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============================================================================= Seidman's Online Insider ============================================================================= Weekly Summary of Major Online Services and Internet Events ----------------------------------------------------------------------------- Vol. 2 No. 48 (Formerly known as In, Around and Online) December 17, 1995 ============================================================================= Copyright (C) 1995 Robert Seidman (robert@clark.net). All rights reserved. May be reproduced in any medium for non-commercial purposes as long as it is reproduced in its entirity. IN THIS ISSUE ============= -Notes from the Editor -The Big Lie -Censorship? -Prodigy Loses Appeal -This and That -Stock Watch -Disclaimer -Subscription Info Notes from the Editor ===================== Correction: Last week I incorrectly reported that America Online averages 70,000 messages to the Newsgroups each day. The correct figure is 10,000. As expected, Microsoft and NBC forged a deal for an all news cable channel. The opinions of the analysts have run from "big deal" to "this is the single biggest thing to happen in the history of mankind". The truth is, much like the MCI/News Corp. announcement that came months ago, the biggest news for now is the announcement itself. The new channel probably won't be running for several months, and even then, it will only be in 20 million or so homes. We'll follow this story in the coming weeks. Happy Holidays! The Big Lie =========== 1995 was the year of the "big lie", and I'm not talking about Windows 95. I'm talking about the World Wide Web. Yep, folks, the Web is the big lie. I kept putting this piece off. I hoped that if I waited it out just a bit longer that the big lie would become a reality. I wanted it to be the truth. Someday it will be, but that someday won't be today, tomorrow, next week, next month or probably even next year. Someday. Don't get me wrong, the potential of the Web is enormous, it just hasn't grown into the mainstream yet. Recent studies would lead you to believe otherwise. I've repeatedly questioned those studies, but I was optimistic when I learned the highly respected Nielsen would be doing a study in conjunction with Commercenet. When I saw the initial "free" results from the Nielsen/Commercenet survey I was not so optimistic. Not to be over dramatic, but every fiber of my being said: "No way, these numbers are too high!" It doesn't take an advanced degree in statistics or logic to figure it out. You would think that if there were really 18 million adults using the Web on any kind of a regular basis, that someone would be making some big dollars off subscription services on the Web. Today, Dow Jones boasts (yes boasts) that their most excellent Web site at <http://update.wsj.com/> has 150,000 registered users. Not a bad figure, right? Wrong. It's a pretty sad and pathetic figure if there are really 18 million surfers out and about. I've registered several times, and I'm sure I'm not the only one in that boat. When you have free services requiring registration and you forget your password and user ID, re-registering is a lot easier. But let's say that they have 150,000 unique people. That's 150,000 unique people for a damn good site that is FREE. FREE. Now it doesn't take a scholarly background to think, "Hmmmmm, if there are 18 million adults accessing the Web, how come Dow Jones can only attract eight tenths of 1 percent of the market with an excellent FREE service? How come, how come, how come? On Wednesday, the New York Time's Peter Lewis reported that the Commercenet/Nielsen survey was being challenged. Turns out that Vanderbilt professor, statistical guru and Net maven, Donna Hoffman, who initially endorsed the survey did a turn around when she got a look at some of the raw data. According to Hoffman in the Times story, the 4,200 individuals who were surveyed by phone included a disproportionate amount of older, wealthier, better educated types when compared to the population as a whole. Nielsen has stood by the survey, which is not surprising, but ultimately, you can't be wrong like that on the Net. It doesn't matter if their figures are still better than anything else out there (which they maintain) because the Net will force a correction. Remember the deal with the faulty Pentiums? Nielsen threw in some results that weren't in the preliminary results that also are questionable. Things like a market of 40 million adults use commercial online services like AOL and Prodigy. The Nielsen survey pegged AOL at 10.5 million users! AOL itself only counts 4 million subscribers, and I'm not ready to believe that there are, on average, 2.5 unique users per AOL account. Screen names perhaps, but not unique users. (Though America Online CEO Steve Case did recently predict that AOL would pass the 10 million subscriber mark in the next couple of years.) But let's get back to the 18 million on the Web. Insiders at Time Inc.'s Pathfinder site were telling me last summer (despite the 10 million hits business) that they estimated 200,000-250,000 unique individuals were using the free Pathfinder service. Better than the Dow Jones results, but when you consider that the Pathfinder content is much more mainstream than what can be found on the Wall Street Journal web pages, it isn't very impressive. If Pathfinder can only attract a quarter million out of 18 million while it's free, there is no business if they go to a subscription model. This is precisely why most sites on the Web haven't gone to a subscription model. There's no real money in it. I think the thinking for these sites has been like mine -- if they waited around a while, the big lie would come true. But so far, it hasn't. There aren't 18 million people accessing the Web. It isn't as simple as saying, "well, there are really only a million regular users of the Web, and Pathfinder gets a quarter of them!" I don't know how many people regularly surf the Web. I'd estimate 5-8 million with access and 1-3 million use it least semi-regularly, but that's just a slightly educated guess.) There are problems with not knowing the real numbers, and the truth is, with the way the Web works, 100% accuracy is damn hard, if not impossible. Sites like Pathfinder, c|net, Hot Wired, Techweb, ZD Net, etc. can make some pretty good guesses about their sites based on the data they have. But it is much more attractive to say "10 million hits" than it is to say, "a quarter million users". But that only speaks to specific site numbers, and that's misleading. These sites have a damn heavy interest in knowing what the true base really is. Let's say there are really even 10 million people surfing the Web regularly. If you're Time New Media and you can only attract 2.5% of 10 million users with all of the mainstream content freely available on Pathfinder, you have to stop and ask yourself this question: "Are we doing what we should be doing?" If there are truly 10 million people out there surfing regularly, the answer is clearly NO. On the other hand, let's say there were only 1 or 2 million people surfing regularly -- then it is quite a different story. While I think the shovelware model of just putting content from other mediums up on the Web is not the best way, when 30 million people really do start surfing, I might find out I'm wrong. The media plays a significant role here as well. The Web is the darling of the media, and the media drives opinion. Often, the wrong opinion. Don't get me wrong, the potential for the Web as a publishing medium is huge. But I think the reality today is that the potential for the broader Internet as a publishing medium is bigger. I don't have a fancy Web site, but thankfully, I don't need one. Even without it, I've grown the subscribers base of this newsletter from nothing to above 10,000 in a little over a year. Okay, that's not really such a big deal, I mean it is FREE. But here's the amazing thing: I DIDN'T DO ANY MARKETING. No ads, no disks in the mail, no shamelessly self-promoting press releases. Nada. For not having a brand name, I don't think it's too shabby. But enough about me. The big lie, in combination with the media attention, forces some "strange" business decisions. I can remember sitting in meetings at IBM discussing various strategies. We're developing a product that will be available via e-mail or the Web. I anticipate that most subscribers will choose e-mail. There is huge group of business people that use e-mail as part of their every day work lives. I don't think that can yet be said of the Web. However, some of my co-workers would disagree with me. They believe what they read. They believe we'll get much more usage via the Web. I hope they're right actually, because it is a much sexier product via the Web. But, ultimately, I think they're wrong. The truth is, it doesn't matter. Even if I felt that less than 1% of our potential market would use the Web version, I would recommend spending big bucks for the design, development and presentation for a nice Web version. Why? Because if you don't have a Web version the media will crucify you. If you do have a Web version and it isn't sexy, the media will crucify you. When you want to make money, the last thing you want is the Wall Street Journal or the New York Times telling the world that your product sucks because there's no Web version or because your Web version isn't any good. It doesn't matter whether you really anticipate much Web traffic or not, you're forced to play by the rules of the big lie. Recently, a writer in the UK contacted me for a piece on wishes for Christmas and the new year. They asked me to pick a technology thingamjiger that I most desired and for my 96 wish for something related to the Net in general. I wished a T-3 for myself and for some good, honest, reliable Internet numbers in '96. Many decisions have been based on the hype of '95. Last week AOL's Steve Case told me he predicted some disappointments in '96. Brace yourself, because he's right. Censorship? =========== "There are four million words in the English Language and there are seven you can't say on television." -- George Carlin. I remember the first time I heard that. It was 1972 and I was 10 years old. I assure you that I know those seven words as well as I know the seven ingredients of a McDonalds "Big Mac" (for you doubters: two all beef patties, special sauce, lettuce, cheese, pickles, onions and a sesame seed bun.) You'd have a hard time convincing me that hearing Carlin's monologue on the seven words you can't say on TV had a bad affect on me. Earlier that year I was hit by an Amoco oil tanker. I assure you that had a much more profound impact on me. We have some major doings in congress this year. The first major telecommunications reform in some time. There's a whole lot at stake, too. Cable getting into the telephone business, allowing the local Bell companies to compete in the long distance market, and a slew of other stuff. Sandwiched in between all of that stuff is a little bitty provision with some big impact. That's really always been my beef with our congressional system in the USA. I mean, they try to do so much in one bill and then they politic over the various components. It's wacky. Anyway, the issue that many people are concerned about is censorship on the net. Some people don't want congress deciding ANYTHING. First amendment and all that. I don't feel that strongly on the issue. Congress could pass a law that specifically said, for example, "anyone knowingly transmitting pictures of women under the age of 18 engaging in sexual acts will have their genitals surgically removed (without any anesthetics), be fined a billion dollars, and spend two years in the stockade." I could live with a law like that. I think most people could. The problem is that the provisions regarding this issue aren't that specific. Anyone knowingly transmitting "indecent" material that could be viewed by minors would be subject to up to two years of prison and up to $100,000 in fines. Initially, the provision only covered material that was "harmful to minors". Indecent is a scary term. I mean, I've put out almost 50 issues of this newsletter this year. Some of them were not very decent. Were they therefore indecent? In some people's minds, they no doubt were. That's pretty damn scary. I mean, I'd really hate to pay $100,000 fine on a newsletter I give away for free! Jokes aside, who decides what is indecent? Each of us. Each of us has different views on what is indecent and what isn't. Indecent is not specific. Almost everyone who loves the Net is against such legislation. Again, I'm not against "any" such legislation (see example above), but this legislation I'm against. The Net isn't taking the legislation sitting down. Awareness campaigns, rallies, heated debates. Wired magazine helped organize a rally in San Francisco last week. "The crowd was energized, the speakers were enthusiastic, and this demonstration helped focus attention on the importance of protecting free speech on the Internet," said Todd Lapin, an event organizer and an editor at Wired. "We're excited to know that the event sparked similar protests in Seattle, New York and Austin," Lapin continued, "It shows that the online community is ready to get out from behind their computers to make their voices heard." Unfortunately, such efforts probably won't be enough. The House and the Senate seem to agree with this particular provision. Since there are some issues within Telecom reform they can't agree on, the "indecent" issue seems to be a pretty sure thing. It will be interesting to see how this holds up if signed into law. There is no doubt in my mind that someone will deliberately test such a law to bring increased attention to the law (and probably to themselves, too. Hey, I'm a realist.) Prodigy Loses Appeal ==================== Well, with a title like that, I could go in several directions with this piece, but I'm speaking about the appeal against the ruling handed down by New York Supreme Court judge Stuart L. Ain. Ain ruled in May that Prodigy acted as a publisher, and therefore could be sued for libel. Brokerage firm Stratton-Oakmont sued Prodigy for $200 million based on accusations against Stratton-Oakmont and its CEO that were anonymously posted on Prodigy's Money Talk bulletin board. In October, Stratton-Oakmont dropped the suit and Prodigy issued an apology of sorts. Prodigy wanted to reargue the original decision and Stratton Oakmont didn't object. This week Ain upheld his original decision that Prodigy could be held libel. It should be noted that unlike some systems, Prodigy actually has several "control" mechanisms for the bulletin boards (ranging from filters that weed out curse words to moderators who at times censor messages.) According to Reuters, Ain, in his ruling said he upheld his original decision because, "..The court finds that this is a developing area of the law so that there is a real need for a precedent." This is bad news for online services and it is unclear what the impact on the Internet newsgroups is. We live in a very lawsuit happy society, and it is quite possible that the online services could become bogged down in costly lawsuits. Meanwhile, we industry watchers are waiting to see if Stratton-Oakmont decides to reinitiate its suit. Stay tuned... This and That ============= DIGITAL EQUIPMENT CORP has one of my favorite Internet commercials (I think whoever wrote it reads my newsletter! Okay maybe not. It's the one where there's a voice in the background reading various quotes about the Internet and in the end they say something like, "Nobody really knows where this is going..." Now they just may have the best search engine on the Web. I tried it, I liked it. If you're a searchin' fool, you'll want to try it too. Beta test it at <http://www.altavista.digital.com/>. --- BEST NET GIFT IDEA! Mercury Mail, who recently began selling a stock quote service that contained news briefs on the tickers in your portfolio, now brings us a great Net gift idea. You know those "Quote-A-Day" style calendars? Mercury Mail recently announced "Quotes and Anecdotes". Now you can send friends, loved ones, (or even enemies, hey it's your dime) a quote-a-day by e-mail (though Saturdays and Sundays are usually combined). There are at least 15 Calendars to select from ranging from Robert "All I Need to Know I Learned In Kindergarten" Fulghum to the Politically Incorrect, to ESPN's Chris "I'll Never Be Your Beast of" Berman's Names calendar to the Best 1,001 Sex Secrets Every Man should know. It's the gift that keeps on giving, at least for a year. Check it, and the other stuff Mercury Mail has to offer, out at <http://www.merc.com/> -- AOL LAUNCHES KIDS ONLY VERSION. Aimed at children 12 and under, AOL now allows parents to block access to everything on AOL except its revamped Kids Only area via its Parental Control feature (keyword: PARENTAL CONTROL). There are chat rooms, but they will be monitored. For the truly lecherous who are into kiddy porn, I sort of wonder if this won't make it easier for them (hey look, we rounded up all the kids and put them into one place for you), but time will tell. Otherwise AOL did a very nice job with this except that the kids won't be able to access some basic components like news. -- YOU DIRTY RAT! Taking a different approach to the "smut" scene, a company called Charles River Media has launched its "Internet Watchdog" product. Watchdog takes a different tack than products like Surf Watch. It will let you go anywhere you want, look wherever you want, etc. Here's the catch, it records your every move. Authority figures like parents, teachers or employers can than go back and see what you've been up to. They'll know if you've been bad or good... -- ZIFF-DAVIS teamed up with Yahoo! to partner on its ill conceived (at least to me) quarterly magazine, Internet Life. Now it will be Yahoo! Internet Life. I think this is a great deal for Yahoo who is now partnering all over the place with major brands (like Reuters). For Ziff-Davis, it begs the question: Why? The people who'll actually BUY the quarterly publication (complete with CD-ROM) will likely be people who've never been on the Net before (those with access can access most of the Content of the magazine for free via the ZD Net site at <http://www.zdnet.com/). For those people, how much good is the Yahoo! brand going to do Ziff-Davis? -- YEAH I KNOW... I still haven't given broad coverage to the international market. With AOL launching several weeks ago and Europe Online launching last week, the issue is sure to get more coverage in the coming weeks. I don't think the market there can ever be as big as in the USA without some major telecom reform. We're spoiled in that we can make as many local calls as we want for a flat fee. That's not the case most everywhere else on the planet. -- VISA AND MASTERCARD have seemingly made amends and agreed to a unified specification for secured commerce over the Internet according to this week's PC Magazine. According to the report, the specification will be delivered sometime in the first quarter of '96. -- YOU'RE A MEAN ONE, Mr. Grinch. Hey, what are the holidays without a dose of the Barking Dogs and the Grinch? Well, we've all heard the barking dogs, but how about a Pot Bellied Pigs version of the Christmas classic, Jingle Bells. You think I'm kidding? Check out <http://www.conline.com/pigsongs/>. And if you never found out how things ended down in Who-ville you might want to visit <http://www.webb.com/grinch/story1.html/> Stock Watch =========== Notes: Sun Micro results reflect 2-1 split. This 1 Week 52 52 Week's Price Week Week Company Ticker Close Change High Low ------- ------ ------ ------ ------- ------- @Net Index IIX $225.16 ($17.11)$259.85 $185.76 America Online AMER $37.88 ($3.25) $46.25 $11.69 Apple AAPL $35.25 ($4.13) $50.94 $33.63 AT&T T $68.00 $1.87 $68.50 $47.63 Bolt,Beranek & Newman BBN $41.38 ($1.62) $48.75 $12.75 CMG Information Svcs. CMGI $80.00 ($2.75) $100.50 $11.00 FTP Software FTPS $32.25 ($2.25) $40.63 $20.25 General Elec. GE $72.38 $2.00 $72.50 $49.13 H&R Block HRB $42.25 ($1.50) $48.88 $33.38 IBM IBM $90.25 ($6.63) $114.63 $69.88 MCI MCIC $26.13 ($0.56) $27.38 $17.38 Mecklermedia Corp. MECK $16.00 ($1.00) $24.38 $2.63 Microsoft MSFT $88.38 ($6.12) $109.25 $58.00 Netcom NETC $52.00 $1.00 $91.50 $17.25 Netscape Comm. Corp NSCP $130.50 $2.00 $174.00 $45.75 NetManage NETM $23.75 ($4.50) $34.00 $13.00 News Corp. NWS $22.75 $1.25 $25.13 $14.38 Oracle Corp. ORCL $43.38 ($3.25) $48.75 $25.41 Performance Syst. Intl PSIX $23.50 ($1.75) $29.00 $12.00 Sears S $40.38 $1.38 $40.75 $21.81 Spyglass Inc. SPYG $93.25 ($4.75) $121.00 $26.50 Sun Microsystems SUNW $43.81 ($6.07) $51.17 $14.95 UUNET Technologies UUNT $59.25 $4.25 $98.75 $21.75 Disclaimer ========== I began writing this newsletter in September 1994, at the time I was working for a technology company that is now owned by MCI. In March, I began working for International Business Machines Corporation. As of July, my management has agreed to allow me to do some work on the newsletter during business hours (probably about 6-8 hours a week). I speak for myself and not for IBM. Subscription Information ======================== To subscribe to this newsletter by e-mail: Send an e-mail message to: LISTSERV@PEACH.EASE.LSOFT.COM 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 this mailing list, send a message to: LISTSERV@PEACH.EASE.LSOFT.COM and in the body of the message type: SIGNOFF ONLINE-L . A Web version of the newsletter is available at: <http://www.clark.net/pub/robert>.