...)
Arguably, there are not 865K paying and active Nifty-Serve subscribers. And even if there were, for CompuServe to count the Nifty-Serve only subscribers in the CompuServe subscriber totals is not an apples to apples comparison with the other services!
I'm open to a rebuttal from CompuServe and more than willing to print it in the newsletter. So come on CompuServe, tell us how many COMPUSERVE subscribers there are.
Conclusion: Without any International access, America Online has the biggest online subscriber base in the WORLD.
AMERICA ONLINE announced their own plans that will allow members to publish pages on the World Wide Web. Innovatively dubbed "My Home Page", the new service will let users anywhere on the Web view the AOL member's pages. And what are they calling the area where users will store their HTML and graphics files? "My Place". Sheesh, the naming convention here seems awfully Fisher-Price like(My First Web Page?). My Place will allow users to store up to 2 megabytes worth of files. AOL members will be given a free copy of the NaviPress Web authoring tool by Navisoft.
My Home Page and My Place will be available to users beginning next month. Prodigy, which announced a similar service in May, with plans to make the service available later in May has still yet to release the service. As of this writing, it's still in beta.
BOLT,BERANEK and NEWMAN stock surged to close the week up $10/share over last week on the news that BBN has teamed up with AT&T to provide a wide range of Internet services for businesses. The agreement is expected to generate at least $120 million during a three-year period for BBN Planet Corp., Bolt Beranek's Internet services subsidiary. The services will be offered in a few select markets on 8/1, with a national launch on 9/1.
--
PRODIGY- P2 In Stages? Prodigy's plans for a release of the much talked about and much demo'd P2 service by the first half of '95 are slipping away. But they seem to be releasing new things in stages. First there was the Web. Now, Prodigy has released a fully functional integrated e-mail client with a spell checker. The new mail program was released to subscribers using the Windows' version earlier this week. It is a very nice client in general and compared to what they had before, incredibly nice. But, this isn't P2 and you still can't do e-mail without closing out whatever you were already doing. And if you want to go from e-mail to somewhere else on the service, you have to get out of e-mail. A pain, and one that the "hip" crowd won't put up with, Mr. Bennett.
--
AMERICA ONLINE hopes to have an agreement for an Asian venture, according to a story by Reuters. "We hope to have an agreement by the end of the calendar year with one or more Japanese partners, Lennert Leader, AOL's CFO told Reuters after a speaking engagement at a Bear Stearns technology conference.
--
COMPUSERVE ANNOUNCED a good old fashioned way to bring folks to the Net. A scavenger hunt with over a million dollars in prizes. The hunt, which will take place on the Web begins on July 14 and runs through October 27. For more information, check out CompuServe's Web pages at: http://www.compuserve.com .
--
AMERICA ONLINE anticipates 5 million members by the end of '96, according to VP of investor relations, Richard Hanlon in a story by Reuters. At the rate they are growing (3 million, "any day now"), it could be that Mr. Hanlon meant by the end of fiscal '96 (6/30/96) and not calendar '96. Hanlon also said AOL is expecting $140 million in revenues for the quarter ending 6/30/95. If they averaged 2.7 million users for the quarter, based on the most recent $/user figure (between $17-18/mo.), the $140 million in revenues sounds about right. Next they'll be pushing for a billion in annual revenue...Hanlon also said, speaking at a Piper Jaffray investment conference, that AOL expects to launch its European venture with Bertelsmann AG by late November or early December '95.
--
EUROPE ONLINE, licensing AT&T's Interchange software client has bumped its launch from summer '95 to fall '95 for Germany, France and Britain. The bump will likely pit Europe Online and the AOL/Bertelsmann venture head to head for new business. CompuServe is already available in Europe. Microsoft Network plans international availability from day one (still scheduled for August 24th), but it will take Microsoft some time to build a base of Windows '95 customers and there will not be a version of MSN for Windows 3.xx.
--
NETSCAPE STOCK OFFERING. With a slew of investors already owning stakes in the company, Netscape Communications Corp, which has yet to generate much revenue, filed with the Securities and Exchange Commission for a proposed IPO of 3.5 million shares. A stock price was not disclosed, but Netscape officials expect the stock to be offered in mid August. Keep your eye on the "Short Takes" section. In May, Spyglass Inc., who owns the license for commercial distribution of NCSA Mosaic via their "Enhanced Mosaic" product, announced their own plans for an IPO of 2 million shares. At the time of the announcement, it was expected that the Spyglass offering would be priced between $11-$13/share. I haven't seen word yet as to when the Spyglass shares will be offered. We've watched them battle it out in the Browser market-and Netscape seems to be killing 'em (granted, all but giving away their browser played some part in that). Now we'll get to watch them do battle on the market.
--
NEWT SAYS: COMMUNICATIONS DECENCY ACT is unconstitutional. Love him or hate him, give the guy credit-he's trying to make sure that any measure similar to Sen. Exon's proposal dies a miserable death in the House. He basically slammed Exon's bill during his weekly cable show, "Progress Report". Separately, Rep. Chris Cox (R-Calif) and Rep. Ron Wyden (D-Ore) are planning to co-sponsor a house bill that would thwart any measure to curb content on the net. Cox and Wyden favor industry standards and technology solutions rather than censorship. Hmmmm..perhaps Microsoft has a strong lobby? They have planted themselves firmly on the technology (software) side of this issue...
--
MY ONE SHORT TAKE FOR THE WEEK: Check out "c|net central" television's new Web site, c|net online. I liked it! (Disclaimer, I like just about anything that has a Dvorak column!). It's at http://www.cnet.com .
This Last 52 52
Week's Week's Week Week
Company Ticker Close Close High Low
------- ------ ------ ------ ------- -------
America Online AMER $42.00 $37.31 $48.13 $13.75
Apple AAPL $48.75 $43.88 $50.94 $24.63
AT&T T $52.88 $52.00 $55.88 $47.25
Bolt,Beranek & Newman BBN $28.25 $18.25 $30.00 $10.00
General Elec. GE $57.13 $57.38 $59.25 $45.38
H&R Block HRB $41.88 $38.38 $47.63 $33.00
IBM IBM $98.63 $92.63 $99.25 $54.50
MCI MCIC $20.25 $19.63 $25.88 $17.25
Mecklermedia Corp. MECK $34.25 $32.00 $38.25 $ 4.25
Microsoft MSFT $91.13 $86.88 $92.38 $46.88
Netcom NETC $24.13 $24.13 $31.75 $16.75
News Corp. NWS $22.88 $22.38 $24.31 $14.38
Performance Syst. Intl PSIX $15.25 $13.63 $16.00 $12.00
Sears S $58.63 $57.50 $59.13 $43.50
UUNET Technologies UUNT $26.75 $24.50 $28.50 $21.75
If you forward this information along to friends, colleagues, etc., please forward on this subscription information as well. To
subscribe:
Send an e-mail message to: LISTSERV@CLARK.NET In the BODY of the message type:
SUBSCRIBE ONLINE-L FIRSTNAME LASTNAME
Example: Subscribe Online-L Robert Seidman
If you wish to remove yourself from the list please DO NOT reply to this message -- send an e-mail message to: LISTSERV@CLARK.NET with the text SIGNOFF ONLINE-L in the body of the message.
See you next week.