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============================================================================= Seidman's Online Insider ----------------------------------------------------------------------------- Brought to you by NetGuide Magazine < http://www.netguidemag.com > ============================================================================= Weekly Summary of Major Online Services and Internet Events ----------------------------------------------------------------------------- Vol. 3 Number 25 July 7, 1996 ============================================================================= Copyright (C) 1996 Robert Seidman and CMP Media Inc. All rights reserved. May be reproduced in any medium for non-commercial purposes, so long as attribution is given. IN THIS ISSUE ============= - Clarification - Editor's Note - Free for the Asking Juno c|net PointCast Mercury Mail - Miscellaneous - Subscription Info Clarifications ============== Last week I inadvertently ran the following line: "Farcast also named SCOTT KURNIT, the former Prodigy#2 and former head of News Corp./MCI's aborted joint Internet venture." Kurnit was named to Farcast's board of directors. Last week there was a little piece called "The Check is in the Mail," which mentioned that the Microsoft/NBC MSNBC Web site went down, most probably (according to the Cowles/SIMBA Media Daily) for nonpayment of $100 registration fee for the domain name to the InterNIC. This piece drew quite a bit of feedback. Apparently, Microsoft wasn't at fault at all. It seems the InterNIC was having some accounts payable problems and cut off several sites that had actually paid. I received e-mail from several disgruntled sites who had been cut off even though they had paid, as well as the apology letters they had received from the InterNIC. Editor's Note ============= In light of the short week due to the July 4th holiday, this week you*ll find one big piece and a few miscellaneous items. I hope all of you in the United States enjoyed your long weekend! Free Content for the Masses =========================== In December 1994, Esther Dyson wrote a piece in the Release 1.0 newsletter on intellectual property rights. In the piece Dyson predicted the issue of intellectual property rights would become less important as free advertising-supported content began to proliferate. I'm just reading this now at : < http://www.edventure.com/release1/release11294/release11294.html >, because back in December 1994, I couldn't afford to spring for a subscription to Release 1.0. While I don't see eye-to-eye with Dyson on everything, the piece is still very much worth the read today (and now it's free.) As someone who has a "free" newsletter, Ms. Dyson's piece holds special meaning for me. I agree with many of the ideals espoused. But for those of you trying to figure out how to make money on the Web or Internet, this is a great frame of reference. Here's a brief excerpt from Dyson's piece: "Frustratingly to creators of content, the value of their work doesn't generally get recognized without broad distribution. This means that any artist or creator must somehow attract broad attention to attract high payment for copies -- which means you give the first performances, books or whatever away in hopes of recouping with subsequent works. But that very breadth of distribution lessens the creator's control. In principle, it should be possible to control and charge for such works, but it will become more and more difficult. People want to pay only for that which is scarce -- a personal performance or a custom application, for example, or some tangible manifestation which can't be easily reproduced (by nature or by fiat; that's why we have numbered lithographs, for example)." I doubt I could've written that myself, but for the past two years, I've lived it. This newsletter is on the "free" spectrum and early on I learned that the way to get broad distribution was to give it away. This discovery was serendipitous, since originally I felt like I was just posting a note to a newsgroup. Release 1.0, a printed monthly newsletter that has been around since 1982, is more on the premium (scarce) side. I'd hazard a guess that in less than two years this newsletter will easily have 10 times the distribution of Release 1.0, but Release 1.0 costs $595 per year. I'd estimate that Release 1.0 easily has more than 1,000 subscribers, and given that it's put together by a small team, it*s paying for itself. It also serves Dyson and associates well as a method to generate speaking/consulting/conference business. (Note: After writing this I read a New York Times Sunday Magazine piece on Dyson that confirms the above conjecture.) I'd definitely give the site a look, as the words there are well worth the time it takes to read them. Still, I was amused by this little note posted on the Web site: "Occasionally it makes sense to put materials into the public space to foster and participate in the discussion of important issues." Okay, I buy into that theory, but let's face it, the Web site is itself an advertisement. Why not just say, "Occasionlly it makes sense to advertise!" Still, Dyson is on the money. A year and a half later, and we're seeing Dyson's words regarding advertising supported free content ring true. This week, we'll examine 4 different "free" models. *Juno* Unlike the other models mentioned, Juno actually is providing a service and software for free. The deal is you get free e-mail software, a free e-mail account, and you can connect to pull/send e-mail at no cost. The catch? There are "multimedia" ads that get sent to you. While there are several companies offering or planning to offer free e-mail services, Juno < http://www.juno.com > is in the early lead. Earlier this week Juno announced it had signed up 100,000 subscribers to its free, advertising supported e-mail service. Juno has a problem, though. Unlike an AOL, CompuServe, or Prodigy where a $9.95 per month subscription translates into $9.95 in revenue, a Juno subscriber doesn't necessarily mean revenue. With an advertising-supported service like Juno, subscriber numbers mean nothing - usage is everything. If someone signs up for Juno and doesn't use it, there won't be any revenue. Juno will have to come up with creative ways to stimulate usage. If it doesn*t, it could literally have millions of registered subscribers and not make any money. But the first trick is getting the users, and Juno is hard it work on that. It recently announced it will begin distributing the Juno software to more than 6 million Marriott Honored Guest Awards and Marriott Miles program members; in return will run advertisements for Marriott. While Juno doesn't offer access to the Web, newsgroups, or other Internet features, it does offer the one true killer application: e-mail. Further, through its proprietary software, Juno has made advertising more compelling, both for end users and advertisers, by offering graphics. I believe Juno made a mistake, though, by doing everything via a private network. Had Juno offered access to pull e-mail (even with its own proprietary software) via TCP/IP, I believe it would already have much more than 100,000 registered subscribers. For one thing, assuming Juno stays in business, it offers a free e-mail address for life. This means you can change access providers and still keep the same e-mail address. The problem is, you can't use the service over an existing Internet connection. You have to dial into Juno's network. Some might not think that's a problem, but those of us with second phone lines (and we're growing) and unlimited Internet access for one low price really don't like to disconnect from our Internet connections for any reason. Seriously, though, I believe that TCP/IP connectivity provides a more functional service and would yield Juno more subscribers; I would not be surprised to see them offer this in the near future. *c|net* c|net is just one example out of the thousands of sites that offer content that isn't available anywhere except the Web. The original c|net site at < http://www.cnet.com > has become a well known Web brand name in less than a year. c|net's success may, in some measure, be a result of targeting a common theme among all users coming to its site - it uses computers. But c|net offers both specialized and mainstream content to target both the mainstream person as well as the more technical folks. As a former c|net columnist, I can say that the editorial staff is excellent and the company seem to be hiring top-notch editorial and writing staff on almost a weekly basis. The shareware.com and search.com sites also make a great deal of sense. While not technical marvels, c/net has aggregated net services in a way that is very useful and in ways that didn't cost very much. But for all that, c|net has one problem, you have to go to its site to get its content, or go through the trouble of downloading, installing, and configuring software like Freeloader or Web Whacker to pull the content automatically for you. I believe most people will not do this in general. If I am any example, even downloading and configuring the software is no guarantee that it will be used on a regular basis. I'm pretty sure the smart folks at c|net recognize that there are probably a lot more people that would be reading c|net content if they didn't have to go and pull it off the Web. I expect c|net will come up with a solution for this at some point. *PointCast* Ah, PointCast, the darling of the net. I'm a big fan of PointCast, available at < http://www.pointcast.com >. It is probably one of the most compelling applications out there. PointCast "delivers" information based on a simple profile an end user fills out. The presentation, with scrolling stock tickers, scrolling sports scores, and scrolling weather that rivals the Weather Channel, is very compelling, indeed. But as compelling as it is, I find myself not using it much. I believe this is because I am limited to its content sources. While the sources it has are good, and the price is right (FREE!), it's not enough. PointCast could add content all the time and still not rival the wealth of content available on the Web. If I could set PointCast up to pull any Web content I wanted, I'd like it a lot more. Its screen saver technology is impressive, though, and getting better all the time. Advertisers love it because it gives them many opportunities to get their ads in front of people. But I hear time and time again from people who tell me they had PointCast on their systems for two weeks, and then took it off. Improvements to the software and additional content will help, but it's still worth your time to take a look. If nothing else, it's so slick that it's nice to have around when you're trying to impress people that wonder why you're spending so much time on the computer. Show them the scrolling weather, and for some reason people get excited. But for all PointCast's slickness, like the Web, it still requires people to learn a new behavior. Even if it's only downloading the software and configuring it for themselves, leading the horse to water can be a difficult task. *Mercury Mail* Keep a close eye on the folks at Mercury Mail < http://www.merc.com >. They've recently made their useful subscription e-mail services FREE! Closing Bell" provides you with a closing stock quotes and news on the stocks you select within about an hour of the market close. There's even a WeekEnder version of Closing Bell, which pretty closely resembles my Stock Watch, but hey, I don't care*it saves me the trouble of having to look up quotes! WeatherVane provides personalized weather forecasts for the cities you choose. There are personalized news and sports services, as well, all delivered directly to your e-mailbox. As I've said before, when it comes to e-mail vs. the Web, especially for things like delivering news, the difference is as great as receiving the newspaper directly on your doorstep vs. having to run down to the corner to pick up a copy. Look for Mercury Mail to begin adding advertising to these services soon. They even care about the cranks who are dead-set against advertising! They can still pay the full subscription price and not get any advertising whatsoever. I recently spoke with John Funk, president of Mercury Mail. Funk is counting on a couple of things to happen down the road. Primarily, he's counting on multimedia e-mail to become more mainstream. Netscape's e-mail already has the capability to display HTML, complete with graphics. An upcoming version of Eudora will offer similar features. The ability to send a picturesque message is important to advertisers. Second, Funk is counting on getting hundreds of thousands of free subscriptions, so there will be hundreds of thousands of opportunities each day to present ads. (It is important to note the difference between subscriptions and subscribers. If 100,000 people subscribe to five services each, the opportunities for presenting ads would be based on at least 500,000 messages rather than 100,000.) I think Mercury Mail has a good chance for success if it can get the word out. E-mail is the most used Internet application, and some of the services offered by Mercury Mail are extremely useful. When you fill out profiles for the various services (on the Web), different information is requested. For example, Closing Bell will give you the option to receive the data as an attachment that can easily be imported into Quicken or Excel. WeatherVane wants to know what type of e-mail program you use so it can send you enhanced text/graphics* if your e-mail program supports it. If you want information delivered directly to you, Mercury Mail is definitely worth a look. Miscellaneous ============= AMERICA ONLINE has settled the 11 class action suits brought against it regarding its billing practices*mostly, the practice of adding 15 seconds of time to each login to account for the network time it takes to make the connection, the not infrequent enough glitch where members are billed for time in the FREE area, and rounding up to the next minute. The settlement calls for AOL to give all existing customers one free hour of time. Additionally, those who were members between July 15, 1991 and March 31, 1996 and had in excess of $300 of charges in that time, are entitled to an additional free hour of time for each $300 of charges. San Francisco Superior Court Judge James Robertson II, gave preliminary approval to the settlement, which is subject to final court approval after a public hearing. While the problem with the 15 seconds likely affects less than one-third of AOL's users, AOL still got off pretty easy. Why? Because they STILL add 15 seconds to each login for network connection time and it doesn't take nearly 15 seconds for anyone connecting faster than 2,400 Kbps. The settlement does not require them to change this practice and I have a problem with that. If you're actually online for 46 seconds, you'll be billed for 2 minutes. This is because AOL adds 15 seconds and then rounds up to the next minute. If my "network connection time" actually took 4 seconds, and I was on for 46 seconds, it would add the 4 seconds to bring it up to 50 seconds and then round me up to 1 minute. I could live with that. But it adds 15 seconds and I wind up racking up two minutes of time when I actually used less than one minute of service. Fifteen seconds is too much time to add for those accessing at speeds of 9,600 Kbps and above. Last week I spoke with AOL CEO and chairman Steve Case about these issues. Case suggested that the issue wasn't the practice of adding 15 seconds itself, but that the information wasn't disclosed properly (it is now.) "The mistake a year ago was not making clear what we were doing and why we were doing it," Case said. I suggested to Case that it wasn't a problem to bill for the network connect time if AOL could bill for it accurately. Case said that they couldn't bill for actual time, so they estimate. The more I thought on this, the less I liked it. First of all, I don't buy into the estimate. If they estimated five seconds for 9,600 and 14.4, and two seconds for 28.8 and added no time for TCP/IP connections (where AOL doesn*t pay time charges for the network connection), I'd be OK with them adding 15 seconds to those accessing via 2,400 Kbps. It seems to me those who exceed the five hours that come with the monthly subscription and are accessing at speeds faster than 2400 Kbps are getting hosed. If AOL can't bill for actual time or estimate fairly based on access speed, it ought to write it off as a cost of doing business. Based on hourly access charges of $2.95, the suit could add up to a retail value of about $22 million, according to attorneys for the plaintiffs. But it won't cost AOL nearly that much. If it gives away almost 6 million hours away (and insiders are claiming that the U.S.-based AOL service still has not exceeded 6 million subscribers), two out of three people won't use it. For the 2 million or so who might, the actual cost to AOL would be more like $1 million to $2 million based on actual network charges ranging from 50 cents to 1 per hour. Thankfully for AOL, nearly all of its subscribers have come aboard in the past 2 years. Pulling billing records beyond that to calculate how many increments of $300 somebody has earned is probably going to be a nightmare (and you can be sure that it will only be giving it to those people who ask for it). Those who are no longer members, but who were members between the said dates can also apply for a cash award of $2.95 for each $300 of service used. Interestingly, according to The Washington Post, (which is now on the Web with a great site at: <http://www.washingtonpost.com > ) in an article at: <http://www.washingtonpost.com/wp-srv/WPlate/1996-07/06/072L-070696-idx.html> America Online has only tagged $500,000 of funds for former customers applying for the $2.95 awards. -- THE C|NET IPO came out priced at $16, slightly higher than the anticipated price of $13 to $15. It got as high as $21.25 before settling down to close the week at $17.50. It's hard to say if the drop off was due to lack of enthusiasm. More probably, the tech market in general had a tough week. According to a story by Reuters, Manish Shah, publisher of the IPO Maven, said that though c/net offers a bold vision of developing original content for the Internet and an advertising supported model to support themselves, the company "lacks vision on earnings." -- PATENT THIS! The folks at E-Data Corp (formerly Interactive Gift Express) suffered a setback this week regarding their "Freeny Patent" on electronic commerce. U.S. District Court Judge Barbara Jones ordered that within 60 days the company identify each product or service offered by the 18 defendants it contends infringe on its patent and explain the meaning of unique technical terms used in the Freeny patent. A copy of the order is available at: < http://www.patents.com/ige/june25.sht >. -- GENIE NEEDS A GENIE. According to Newsbytes < http://www.newsbytes.com >, Yovelle Renaissance Corp. has defaulted on its payments to General Electric Information Services (GEIS) for its purchase of Genie. GEIS is attempting to block the collection of credit card charges by Yovelle, and the Newsbytes piece quotes insiders as fearing a shutdown may be imminent. Yovelle bought the service in January and made one payment. According to the story, it tried to renegotiate the remainder of payments because there weren't as many subscribers as there were at the time of the sale. Since Yovelle saw fit to raise the monthly subscription fee from $8.95 to $18.95, this isn't exactly surprising. Stock Watch for the Week Ending July 5, 1996 ============================================= This % 52 52 Week's Change Week Week Company Name Ticker Close 1 Week High Low ============ ===== ====== ===== ====== ==== @Net Index IIX $245.57 -2.7% $273.13 $185.76 America Online AMER $41.13 -6.0% $71.00 $22.25 Apple Computer AAPL $19.50 -7.1% $49.88 $19.25 AT&T T $60.00 -3.2% $68.88 $51.38 BBN Corporation BBN $20.88 -4.0% $48.75 $20.25 CMG Information Svcs. CMGI $25.00 -7.4% $50.25 $9.63 c|net CNWK $17.50 --- $21.25 $17.00 CompuServe CSRV $20.56 -2.7% $35.50 $20.00 CyberCash Inc. CYCH $47.75 -12.8% $64.75 $24.50 Excite Inc XCIT $7.25 -13.5% $21.25 $6.75 FTP Software FTPS $7.13 -13.6% $40.63 $6.88 H&R Block HRB $31.75 -3.1% $48.88 $31.50 IBM IBM $97.88 -1.1% $128.88 $83.13 Lycos Inc. LCOS $10.00 -10.2% $29.25 $8.75 MCI MCIC $25.38 -1.0% $31.13 $20.88 Mecklermedia Corp. MECK $19.88 -1.8% $24.50 $8.50 Microsoft MSFT $118.38 -1.5% $125.88 $79.88 Netcom NETC $25.00 -7.4% $91.50 $19.22 NetManage NETM $11.00 0.0% $34.00 $9.38 Netscape Comm. Corp NSCP $58.25 -6.4% $87.00 $22.88 Open Market OMKT $21.50 -11.8% $42.28 $21.50 Oracle Corp. ORCL $37.13 -5.9% $40.38 $23.31 PSINet Inc. PSIX $10.38 -9.7% $29.00 $6.75 Security First Bank SFNB $33.00 0.0% $45.00 $31.75 Spyglass Inc. SPYG $19.88 -7.3% $61.00 $14.38 Sun Microsystems SUNW $55.75 -5.3% $67.13 $19.75 UUNET Technologies UUNT $65.00 -1.9% $98.75 $24.25 VocalTec LTD VOCLF $8.88 1.5% $20.75 $8.50 Yahoo YHOO $20.00 -4.8% $43.00 $18.25 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>.