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============================================================================= Seidman's Online Insider ============================================================================= Weekly Summary of Major Online Services and Internet Events ----------------------------------------------------------------------------- Vol. 3 Number 22 June 2, 1996 ============================================================================= Copyright (C) 1996 Robert Seidman (robert@clark.net). All rights reserved. May be reproduced in any medium for non-commercial purposes, so long as attribution is given. IN THIS ISSUE ============= - Important Note! - Publishing on the Net (The Story of In, Around and Online) - Update On AOL Growth Slowdown - Pacific Bell Announces Internet Service - Update to CompuServe "Red Dog" Shift To Web - Newsworthy Notes - Stock Watch - Disclaimer - Subscription Info IMPORTANT NOTE! =============== Well, it's been several months since the gravity got the best of my ThinkPad, but I've once again experienced some technical difficulties. This time, it was "just one of those computer things that don't make any sense at all." Not even to a geek like me. On Thursday morning, I opened Eudora and my in-box came up with no messages. I always like seeing my in-box empty, because it is something that doesn't happen very often. The only problem was that I distinctly recalled having about 150 messages in my in-box. I couldn't tell you what happened or why, but I can tell you that I lost all 150 or so of those messages. If you sent me something needing a reply in the two weeks or so preceding Thursday May 30, and you haven't already received a reply, your best bet is to resend. Thanks! Notes from the Publisher ======================== Web Review may be going through hard times, but I'm here to tell you that there is a model for publishing on the Internet. It can work. It can succeed, and yes, you can even make money at it, if that's what you truly desire... -- Over time I came to the conclusion that I really liked this newsletter gig. The biggest problem I had was that I really liked my job, too. So I poured pretty much all of my energies into work and newsletter. End result: not much sleep, no time for a life and, well, I was pretty grouchy in the morning. I knew that couldn't last. I also knew that as much as I loved my job, that in the end, if I had to choose between job and newsletter the newsletter would win. So, last Fall I began exploring the possibilities. There were several options (business models, if you will) that I could pursue. There was an advertising supported model, a subscription model, I could align with a real life publisher or some combination of the options. Though for a niche publication, the newsletter has a lot of eyeballs and some of those are the type of eyeballs that have access to the corporate checkbook, the advertisers weren't thrilled that the majority of readers were reading the newsletter in e-mail. I could've made a nice little stream of money that would allow me to buy computer toys and perhaps pay for a really nice vacation, but it wouldn't allow me to quit my day job. Since I wanted "time" more than money, this option didn't appeal to me. The subscription model was and is interesting, and perhaps someday there will be a more "in-depth" newsletter that is based on a subscription model. Morgan Stanley analyst Mary Meeker suggests in the Internet Report that if 10,000 subscribers would pay $20/yr. for my newsletter then presto, I've got $200K/yr. in revenue for something that takes about 20-25 hours a week of my life. Not bad. Not bad at all. Unfortunately, at the time she wrote that, that pretty much assumed that everyone of the subscribers to this newsletter would pay $20/yr. I believe that 90% of you reading this would go away if I charged anything at all. Then there are 10% of you who would pay something ranging from $1.00/yr. to $1,000/yr. If you assume that 1,000 people would pay $20/yr., then that's also a nice little revenue stream that will allow me to buy computer toys and take a really nice vacation and even pay for some other nice stuff. But, it wouldn't allow me to quit my day job either. Now, if 500 people would pay $300, and at this point, I think I could actually pull that sort of thing off, I'm looking at $150,000 a year for 20-25 hours a week of work. That would be really nice, and it would definitely allow me to quit the day job. But then I'd be writing for 500 people, and I sort of like that there are over 14,000 addresses on my mailing list now (what that translates to in terms of actual people is hard to say because some people are on the list multiple times and some addresses on the list are in fact distribution lists themselves.) But a lot of what I learn and a lot of the fun that I have is derived from the the access I have to a lot of people. If I go exclusively with the subscription model, that well dries up and I didn't want that. If I ever go the subscription route, I would want to have as many folks reading this free newsletter as possible. For my own part, other than word of mouth, I have done no marketing of this newsletter -- not even messages in the newsgroups, for over a year. The list of subscribers has grown anyway, but if I'd worked at it, even just a little bit harder, I think I could've had more readers. Many of you have suggested to me in e-mail that I charge like a dime an issue and sell them either as subscription or a la carte. Now if 20,000 people a week were willing to pay a dime on a subscription or a la carte basis, this would be something interesting to consider, except for one thing -- the administrative overhead and costs of actually processing the payment transactions would make this option a money loser. I don't think a low cost a la carte option, for self-publishers like myself will ever be a viable source for primary income. Perhaps at some point it makes for a nice incremental revenue stream, but even if you're a big, big, big name writer, this just doesn't seem the way to go today for a primary source of income. The good news is that in spite of all the hype, and the follow-up hype about "how it's all hype," the Internet _is_ an amazing thing. When you consider that I even had the opportunities to choose between various models which would allow me to continue with the newsletter, that should give you an idea of just how amazing it is. Two years ago, I was just a guy with a computer in his bedroom typing something up once a week and sending it out via the Internet. The reality is that besides having the computer in a loft now, not much has changed. But I feel very, very fortunate. I also feel like I have the Internet (and you!) to thank for that. For me, ultimately it came down to doing a fairly high dollar subscription newsletter or aligning with a publisher. In the end, I chose aligning with a publisher. I did so because it satisfied all the requirements. I could quit my day job, the newsletter would get a lot more exposure, and I would have a lot more time to work on the newsletter. I'm pleased and very excited to announce that I will soon be joining CMP Publications as "Editor-at-Large" for NetGuide magazine. My responsibilities will be a monthly column in NetGuide, some columns for the Web site, whatever else they tell me to do, and most importantly, this newsletter! What this means for you is that you still get this newsletter for FREE!! What this means for me is that I'll have a lot more time to work on the newsletter and not have to worry about how I am going to pay the rent! From my point of view, this seemed like a real win-win sort of deal, and I like it when everyone wins! This also means the newsletter will have a real copy editor. Even the grammar police win! We still have to work out exactly how things are going to flow, and it may mean that the newsletter is no longer distributed on Sundays, though there will be a regular distribution schedule, whatever it is. And there will likely be a "brought to you by NetGuide" or some such banner, but other than that: Same as it ever was... I'd like to thank IBM for allowing me to continue with the newsletter during my employment. A special thanks to all I worked with on the infoSage project, it was a lot of fun. Special thanks also to c|net, especially Halsey Minor, Kevin Wendle and Chris Barr for giving me the opportunity to be a columnist there. Unfortunately I can't keep the column on c|net, but I wish them the best of luck (especially with the IPO coming up!) More details to follow... Update On AOL Growth Slowdown ============================= Nothing much AOL does surprises me. The browser love triangle with Netscape and Microsoft surprised me, but it made sense. This week AOL did something that surprised me though. They kind of played down or "soft announced" reaching the six million subscriber mark. AOL had been announcing subscriber growth in 500K increments, but earlier in the year they said they'd only be making announcements at intervals of a million. Last week I stabbed in the dark to say that they'd announce 6 million on 5/29. In fact, they buried the 6 million announcement in a press release on 5/28 regarding the deal with Pac Bell (see below) as a small reference at the end of the release. AOL press releases always mention the size of their subscriber base near the end, and there it was, "America Online, Inc., (NASDAQ Symbol: AMER), based in Vienna, Va., is the largest and fastest-growing provider of online services in the world with more than 6 million members." This was the first time I'd seen them use a new subscriber figure without actually announcing the new number first. This is only surprising because typically they would've done a separate press release. I was beginning to think that they didn't want to draw any attention to themselves, but then on 5/30, they did "officially" announce the 6 million mark, but even that was bundled with an announcement that they'd one PC Magazine's "Editor's Choice" award. But the bottom line is whether it is 5/28 or 5/29 they're still poised for pretty good growth, even if, not surprisingly, they couldn't keep up with the post holiday new PC boom. In related news, America Online announced that the German AOL joint venture between America Online and publishing giant Bertelsmann had reached 100,000 subscribers. According to America Online, these subscribers are NOT counted in the 6 million subscribers for the US service. Bernd Schiphorst, who had served as CEO of AOL Europe since April 1995 was promoted to executive vice president for Bertelesmann's multimedia efforts. Schiphorst will be replaced at AOL Europe by Heinz Wermelinger, who had previously been VP of marketing for the joint venture. Meanwhile, CompuServe is still reporting "more than 4.7 million subscribers worldwide" which means they haven't reported any growth in a LONG time. And remember that CompuServe counts about a million "Nifty-Serve" affiliate accounts. AOL's 6 million does contain "trial accounts". AOL's GNN service is still reporting "more than 200,000" subscribers (which means it hasn't grown very much when you consider it went from 0 to 200,000 from about November 1 to sometime in March.) Sources at CompuServe's Internet division say that its SpryNet service has more than 140,000 subscribers. AT&T last week announced it had received 600,000 requests for WorldNet software of which it had distributed 300,000. Of the 300,000 kits sent, AT&T is reporting that 150,000 have converted to subscribers (keep in mind that if you're an AT&T customer, you get 5 hours free through the end of the year, so I'm not sure how big of a deal that is. Still 150,000 accounts in 9 weeks isn't bad!) In April, Netcom reported it had hit the 400,000 mark and while it is still the king of the ISP hill, that landscape may change soon... PACIFIC BELL OFFICIALLY ANNOUNCES INTERNET SERVICE ================================================== Pacific Bell officially announced the availability of its Internet service in California. There is an unlimited plan for $19.95 a month. A "Carefree Access Pricing" (I am NOT making this up!) plan which is $14.95 for 20 hours, with additional hours being $.50, up to a maximum of $19.95 a month. There is also a "Basic Access Pricing" plan at $9.95 for ten hours with additional hours costing $1. Pacific Bell said the service would be immediately available in 75%-80% of the state, which must scare the heck out of Netcom, who has a substantial percentage of its 400K subscribers in California. Additionally, Pacific Bell said it had signed a letter of intent with America Online to make AOL available to its customers at a reduced rate. No pricing details were given. Pacific Bell is the first regional Bell company to announce a deal with AOL. Over 2 months ago, AT&T announced a similar arrangement to offer WorldNet customers America Online at a discounted rate, but pricing for that agreement has still not been announced. Access is quickly becoming a commodity and we can look for the access companies like Netcom, PSI, and even GNN to consider selling to the highest bidder before getting wiped out... Update to CompuServe "Red Dog" Shift To Web =========================================== I received a lot of e-mail on the piece about CompuServe's shift to the Web. Unfortunately, I lost almost all of it (oh well!), but I did read most of it, even if I didn't respond to it. So, I'll respond here. I think regardless of what CompuServe is saying they will not pour serious development dollars at their proprietary interface. Even though they are saying that the announcement in no way means they're giving up support for CIM, giving up support and spending lots of money to make it better are two very different things. It will be around as long as there is demand for it. Translation: They are going to let it die slowly. The challenge for CompuServe will be how to leverage today's Web for the very thing that has made CompuServe so successful for all these years -- the message forums. Today, things are getting a lot better, but let's face it the Web is still not the best place to do message forums -- it wasn't designed to do that. Sure, CompuServe could ask its subscribers to download another application to do "forums", but one of the reasons AOL and CompuServe are successful is because their software is all a new user needs to get going. More experienced users may not mind downloading and configuring additional pieces of software, but that's not something most new users want to deal with. Even bringing up a separate application that is automatically installed makes the experience more difficult. Some people took my piece to mean that CompuServe was shifting to the Web as a FREE service. Get outta here! Though they may make some content available for free, all they're really doing is offering another platform for their SUBSCRIPTION service. As I mentioned, CompuServe too may move to reduced pricing a la MSN, and soon to be AOL, if a user is coming in from an outside ISP. But it will definitely be a subscription based service. As for all the notes I received on aggregation on the Web in general, I have been saying since 1994 that once Web sites begin charging for access that I think aggregators will succeed. Why? Because I don't think most people will want to put a dollar here and a dollar there and their credit card here and their credit card there to get content. Some people surely will like that approach, but in the mainstream, end users will probably find (short of the sites remaining FREE) aggregators a more convenient method. It's still too early to tell how, if, and when subscription Web sites will be a successful model, but it will be interesting to watch them in relation to aggregators like CompuServe, MSN, Prodigy and ultimately America Online. If you're a subscriber to the Interactive Wall Street Journal, there's a great column this week from Walter Mossberg on the convergence between online and the Web which touches on the aggregation issues. Subscribers can see it at: <http://interactive.wsj.com/edition/current/articles/SB833409815466399000.htm> Newsworthy Notes ================ NETMANAGE ANNOUNCED PLANS to implement Sun Microsystem's Java language into both its e-mail and newsreader software clients. Netmanage's first implementation of Java will be in its free WebSurfer Web browser. For more info, see < http://www.netmanage.com/ >. -- MCI and MICROSOFT ANNOUNCED they are collaborating on a standard for delivering audio and document conferencing services over the Internet. The services will be provided through Microsoft's new NetMeeting communications and collaboration software ( currently in beta at < http://www.microsoft.com/ie/conf/ >.) NetMeeting "will make audio and document conferencing via the Internet as easy as a phone call, and workgroup collaboration as effective as being in the same room," according to the press release. Well, I think they have just a little ways to go before it's THAT easy...but then again, they didn't say WHEN they would make it do this. -- BROWSER WARS CONTINUED! The first Win 95 and NT versions of the beta for Microsoft's 3.0 version of Internet Explorer at < http://www.microsoft.com/ie/default.htm >. Active-X now, Java in the next version of the Beta. Capability for handling Netscape plug-ins is not yet built in either, but reportedly coming soon. c|net liked this browser ("After two tepid releases, Microsoft now has a white-hot Navigator-killer on its hands." I like it too, though I don't know about the white-hot part yet. I do know it's not nearly the resource pig the beta 3.0 version of Netscape is. Still, not to be bested, there's a new version of Netscape's 3.0 (beta 4) at < http://home.netscape.com/ >. -- ADS ON AOL KICKING INTO GEAR. This week on one of my daily visits to the New York Times area on AOL, I was greeted with something new -- advertisements! Lots of them, in fact. Three little banners per form, which if clicked, will take you to the advertisers Web site. With the new "streaming" graphics in the beta version of America Online, this was not annoying at all, and the graphics draw quickly over a 28.8 dial-up Internet connection. But this is the future, revenues derived from a mix of subscription fees (or subscriber time charges) and advertising. We'll look into how much of the ad revenue AOL gets, and how much goes to the content provider... -- YAHOO ON THE MOVE? Yahoo! And Ziff Davis are teaming up to form "Yahoo! Europe". The plan is to provide customized versions of Yahoo! based on geographic regions. The plan is to offer customized versions of Yahoo in Germany, France and the UK sometime later this year . A Japanese version of Yahoo was announced over a month ago < http://www.yahoo.co.jp >, and this is no surprise since the Japanese company Softbank owns Ziff-Davis and has a pretty good chunk o' change invested in Yahoo! -- iCAT < http://www.icat.com > AND OPEN MARKET announced a partnership that will that will combine the iCat Electronic Commerce Suite with Open Market's OM-Transact server. It sounds pretty good until you stop to consider THAT THERE'S STILL NOT A LOT OF DEMAND FOR SHOPPING ON THE INTERNET. Someday though, someday... -- FIDELITY INVESTMENTS ANNOUNCED plans to allow those who have 401K and 403B retirement plans with them to view account information and perform transactions via the Web. The the new service is part of its "Fidelity NetBenefits" program. It will be offered to corporate customers and their employees sometime during the third quarter. Fidelity's "WorkPlace Savings" site has been up since last fall at: < http://www.fidelityatwork.com >. -- THE NEW YORK TIMES reported that Mary Schapiro, regulatory chief at the National Association of Securities Dealers is concerned about the Internet being used as a medium to rip-off investors, according to the Times' story on Sunday. Though Schapiro seemed to think the Internet is a wonderful thing, she did express concern about the downsides. "My real worry about the Internet right now is that the medium is such that people who are intent on perpetrating a fraud can do it very quickly and very cheaply and to a vastly broader audience then they can utilizing the telephone or the mail," Schapiro said in the Times' story. -- THE U.S. SECURITIES AND EXCHANGE Commission soon plans to release a "no action" letter that will allow companies to facilitate trading of their stock over the Internet, Reuters reported. According to Reuters, on Friday, SEC commissioner Steven Wallman said the letter would be issued in "a week or so." Stock Watch for the Week Ending May 31, 1996 ============================================ This % 52 52 Week's Change Week Week Company Name Ticker Close 1 Week High Low ============ ===== ====== ===== ====== ==== @Net Index IIX $267.26 -2.1% $273.13 $185.76 America Online AMER $56.50 10.2% $71.00 $16.75 Apple Computer AAPL $26.13 -2.3% $50.94 $23.00 AT&T T $62.38 -0.8% $68.88 $49.88 BBN Corporation BBN $26.25 -5.8% $48.75 $16.88 CMG Information Svcs. CMGI $23.25 -11.4% $50.25 $5.63 CompuServe CSRV $24.75 7.6% $35.50 $22.50 CyberCash Inc. CYCH $59.50 -1.5% $64.50 $24.50 Excite Inc XCIT $16.13 -9.8% $21.25 $13.13 FTP Software FTPS $11.69 1.7% $40.63 $8.13 H&R Block HRB $34.88 -0.7% $48.88 $31.50 IBM IBM $106.75 -1.8% $128.88 $83.13 Lycos Inc. LCOS $15.38 -9.5% $29.25 $14.00 MCI MCIC $29.13 -2.5% $31.13 $19.38 Mecklermedia Corp. MECK $18.50 4.8% $24.38 $8.50 Microsoft MSFT $118.75 0.2% $120.00 $79.88 Netcom NETC $34.13 -13.6% $91.50 $19.22 NetManage NETM $16.88 -4.9% $34.00 $9.38 Netscape Comm. Corp NSCP $68.06 -7.9% $87.00 $22.88 News Corp. NWS $22.38 0.6% $25.13 $18.50 Open Market OMKT $31.75 -13.0% $42.28 $31.75 Oracle Corp. ORCL $33.13 -0.4% $36.66 $22.66 PSINet Inc. PSIX $14.50 -8.7% $29.00 $6.75 Sears S $50.88 2.3% $53.25 $27.16 Security First Bank SFNB $40.13 -0.3% $45.00 $34.75 Spyglass Inc. SPYG $27.13 1.4% $61.00 $13.25 Sun Microsystems SUNW $62.63 1.6% $64.13 $19.75 UUNET Technologies UUNT $59.75 -2.4% $98.75 $22.75 VocalTec LTD VOCLF $11.00 -7.4% $20.75 $8.50 Yahoo YHOO $28.00 -5.1% $43.00 $24.50 Disclaimer ========== I began writing this newsletter in September 1994, at the time I was working for a technology company now owned by MCI. In March 1995, I began working for International Business Machines Corporation. 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>.