Seidman's Online Insider
=============================================================================
Seidman's Online Insider
=============================================================================
Weekly Summary of Major Online Services and Internet Events
-----------------------------------------------------------------------------
Vol. 2 No. 46 (Formerly known as In, Around and Online) December 1, 1995
=============================================================================
Copyright (C) 1995 Robert Seidman (robert@clark.net). All rights
reserved. May be reproduced in any medium for non-commercial purposes.
IN THIS ISSUE
=============
-Notes from the Editor
-My Day Job
-Microsoft, Microsoft, Microsoft...
-Blackbird and Still More MSN
-The Internet Frenzy: What's in a Name? Just ask H&R Block
-This & That
-Stock Watch
-Disclaimer and Subscription Info
Notes from the Editor
=====================
There was no newsletter last week. I took off for the Thanksgiving
holiday and enjoyed it!
My Day Job
==========
"What do you do for IBM?"
Since March I've received that question quite often. Finally I can say,
but it will come in the way of a plug. Hopefully, it won't be too
shameless.
Back before I'd ever heard of the "News in the Future" research
consortium at the MIT Media Lab <http://nif.www.media.mit.edu/>, I was
spending a lot of time "tweaking" some query language software that ran
against software that filtered news stories that came over the
newswires. I wanted the software to only "filter" stories about
America Online, CompuServe or Prodigy when the stories were actually
*about* America Online, CompuServe or Prodigy. You'd be amazed at how
many stories there are about tennis and piano prodigies. There are also
the unrelated stories that reference America Online or CompuServe simply
because of an e-mail address.
We're still a ways off from the utopia dreamed of by Nicholas Negroponte
and the hardworking crew at the Media Lab. Still, I think the
technology is on the verge of being able to provide the information you
need, when you need it. In what seems like a lifetime ago, after many
months of query "tweaking", I was getting all the information I wanted on
the Online services industry, and only the information I wanted, sent to
me directly via e-mail.
While my query building efforts proved to be successful, I came to the
realization that most people wouldn't spend the time necessary to get the
desired results and there wasn't any technology that really simplified
things. If the goal is to empower the masses with information, the tools
to do so must be easy to use.
I admit I get a little sappy over this sort of technology. It's not only
because I find the technology fascinating, but also because it was
because of such technology that this newsletter was born 15 months ago.
For the last 9 months, when I wasn't slaving away on the newsletter or
answering e-mail, I was working with a dedicated team at IBM on a
business to business information product we knew only under the code name
"Sage". Initially, I didn't like that name a whole lot, but when I saw
what we were coming up with for the actual product name, Sage started to
sound real good! So, it was with much relief that we finally settled on
the name of "infoSage".
I'm one of the product managers and my major roles have been helping to
define the product and establishing a team to build up a knowledge base
of information, and a group of people that either work with the information
providers on the technical side or work with the content we receive.
While I enjoy the technology aspects, the highlight of the experience has
been assembling an excellent cast of characters to work on my team. I'd
name them here, but they'll probably be famous one day and leave. I
don't want to speed that process up!
*BETA TEST IT*
infoSage, in its initial offering will be a current awareness service
that filters newswires, publications and reports. At launch, infoSage
will offer over 2,000 categories to select from that may be personally
modified. For example, you could select the "World Wide Web" category
and specify that you're especially interested in Netscape and Spyglass.
At launch, the service will also offer links to relevant information.
For example, if you received a story on IBM, links to reports, other news
items and SEC documents pertaining to IBM would be offered. The service
will be available via e-mail or World Wide Web depending on your
preference. My preference is
e-mail, but it sure looks a lot better on the Web.
We're hopeful that we'll launch commercially sometime in the first
quarter, but you can see it in its current beta state now at
<http://www.sage.hosting.ibm.com/>.
You'll need to download the software for our profile tool (sorry,
currently there's only a Windows version of this, but we're brainstorming
and are hopeful to someday have a Web version), and fill out a profile
and currently, you have to have a true winsock connection in order to be
able to send the profile back to us automatically (though that changes in
the next version of the beta).
Twice a day, you'll receive a delivery of relevant information based on
your profile. At least it is our hope that it is relevant, but keep in
mind, it's still "beta" and that's why we need testers! There's another
beta with major revisions which will be released within a few weeks.
Future versions of the Beta will offer the links I spoke of above, the
full set of topics (currently there are only several hundred available
via the profile tool) and the ability to track some stocks. We
definitely want your input (though I'd prefer it went through the normal
channels and wasn't e-mailed to me!). This is still the very early
stages of the product. I'd compare it to Windows 1.0. We have a ways to
go, but you have to start somewhere. Just ask Bill Gates.
Again, that URL is http://www.sage.hosting.ibm.com/ . Hey, if nobody
looks, my management will think they were idiots for allowing me to spend
company time on the newsletter! That would not be good.
Final note, when you visit the Web page, it will have a banner that says
"Global Pulse". Thankfully, when this changes soon to infoSage, I won't
be affiliated with any pulsating products.
MSN, MSN, MSN...
================
Microsoft Network announced that they'd gone over the 500,000 mark before
Thanksgiving and surprise of surprises, they decided to forget about
their self-imposed freeze on the subscription base they had planned at
the 500K mark. This has brought in a flurry of very heated comments from
people labeling the freeze as the "big lie". I don't really share that
view.
Even though they have already amassed 500K subscribers, there's no
telling how many of them actually sign on simultaneously. Comparatively
speaking, it probably isn't very many. From my perspective, the service
isn't any slower than it was when it first launched. Access, based on my
own experience, has improved over the few months since launch. I can get
on the service almost every time I try. If there were performance
problems, at least more problems than they started with on August 24th,
who knows, maybe they would've frozen subscriptions. Since there doesn't
seem to be those sort of problems, I can't say I blame them for
abandoning the freeze.
"We are off to a great start and looking forward to a great holiday
season," said Microsoft VP and chief of MSN, Russell Siegelman said via
e-mail.
"I don't think we will have any problem making our year 1 goal of 1M
subs. Of course we need to continue to improve the service in many ways
- performance, better Internet function, more Internet phone numbers,
unbundle content from access so any Internet user can use MSN content -
but we feel like we are off to a great start," said Siegelman.
Of course, at the time they originally announced the "freeze", many of us
thought it might just be a brilliant maneuver to keep the U.S. Department of
Justice of Microsoft's back for bundling MSN with Win 95. So, we're not
very surprised by this turn of events.
Considering that there still aren't that many copies of Win 95 floating
around yet, (I hear and see figures ranging from 3 million to 12 million) and
considering that after only 3 month MSN is at 525,000, I'd say that's
pretty impressive.
I get a lot of mail saying, "The icon on the desktop doesn't matter! The
reason not that many people are signing up is because the service is
slow!" Bah. The reason not that many people are signing up compared to
AOL and CompuServe is because AOL and CompuServe run on Windows 3.1 --
MSN doesn't, it only runs on Windows 95.
A couple of week's ago I wrote about Microsoft getting slammed for lack
of an Internet strategy. I didn't really buy into that, but in talking
with several people in the industry afterwards, the one thing that kept
coming up is that Microsoft's Internet strategy is very linked to Win 95
(yeah, I know there is the Win32s for Win 3.1). Most analysts agree
that it will be at least a year or two before there are more people
running Win 95 than Win 3.1.
*Speed Problems Persistently Persisting?*
The MSN portion of the service, well, that's still pretty darn slow.
But, if you use the Internet Wizard (via the Plus pack or download from
MSN) to turn MSN into a true Internet Connection, it's a different
animal.
The Internet connectivity is FAST. Now I'm not sure if that's because
not that many people are on the Network yet, or whether UUNET has done a
heck of a job building a network for Microsoft, or something else. I am
sure of this though: the speed I get with a dial-up connection to MSN is
faster than any other dial-up service I've used for Web browsing.
Steve Case and Bob Massey are still encouraging the DOJ, but secretly
they must be saying a prayer of thanks that the wizards of the West
didn't wind up putting an Internet enabled version of MSN on the
desktop.
Blackbird and Still more MSN
============================
I get a lot of questions about Blackbird, the Microsoft tool for
publishing content, as it relates to MSN and the Internet. I asked MSN
chief Siegelman for
clarification. Following are his comments:
"We announced that BB will be available for general
use on the Internet sometime in the first half of
1996. The first release, probably to be released
in December or very early Jan, is specific to MSN,
meaning that if you publish the information can only
be hosted on MSN.
"For the next release we will be making BB more of a
general Web authoring tool. It will run over HTTP
(we already have a version of this running in the lab)
and we are thinking about how we will making it more of
an extension of HTML. In any case you will use a viewer
that is integrated into Windows and uses the same
controls (like favorite places, back and forward, etc.)
as Internet Explorer.
"In this time frame any content provider can go out
and buy BB (pricing and packaging - and name! have not
been decided yet) and host any BB content on a Gibraltar
server (this is our code name for our NT based HTTP server).
Any Win 95 user can view the "advanced version" of the
content authored with BB and get all the features. And as
I mentioned above we are thinking through right now how
the format will be an HTML extension so that downlevel HTML
browsers can view the same title, but with less
functionality."
My thanks to Russ Siegelman for taking the time to comment. Of course,
he sort of made me earn it with the following comments:
"MSN connects users to the Internet and as such you can
access to tens of thousands of web sites, ftp sites filled
with content, etc. Yet I continue to see comments in the
press like "MSN is behind on content, AOL or CompuServe
has more content". I find this a baffling comment. In
the world of the Internet what is the value of having just
another bulletin board, or a forum about personal finances
or x, when there are hundreds of web sites and newsgroups
on any topic you care about? I think this kind of
commentary is so confused and shows a real lack of
(understanding of) the Internet.
"These same people will say the Internet is the thing and
it will kill services like MSN and AOL - but then they say
MSN is behind because it has "less content". Can you give
me some insight into this? When is the press going to get
it?"
Well, it isn't like IBM makes me say "I hate Microsoft" ten times before
they'll electronically deposit my paycheck...so, I think Siegelman is
right on the money regarding the irony of some of the reporting in the
mainstream press. It is baffling.
I think part of it is that some of the "press" truly doesn't get it.
Also people tend to love the underdogs. Today, Microsoft is not the
underdog. The PR machines that have been deployed by the likes of AOL
have their impact as well.
I would say particularly with regard to the newsgroups that there is a
benefit, in many instances, with the "managed services" found on the
online services. Also, there's something nice about going to an area like
AOL's finance channel (and certainly MSN is doing similar things, even
if it isn't as elegant yet) that has a diverse number of options to
select from.
True, some of those options already are available on the Web and sooner
or later, they all will be. Once that happens, it's true that someone
can make a link-list to all of the sites, no matter where they are. But,
I'm big on personalizing, that is, seeing the information I want to see...
*A New Look For MSN's Web Page"
Ironically, by doing something relatively simple, Microsoft Network has
come up with the best home page concept I've seen yet with the "beta"
version of their new home page at: <http://www.beta.home.msn.com/>. If
you have a browser that will support tables and "cookies", you'll
definitely want to check out the "Customize this Page" option. You don't
need to be an MSN subscriber to use the page.
Essentially, they've taken the CRAYON (Create Your Own Newspaper)
<http://www.eg.bucknell.edu/~boulter/crayon> model of combining Net
information and given it more of a "create your own Web main menu".
They've fancied it up a little using HTML tables.
Favorite links, computer news from Ziff-Davis, weather, comics, Internet
"search" tools, top news headlines, stock quotes, sports scores, Web
"picks", and TV listings are some of the options available almost all of
which comes from other Web sites.
You could write the HTML yourself instead of using their template to
customize your MSN home page, but Microsoft is counting on the fact that
most people won't. It's a lot more useful (and certainly more glamorous)
than a simple list of hotlinks. Try it and decide for yourself.
The folks at Netscape, Yahoo, AOL, etc., must be slapping their foreheads
and saying, "That was so simple, why didn't WE do it?" The wonderful
thing is, you can bet someone else will do it and probably a little
better. Then someone else will do it better still, and so on...Ah, it's
a wonderful Internet.
In the mean time, Microsoft wants MORE subscribers for MSN. Maybe they
need to buy another song. Perhaps, they can snag the Bacharach-David hit
"What the World Needs Now Is Love (Sweet Love)" Then they could have,
"What the World Needs Now, Is M-S-N, Oh Not Just for Some, but for
Everyone... We don't need another browser, there are browsers..."
(Okay, I admit that it is scary that I think thoughts like that, let
alone share them.)
The Internet Frenzy: What's in a Name? Just ask H&R Block
==========================================================
H&R BLOCK'S NUMBERS for the quarter ending 10/31/95 were hurt by
increased spending on CompuServe's recent initiatives, according to
reports.
Block, which lost $1.2 million during the same quarter one year ago, saw
its quarterly loss widen to $8.3 million. Still, the CompuServe
division's revenues were up almost 38% versus the same quarter last year,
to a record $188.4 million.
Though the rate reduction to $2.95/hour that went into effect on 9/10/95
only impacted 1/2 of the quarter, the reduction and increased spending on
new marketing initiatives led to the quarterly loss. Reportedly, the
CompuServe division's operating income fell 36% to $22 million and
operating margins were cut in half to 12% versus 25% last quarter due to
these initiatives.
"We are consciously foregoing short-term gains at CompuServe in exchange
for growth and profitability over the long term," said H&R Block
President and CEO Richard Brown in a statement reported by Reuters.
I doubt CompuServe will see the return of the 25% operating margin
anytime soon. In fact, results next quarter (which will be the 3rd
quarter for H&R Block's fiscal '96) could be even worse than this
quarter, with more of their margin evaporating.
While the wonderful margins are gone, it doesn't appear to be as gloomy
as some (including myself) thought several months back. There are many
that disagree with my current outlook, too and not just the employees at
HRB and CompuServe!
Unterberg Harris analyst Lisa Thompson reiterated H&R Block as a "buy"
according to Reuters. According to the report, Thompson thinks H& R
Block "should experience the full effect" of the increased marketing
expense during the 3rd (which we interpret to mean "next") quarter.
"We continue to believe that H&R Block remains one of the most
undervalued stocks among the online and Internet providers," said Thompson.
While the CompuServe stock has performed very well for a "normal" market,
it hasn't taken off like so many of the Internet stocks. Netscape had
$20 million in revenue last quarter (that's $168 million LESS than
CompuServe, with the tax revenues thrown in, it would be more than $203
million less than H&R Block).
Oh sure, the browser is the thing, and Netscape owns the browser market
today. But if you use that logic, a bet on Netscape would be a bet
against Spyglass, right? But Spyglass has soared into the stratosphere
too! It's as if people are trying to diversify their portfolios with
Internet stocks. Once one stock goes into the stratosphere, they seem to
move to one that hasn't. The Internet frenzy.
But not H&R Block.
Could it be the name H&R Block? People think about H&R Block and they
probably think about taxes, and not CompuServe. Who knows where the stock
would be right now if they'd changed the company name to Block Online,
BlockSoft or BlockScape? Perhaps they will just change the official name
of the company to CompuServe and start trading under that name. Either
way, it should be fun to watch what happens.
This and That
=============
AOL DEEMED BREAST A VULGAR term and then reversed their position after
complaints from women who wished to discuss "breast cancer".
--
ONLINE SERVICES BACK DOWN? A coalition of online services bowed "to a
seemingly unstoppable push in Congress to keep sexual material off the
Internet" by backing legislation drafted by Rep. Rick White, R-Wash,
according to the New York Times. White's draft isn't as harsh as the
current Senate bill's provisions against making "indecent" material
available to children. Under White's House Bill this would be changed to
material that is "harmful" to children.
--
IBM ANNOUNCES INTERNET UNIT: IBM formed an Internet software and
announced plans to adjust research budgets in a major move into the
exploding networking market. Heading the new division will be Irving
Wladawsky-Berger, 50, formerly the general manager of IBM's workstation
and parallel computing business. He will report to John Thompson, senior
VP and head of IBM's $12 billion software division.
--
SCIENTOLOGY CASE AGAINST NETCOM is set to go to trial. A November 21st
ruling by U.S. District Court Judge Ronald Whyte, found enough evidence
existed for the copyright case against Netcom and former Scientology
Minister Dennis Erlich. While Judge Whyte ruled that Netcom isn't liable
for direct copyright infringement or for vicarious liability, (a major
ruling), since there is evidence that the Church of Scientology asked
Netcom to "do something", the judge denied Netcom's motion to dismiss the
case and ruled the case could go to trial on the issue of contributory
infringement.
--
See you next week!
Stock Watch
===========
New this week: CMG Information Svcs.
AOL: 2 for 1 stock split in effect
Spyglass: Announces 2-1 Stock Split for shareholders of record as of 12/6
This Last 52 52
Week's Week's Week Week
Company Ticker Close Close High Low
------- ------ ------ ------ ------- -------
@Net Index IIX $245.96 $235.81 $259.85 $185.76
America Online AMER $ 40.00 $ 35.38 $ 44.25 $ 10.25
Apple AAPL $ 37.63 $ 40.19 $ 50.94 $ 33.63
AT&T T $ 66.75 $ 65.00 $ 67.13 $ 47.25
Bolt,Beranek & Newman BBN $ 40.63 $ 34.50 $ 40.63 $ 12.63
CMG Information Svcs. CMGI $ 76.75 $ $ 76.75 $ 10.81
FTP Software FTPS $ 32.63 $ 29.50 $ 35.50 $ 20.25
General Elec. GE $ 68.63 $ 66.00 $ 68.63 $ 45.75
H&R Block HRB $ 44.50 $ 45.75 $ 48.88 $ 33.38
IBM IBM $ 94.75 $ 95.88 $114.63 $ 69.38
MCI MCIC $ 26.50 $ 26.75 $ 27.38 $ 17.25
Mecklermedia Corp. MECK $ 17.75 $ 13.50 $ 24.38 $ 2.13
Microsoft MSFT $ 86.25 $ 88.00 $109.25 $ 58.25
Netcom NETC $ 70.00 $ 62.50 $ 91.50 $ 16.75
Netscape Comm. Corp NSCP $137.25 $109.75 $142.25 $ 45.75
NetManage NETM $ 22.50 $ 21.25 $ 27.25 $ 12.38
News Corp. NWS $ 21.13 $ 21.13 $ 25.13 $ 14.38
Oracle Corp. ORCL $ 44.63 $ 45.13 $ 48.75 $ 24.66
Performance Syst. Intl PSIX $ 20.88 $ 18.50 $ 25.50 $ 12.00
Sears S $ 38.38 $ 39.50 $ 40.63 $ 21.50
Spyglass Inc. SPYG $106.75 $ 83.50 $113.50 $ 26.50
Sun Microsystems SUNW $ 84.38 $ 79.50 $ 94.75 $ 29.88
UUNET Technologies UUNT $ 76.25 $ 74.75 $ 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
========================
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Send an e-mail message to: LISTSERV@PEACH.EASE.LSOFT.COM In the
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A Web version of the newsletter is available at:
<http://www.clark.net/pub/robert>.
Seidman's Online Insider
=============================================================================
Weekly Summary of Major Online Services and Internet Events
-----------------------------------------------------------------------------
Vol. 2 No. 46 (Formerly known as In, Around and Online) December 1, 1995
=============================================================================
Copyright (C) 1995 Robert Seidman (robert@clark.net). All rights
reserved. May be reproduced in any medium for non-commercial purposes.
IN THIS ISSUE
=============
-Notes from the Editor
-My Day Job
-Microsoft, Microsoft, Microsoft...
-Blackbird and Still More MSN
-The Internet Frenzy: What's in a Name? Just ask H&R Block
-This & That
-Stock Watch
-Disclaimer and Subscription Info
Notes from the Editor
=====================
There was no newsletter last week. I took off for the Thanksgiving
holiday and enjoyed it!
My Day Job
==========
"What do you do for IBM?"
Since March I've received that question quite often. Finally I can say,
but it will come in the way of a plug. Hopefully, it won't be too
shameless.
Back before I'd ever heard of the "News in the Future" research
consortium at the MIT Media Lab <http://nif.www.media.mit.edu/>, I was
spending a lot of time "tweaking" some query language software that ran
against software that filtered news stories that came over the
newswires. I wanted the software to only "filter" stories about
America Online, CompuServe or Prodigy when the stories were actually
*about* America Online, CompuServe or Prodigy. You'd be amazed at how
many stories there are about tennis and piano prodigies. There are also
the unrelated stories that reference America Online or CompuServe simply
because of an e-mail address.
We're still a ways off from the utopia dreamed of by Nicholas Negroponte
and the hardworking crew at the Media Lab. Still, I think the
technology is on the verge of being able to provide the information you
need, when you need it. In what seems like a lifetime ago, after many
months of query "tweaking", I was getting all the information I wanted on
the Online services industry, and only the information I wanted, sent to
me directly via e-mail.
While my query building efforts proved to be successful, I came to the
realization that most people wouldn't spend the time necessary to get the
desired results and there wasn't any technology that really simplified
things. If the goal is to empower the masses with information, the tools
to do so must be easy to use.
I admit I get a little sappy over this sort of technology. It's not only
because I find the technology fascinating, but also because it was
because of such technology that this newsletter was born 15 months ago.
For the last 9 months, when I wasn't slaving away on the newsletter or
answering e-mail, I was working with a dedicated team at IBM on a
business to business information product we knew only under the code name
"Sage". Initially, I didn't like that name a whole lot, but when I saw
what we were coming up with for the actual product name, Sage started to
sound real good! So, it was with much relief that we finally settled on
the name of "infoSage".
I'm one of the product managers and my major roles have been helping to
define the product and establishing a team to build up a knowledge base
of information, and a group of people that either work with the information
providers on the technical side or work with the content we receive.
While I enjoy the technology aspects, the highlight of the experience has
been assembling an excellent cast of characters to work on my team. I'd
name them here, but they'll probably be famous one day and leave. I
don't want to speed that process up!
*BETA TEST IT*
infoSage, in its initial offering will be a current awareness service
that filters newswires, publications and reports. At launch, infoSage
will offer over 2,000 categories to select from that may be personally
modified. For example, you could select the "World Wide Web" category
and specify that you're especially interested in Netscape and Spyglass.
At launch, the service will also offer links to relevant information.
For example, if you received a story on IBM, links to reports, other news
items and SEC documents pertaining to IBM would be offered. The service
will be available via e-mail or World Wide Web depending on your
preference. My preference is
e-mail, but it sure looks a lot better on the Web.
We're hopeful that we'll launch commercially sometime in the first
quarter, but you can see it in its current beta state now at
<http://www.sage.hosting.ibm.com/>.
You'll need to download the software for our profile tool (sorry,
currently there's only a Windows version of this, but we're brainstorming
and are hopeful to someday have a Web version), and fill out a profile
and currently, you have to have a true winsock connection in order to be
able to send the profile back to us automatically (though that changes in
the next version of the beta).
Twice a day, you'll receive a delivery of relevant information based on
your profile. At least it is our hope that it is relevant, but keep in
mind, it's still "beta" and that's why we need testers! There's another
beta with major revisions which will be released within a few weeks.
Future versions of the Beta will offer the links I spoke of above, the
full set of topics (currently there are only several hundred available
via the profile tool) and the ability to track some stocks. We
definitely want your input (though I'd prefer it went through the normal
channels and wasn't e-mailed to me!). This is still the very early
stages of the product. I'd compare it to Windows 1.0. We have a ways to
go, but you have to start somewhere. Just ask Bill Gates.
Again, that URL is http://www.sage.hosting.ibm.com/ . Hey, if nobody
looks, my management will think they were idiots for allowing me to spend
company time on the newsletter! That would not be good.
Final note, when you visit the Web page, it will have a banner that says
"Global Pulse". Thankfully, when this changes soon to infoSage, I won't
be affiliated with any pulsating products.
MSN, MSN, MSN...
================
Microsoft Network announced that they'd gone over the 500,000 mark before
Thanksgiving and surprise of surprises, they decided to forget about
their self-imposed freeze on the subscription base they had planned at
the 500K mark. This has brought in a flurry of very heated comments from
people labeling the freeze as the "big lie". I don't really share that
view.
Even though they have already amassed 500K subscribers, there's no
telling how many of them actually sign on simultaneously. Comparatively
speaking, it probably isn't very many. From my perspective, the service
isn't any slower than it was when it first launched. Access, based on my
own experience, has improved over the few months since launch. I can get
on the service almost every time I try. If there were performance
problems, at least more problems than they started with on August 24th,
who knows, maybe they would've frozen subscriptions. Since there doesn't
seem to be those sort of problems, I can't say I blame them for
abandoning the freeze.
"We are off to a great start and looking forward to a great holiday
season," said Microsoft VP and chief of MSN, Russell Siegelman said via
e-mail.
"I don't think we will have any problem making our year 1 goal of 1M
subs. Of course we need to continue to improve the service in many ways
- performance, better Internet function, more Internet phone numbers,
unbundle content from access so any Internet user can use MSN content -
but we feel like we are off to a great start," said Siegelman.
Of course, at the time they originally announced the "freeze", many of us
thought it might just be a brilliant maneuver to keep the U.S. Department of
Justice of Microsoft's back for bundling MSN with Win 95. So, we're not
very surprised by this turn of events.
Considering that there still aren't that many copies of Win 95 floating
around yet, (I hear and see figures ranging from 3 million to 12 million) and
considering that after only 3 month MSN is at 525,000, I'd say that's
pretty impressive.
I get a lot of mail saying, "The icon on the desktop doesn't matter! The
reason not that many people are signing up is because the service is
slow!" Bah. The reason not that many people are signing up compared to
AOL and CompuServe is because AOL and CompuServe run on Windows 3.1 --
MSN doesn't, it only runs on Windows 95.
A couple of week's ago I wrote about Microsoft getting slammed for lack
of an Internet strategy. I didn't really buy into that, but in talking
with several people in the industry afterwards, the one thing that kept
coming up is that Microsoft's Internet strategy is very linked to Win 95
(yeah, I know there is the Win32s for Win 3.1). Most analysts agree
that it will be at least a year or two before there are more people
running Win 95 than Win 3.1.
*Speed Problems Persistently Persisting?*
The MSN portion of the service, well, that's still pretty darn slow.
But, if you use the Internet Wizard (via the Plus pack or download from
MSN) to turn MSN into a true Internet Connection, it's a different
animal.
The Internet connectivity is FAST. Now I'm not sure if that's because
not that many people are on the Network yet, or whether UUNET has done a
heck of a job building a network for Microsoft, or something else. I am
sure of this though: the speed I get with a dial-up connection to MSN is
faster than any other dial-up service I've used for Web browsing.
Steve Case and Bob Massey are still encouraging the DOJ, but secretly
they must be saying a prayer of thanks that the wizards of the West
didn't wind up putting an Internet enabled version of MSN on the
desktop.
Blackbird and Still more MSN
============================
I get a lot of questions about Blackbird, the Microsoft tool for
publishing content, as it relates to MSN and the Internet. I asked MSN
chief Siegelman for
clarification. Following are his comments:
"We announced that BB will be available for general
use on the Internet sometime in the first half of
1996. The first release, probably to be released
in December or very early Jan, is specific to MSN,
meaning that if you publish the information can only
be hosted on MSN.
"For the next release we will be making BB more of a
general Web authoring tool. It will run over HTTP
(we already have a version of this running in the lab)
and we are thinking about how we will making it more of
an extension of HTML. In any case you will use a viewer
that is integrated into Windows and uses the same
controls (like favorite places, back and forward, etc.)
as Internet Explorer.
"In this time frame any content provider can go out
and buy BB (pricing and packaging - and name! have not
been decided yet) and host any BB content on a Gibraltar
server (this is our code name for our NT based HTTP server).
Any Win 95 user can view the "advanced version" of the
content authored with BB and get all the features. And as
I mentioned above we are thinking through right now how
the format will be an HTML extension so that downlevel HTML
browsers can view the same title, but with less
functionality."
My thanks to Russ Siegelman for taking the time to comment. Of course,
he sort of made me earn it with the following comments:
"MSN connects users to the Internet and as such you can
access to tens of thousands of web sites, ftp sites filled
with content, etc. Yet I continue to see comments in the
press like "MSN is behind on content, AOL or CompuServe
has more content". I find this a baffling comment. In
the world of the Internet what is the value of having just
another bulletin board, or a forum about personal finances
or x, when there are hundreds of web sites and newsgroups
on any topic you care about? I think this kind of
commentary is so confused and shows a real lack of
(understanding of) the Internet.
"These same people will say the Internet is the thing and
it will kill services like MSN and AOL - but then they say
MSN is behind because it has "less content". Can you give
me some insight into this? When is the press going to get
it?"
Well, it isn't like IBM makes me say "I hate Microsoft" ten times before
they'll electronically deposit my paycheck...so, I think Siegelman is
right on the money regarding the irony of some of the reporting in the
mainstream press. It is baffling.
I think part of it is that some of the "press" truly doesn't get it.
Also people tend to love the underdogs. Today, Microsoft is not the
underdog. The PR machines that have been deployed by the likes of AOL
have their impact as well.
I would say particularly with regard to the newsgroups that there is a
benefit, in many instances, with the "managed services" found on the
online services. Also, there's something nice about going to an area like
AOL's finance channel (and certainly MSN is doing similar things, even
if it isn't as elegant yet) that has a diverse number of options to
select from.
True, some of those options already are available on the Web and sooner
or later, they all will be. Once that happens, it's true that someone
can make a link-list to all of the sites, no matter where they are. But,
I'm big on personalizing, that is, seeing the information I want to see...
*A New Look For MSN's Web Page"
Ironically, by doing something relatively simple, Microsoft Network has
come up with the best home page concept I've seen yet with the "beta"
version of their new home page at: <http://www.beta.home.msn.com/>. If
you have a browser that will support tables and "cookies", you'll
definitely want to check out the "Customize this Page" option. You don't
need to be an MSN subscriber to use the page.
Essentially, they've taken the CRAYON (Create Your Own Newspaper)
<http://www.eg.bucknell.edu/~boulter/crayon> model of combining Net
information and given it more of a "create your own Web main menu".
They've fancied it up a little using HTML tables.
Favorite links, computer news from Ziff-Davis, weather, comics, Internet
"search" tools, top news headlines, stock quotes, sports scores, Web
"picks", and TV listings are some of the options available almost all of
which comes from other Web sites.
You could write the HTML yourself instead of using their template to
customize your MSN home page, but Microsoft is counting on the fact that
most people won't. It's a lot more useful (and certainly more glamorous)
than a simple list of hotlinks. Try it and decide for yourself.
The folks at Netscape, Yahoo, AOL, etc., must be slapping their foreheads
and saying, "That was so simple, why didn't WE do it?" The wonderful
thing is, you can bet someone else will do it and probably a little
better. Then someone else will do it better still, and so on...Ah, it's
a wonderful Internet.
In the mean time, Microsoft wants MORE subscribers for MSN. Maybe they
need to buy another song. Perhaps, they can snag the Bacharach-David hit
"What the World Needs Now Is Love (Sweet Love)" Then they could have,
"What the World Needs Now, Is M-S-N, Oh Not Just for Some, but for
Everyone... We don't need another browser, there are browsers..."
(Okay, I admit that it is scary that I think thoughts like that, let
alone share them.)
The Internet Frenzy: What's in a Name? Just ask H&R Block
==========================================================
H&R BLOCK'S NUMBERS for the quarter ending 10/31/95 were hurt by
increased spending on CompuServe's recent initiatives, according to
reports.
Block, which lost $1.2 million during the same quarter one year ago, saw
its quarterly loss widen to $8.3 million. Still, the CompuServe
division's revenues were up almost 38% versus the same quarter last year,
to a record $188.4 million.
Though the rate reduction to $2.95/hour that went into effect on 9/10/95
only impacted 1/2 of the quarter, the reduction and increased spending on
new marketing initiatives led to the quarterly loss. Reportedly, the
CompuServe division's operating income fell 36% to $22 million and
operating margins were cut in half to 12% versus 25% last quarter due to
these initiatives.
"We are consciously foregoing short-term gains at CompuServe in exchange
for growth and profitability over the long term," said H&R Block
President and CEO Richard Brown in a statement reported by Reuters.
I doubt CompuServe will see the return of the 25% operating margin
anytime soon. In fact, results next quarter (which will be the 3rd
quarter for H&R Block's fiscal '96) could be even worse than this
quarter, with more of their margin evaporating.
While the wonderful margins are gone, it doesn't appear to be as gloomy
as some (including myself) thought several months back. There are many
that disagree with my current outlook, too and not just the employees at
HRB and CompuServe!
Unterberg Harris analyst Lisa Thompson reiterated H&R Block as a "buy"
according to Reuters. According to the report, Thompson thinks H& R
Block "should experience the full effect" of the increased marketing
expense during the 3rd (which we interpret to mean "next") quarter.
"We continue to believe that H&R Block remains one of the most
undervalued stocks among the online and Internet providers," said Thompson.
While the CompuServe stock has performed very well for a "normal" market,
it hasn't taken off like so many of the Internet stocks. Netscape had
$20 million in revenue last quarter (that's $168 million LESS than
CompuServe, with the tax revenues thrown in, it would be more than $203
million less than H&R Block).
Oh sure, the browser is the thing, and Netscape owns the browser market
today. But if you use that logic, a bet on Netscape would be a bet
against Spyglass, right? But Spyglass has soared into the stratosphere
too! It's as if people are trying to diversify their portfolios with
Internet stocks. Once one stock goes into the stratosphere, they seem to
move to one that hasn't. The Internet frenzy.
But not H&R Block.
Could it be the name H&R Block? People think about H&R Block and they
probably think about taxes, and not CompuServe. Who knows where the stock
would be right now if they'd changed the company name to Block Online,
BlockSoft or BlockScape? Perhaps they will just change the official name
of the company to CompuServe and start trading under that name. Either
way, it should be fun to watch what happens.
This and That
=============
AOL DEEMED BREAST A VULGAR term and then reversed their position after
complaints from women who wished to discuss "breast cancer".
--
ONLINE SERVICES BACK DOWN? A coalition of online services bowed "to a
seemingly unstoppable push in Congress to keep sexual material off the
Internet" by backing legislation drafted by Rep. Rick White, R-Wash,
according to the New York Times. White's draft isn't as harsh as the
current Senate bill's provisions against making "indecent" material
available to children. Under White's House Bill this would be changed to
material that is "harmful" to children.
--
IBM ANNOUNCES INTERNET UNIT: IBM formed an Internet software and
announced plans to adjust research budgets in a major move into the
exploding networking market. Heading the new division will be Irving
Wladawsky-Berger, 50, formerly the general manager of IBM's workstation
and parallel computing business. He will report to John Thompson, senior
VP and head of IBM's $12 billion software division.
--
SCIENTOLOGY CASE AGAINST NETCOM is set to go to trial. A November 21st
ruling by U.S. District Court Judge Ronald Whyte, found enough evidence
existed for the copyright case against Netcom and former Scientology
Minister Dennis Erlich. While Judge Whyte ruled that Netcom isn't liable
for direct copyright infringement or for vicarious liability, (a major
ruling), since there is evidence that the Church of Scientology asked
Netcom to "do something", the judge denied Netcom's motion to dismiss the
case and ruled the case could go to trial on the issue of contributory
infringement.
--
See you next week!
Stock Watch
===========
New this week: CMG Information Svcs.
AOL: 2 for 1 stock split in effect
Spyglass: Announces 2-1 Stock Split for shareholders of record as of 12/6
This Last 52 52
Week's Week's Week Week
Company Ticker Close Close High Low
------- ------ ------ ------ ------- -------
@Net Index IIX $245.96 $235.81 $259.85 $185.76
America Online AMER $ 40.00 $ 35.38 $ 44.25 $ 10.25
Apple AAPL $ 37.63 $ 40.19 $ 50.94 $ 33.63
AT&T T $ 66.75 $ 65.00 $ 67.13 $ 47.25
Bolt,Beranek & Newman BBN $ 40.63 $ 34.50 $ 40.63 $ 12.63
CMG Information Svcs. CMGI $ 76.75 $ $ 76.75 $ 10.81
FTP Software FTPS $ 32.63 $ 29.50 $ 35.50 $ 20.25
General Elec. GE $ 68.63 $ 66.00 $ 68.63 $ 45.75
H&R Block HRB $ 44.50 $ 45.75 $ 48.88 $ 33.38
IBM IBM $ 94.75 $ 95.88 $114.63 $ 69.38
MCI MCIC $ 26.50 $ 26.75 $ 27.38 $ 17.25
Mecklermedia Corp. MECK $ 17.75 $ 13.50 $ 24.38 $ 2.13
Microsoft MSFT $ 86.25 $ 88.00 $109.25 $ 58.25
Netcom NETC $ 70.00 $ 62.50 $ 91.50 $ 16.75
Netscape Comm. Corp NSCP $137.25 $109.75 $142.25 $ 45.75
NetManage NETM $ 22.50 $ 21.25 $ 27.25 $ 12.38
News Corp. NWS $ 21.13 $ 21.13 $ 25.13 $ 14.38
Oracle Corp. ORCL $ 44.63 $ 45.13 $ 48.75 $ 24.66
Performance Syst. Intl PSIX $ 20.88 $ 18.50 $ 25.50 $ 12.00
Sears S $ 38.38 $ 39.50 $ 40.63 $ 21.50
Spyglass Inc. SPYG $106.75 $ 83.50 $113.50 $ 26.50
Sun Microsystems SUNW $ 84.38 $ 79.50 $ 94.75 $ 29.88
UUNET Technologies UUNT $ 76.25 $ 74.75 $ 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.
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