Seidman's Online Insider - Vol. 4, Issue 43

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               Seidman's Online Insider - Vol. 4, Issue 43

    Visit the Online Insider on the Web < http://www.onlineinsider.com >

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Copyright (C) 1997 Robert Seidman.  All rights reserved. May be

reproduced in any medium for noncommercial purposes as long as

attribution is given.

IN THIS ISSUE

- Editor's Note

- Clarifications/Updates

- Netscape Finally Gets It

- What Goes Around Comes Around?

- Stock Watch

- Subscription Info

For some Internet World Miscellany check out this week's SideTrack at

< http://www.onlineinsider.com/html/sidetrack.html >.

Check out the Insider Talk Discussions at:

< http://www.onlineinsider.com/html/insider_talk.html >.

Editor's Note

=============

Ten minutes after I completed this newsletter on Thursday, U.S. District

Judge Thomas Penfield Jackson issued a temporary order barring Microsoft

from forcing PC manufacturers that license Windows 95 to bundle

Microsoft's Internet Explorer with Windows 95.  Jackson rejected the

Justice Department's request that Microsoft be fined $1 million per day

in contempt charges.  The ruling is temporary, and Jackson has requested

more evidence.  While from a public relations point of view, this is a

setback of sorts for Microsoft, it isn't a huge deal, in my opinion,

unless the final ruling extends to Microsoft's forthcoming Windows 98,

which does more to integrate Internet Explorer directly into the

operating system.  If Windows 98 is affected by the ruling, the decision

would hurt Microsoft more.  It would cause the company to re-engineer

the software (which would cause delays that equate to dollars, in terms

of revenue for Microsoft, which likely would affect Microsoft stock).

Also, since the browser integration appears to be the biggest feature of

the upgrade, there's some question of whether the other updates and new

features will make upgrading worthwhile.  Stay tuned ...

Thanks and an apology to those of you who took the time to click the

link to the "SideTrack" referenced in last week's newsletter, "What Goes

Around Comes Around?"  I apologize because you're getting it again here

in the newsletter, though it may be worth another look simply because

this time around it went through the newsletter-editing cycle (which

doesn't exist for the Web-based columns).  I'm including it here again

because while, numerically, many of you read it, statistically speaking,

the overwhelming majority of you didn't.  I understand the dynamics at

play here and I understand most of the reasons why this kind of thing

happens.

Fewer than 10 percent of you read the piece. I would never expect 100

percent to go from e-mail to the Web because, for one thing, those

reading this from, say, the Juno e-mail client can't go directly to the

Web from a link in the newsletter. And, of course, some people never

actually read the newsletter, some people are not connected when they

read it, and so on.

Still, I'd like to find out whether the click-through rate can be pushed

as high as 50 percent.  At this point, I'm not optimistic that can be

done, but I'm sure some of you are struggling with similar issues, so

I'd love to hear your thoughts on raising the click-through rate. While

I might not be able to respond personally to all submissions, I'll

definitely read them all and likely print the ones that make the most

sense.  If an idea actually works, there's beer, dinner, a lifetime free

subscription, or something in it for you!

Clarifications/Updates

======================

Some of you have heard me whining about the weather on America Online,

and why AOL doesn't just go ahead and personalize it for me on the basis

of my ZIP code. Last week, I detailed the number of clicks it takes to

get to my local weather.  While that wasn't technically wrong, there's a

much faster way.  After you've typed in your ZIP code and got the

results for your local city, drag the "favorite places" heart to your

Favorite Places folder (or, if you're using the beta of AOL 4.0, the new

tool bar).  After you go through these steps just once, if you're on

version 4.0 (which AOL says it will be releasing later this month for

download, with CDs beginning to ship sometime in the first quarter),

you'll be only one click away from your local weather forecast. Thanks

to reader Val Corley for pointing this out!

Speaking of AOL and speaking of whining, longtime readers know I've

consistently pointed to AOL's Welcome screen as a tremendous wasted

opportunity by AOL.  I've argued AOL could provide more and better info

in that space.  Well, AOL is finally doing something about it.  Those of

you who are on the AOL 4.0 beta or who were at Internet World have

already seen the new Welcome screen.  Now the rest of you can see it

too, at <http://www.onlineinsider.com/need To get a screenshot from AOL

before I finish this address>.

I'm not really sure if it's good or not, but I'm pretty sure it's much

better.

Netscape Finally Gets It

========================

"Netscape Finally Gets It" is a really cheesy headline.  But sometimes

even I will go the cheesy-headline route.  To say Netscape finally gets

it assumes that Netscape didn't get it before.  Now, from one point of

view -- that is, what's on its Web site -- it would appear that Netscape

doesn't get it in two ways:

- Netscape Communications' home page does not now and, to date, never

has leveraged the potential of the relationship Netscape COULD build

with most of its visitors.

-  Those viewing Netscape's page with Netscape Navigator 4.0 and above

see something that drove author Michael Sippey in his Stating the

Obvious column < http://www.theobvious.com/archives/092997.html > to

describe as a "confusing morass of drop-down menus and flying windows."

I think this is a fitting description.

In spite of this, I think there's a case to be made that Netscape got it

anyway.  Maybe Netscape just wasn't sure how to develop the home page to

leverage these relationships and it suffered through the "confusing

morass of drop-down menus and flying windows" because those features

showcased new Navigator capabilities.  I certainly saw some sites make

that mistake with Microsoft's Internet Explorer too, though perhaps not

necessarily Microsoft itself.

But whether Netscape got it before or not, Netscape gets it now.  On

Wednesday I met with Netscape VP Jennifer Bailey, who heads Netscape's

Web site, and Lynn Carpenter, who is director of marketing for the

site.  They pulled the oldest trick in the book on me by pretty much

agreeing with everything I said.  It made for a much more cordial

meeting, for sure, though I'd be lying if I said I wasn't at least a

little wistful about the scathing column that was not to be!  Seriously,

though, during the course of the meeting, Netscape backed up its

agreeable attitude with proof.

The most impressive proof offered was three printouts offering

alternatives for redesigning the home page.  Regardless of which is

picked, all three are clearly much, much better than today's home page.

While there was one in particular that I thought more visitors to the

site would like, all three offer clearer navigation and minimize the

promotion of Netscape the company while maximizing Netscape the site.

With a slight shift, Netscape will redub its home page "Netscape's

NetCenter," thus differentiating Netscape the company from Netscape the

Web site.  All the Netscape promotional stuff will still be there, but

it will be more like a "channel" off the home page.  Bailey advised that

one of the three versions would go live on the site by year's end and

that Netscape would make revisions based on user feedback.

Whatever comes up on the site later this month will clearly be only the

first of a series of moves.  I got the impression that Netscape will

move to some variation of the channel strategy, with the only question

being what channels will Netscape offer. In other words, will you

someday be able to navigate to sports or personal finance information

directly via Netscape's home page?  The distinct impression I got is

YES.  While the proof is in the pudding, the first iteration of the new

home page will be an improvement.

One of the categories, channels, or whatever you prefer to call them is

already set in stone -- online shopping!  Netscape launched the Netscape

Marketplace on Thursday, offering CDs from N2K and  a branded discount

travel and shopping offering from CUC.  Netscape will obviously (judging

by a look at Marketplace) branch out to computers, gifts and travel in

addition to the existing software offering.  Netscape also will offer a

"communities" channel early next year.  In the first quarter, Netscape

also plans to launch these communities via Web-based bulletin boards.

For some people, whether Netscape will bear some burden for not moving

in this direction sooner remains to be seen. Clearly, millions are still

coming to the Netscape site on a daily basis (and, equally clearly, most

of them are not paying attention to the site).  When Netscape finally

has a compelling product for the average Joe on its Web site, will

people automatically begin looking at it?  That remains to be seen.  If

Netscape gets it right, it could potentially out-Snap! Snap!, out-Yahoo!

Yahoo! and out-Excite Excite!  For other people, myself included, the

cost of not moving in this direction sooner is clearer.  Netscape could

have been Netscape, Yahoo! and Excite all at the same time.  It had a

good shot at dominating in that space.  I think it's way, way too late

for Netscape to dominate now, for the simple reason that the people

using Yahoo! and Excite are already using Yahoo! and Excite.  Not so

much an issue of brand loyalty as one of habit.  But who knows?  While

I'll willingly condemn Netscape for missing this opportunity, I'll also

commend it for at least seemingly being of the mind-set to make the most

of whatever opportunity is left.

What Goes Around Comes Around?

==============================

Mean old AOL decided it wanted to charge its content providers to

provide service via AOL. For a lot of companies, this wasn't viewed as a

good deal. Especially for smaller companies that weren't making that

much in revenue since AOL's switch to flat-fee subscriptions.  Gone were

the hourly charges AOL used to pay its content providers. Realistically,

the moment AOL went flat-fee, things had to change. AOL simply couldn't

afford to pay its content providers as it had before. Still, some very

popular sites couldn't find a way to make their businesses make sense on

AOL. Witness Dow Jones Business Center, which decided there wasn't a

good business model for it on AOL.

Untold in most of what I read was the other part of this story -- the

obvious other part. The part that was SO OBVIOUS I didn't see anyone

write about it. Dow Jones Business Center was kind of a unique thing

that didn't EXIST anywhere but on AOL. Moving to the Web was not an

option for Dow Jones Business Center, even if it wanted to charge for

subscriptions. Why that was the case had nothing to do with AOL, and

everything to do with Dow Jones. Dow Jones has this other not-too-shabby

online offering on the Web, called the Interactive Wall Street Journal,

and at the end of the day, that was, in this writer's opinion, the

bigger problem Dow Jones Business Center faced.

Nonetheless, many companies have had pathways to move off AOL and onto

the Web without conflict. The premise is pretty simple, too: We can

offer our content to AOL subscribers or anyone who can access the Web,

INCLUDING AOL subscribers. And at least on the surface, that seems to

make a lot of sense. There's only one hitch. Most content sites can't

make any money on the Web either. There are several reason for this,

chief among them:

- Most sites just aren't that good or that useful to make people want to

come back over and over again, which combines with ...

- There aren't ENOUGH EYEBALLS to support all the content sites that

have business models based on advertising. Do NOT look for this to

change anytime soon. At the end of 1998 there will be fewer major

content sites, not more. We'll see a lot of content consolidations in

1998. Other sites will just pack their bags and go home.

- Advertisers aren't quite sold on the Internet as an advertising

vehicle yet.  Building useful sites that people want to use over and

over is easier said than done. A lot of the sites have tremendous reach

in terms of the number of unique visitors a month. But most of those

sites find that folks don't come back that frequently. Make no mistake

about it, there WILL be more eyeballs. Usage of the Internet will

continue to grow. But no matter how much it grows, it will be a long,

long, long time, if ever, before things are in place that could

profitably sustain thousands and thousands of content sites via

advertising revenue.

I believe advertisers aren't quite sold on the Internet for three basic

reasons:

- Unfortunately, it takes time for people to get comfortable with

something that's new.

- There are no good consistent measurement systems in place. People

throw out different numbers. Hits, page views, ad views. Some of these

numbers are valuable and some aren't. Until there's a clear

understanding of the terminology and a clear understanding of which

numbers really make sense and everyone is speaking the same language,

advertisers aren't going to feel comfortable.

- The leaders in the industry need to do a better job of evangelizing

the Internet as an advertising opportunity to the suits on Madison

Avenue. How often do you suppose Steve Case and Halsey Minor are in

there pitching the advertising community on Madison Avenue? However

often that is, figure that Bill Gates spends less time. And here's a

place where Bill Gates probably would make a big difference. I mean, you

figure the richest guy in the world comes into your office to tell you

about why you need to advertise on the Internet -- you'll at least give

him your ear because you're curious about the richest guy in the world.

I know that by this point in this little piece, some of you are

thinking, "Come on now, you're so full of crap I can smell you from

here!" You would tell me that there are some sites on the Net making

money and that the picture isn't so bleak as it seems. First of all,

yes, there are some sites making money, but there is no BIG MEDIA on the

Web making BIG MEDIA-style dollars. It doesn't exist. It's all still

small potatoes compared with other media. Second, I don't think the

picture is really all that bleak. I just think that there's still more

hype than substance and that a lot of folks will lose their life savings

if they think they're going to get rich on the Internet in a big, big

way with content TODAY.  Which brings us back to AOL.

AOL recently cut two deals for content exclusives on AOL, and both are

pretty interesting. The first is for a new magazine launched by the

People Magazine folks, called Teen People.  Some people will naturally

ho-hum this because the magazine hasn't launched yet, so who knows how

successful the print version will be, let alone the online version?  I

sort of agree this is a pretty low-risk way for the folks at Time Warner

to experiment with AOL and have their online efforts subsidized somewhat

by AOL.  While we don't know how much AOL paid for the exclusive rights,

we do know they paid something -- even if it's free promotion.

But I still find it interesting because the teen sector is now perceived

as huge. Apparently, unlike when I was a teenager some twenty years or

so ago, today's teens have lots of cash and spend it. To be honest, more

interesting to me was reading in Fortune that the No. 1 fast-food joint

among the teenagers is Taco Bell. Taco Bell!  This is no doubt causing a

lot of sleepless nights and cold fries over at Mickey D's.  Maybe even

that doesn't make you interested in AOL's exclusive with Teen People.

But what about Business Week?  Yeah, Business Week!  Business Week

launched exclusively on AOL a few years back, just as the Web was

getting hot.  In 1996, Business Week went live on the Web. Now Business

Week is moving back to AOL exclusive status.  Sort of.  Beginning in

January, AOL will be the only place online to get Business Week content

for no extra charges. Business Week will begin charging subscription

access to content on its Web site.

So what does this mean? Well, for one thing it means AOL will be the

only place to get the world's largest business weekly online for no

extra charges. AOL gets some promotion because the North American

version of the magazine will include the AOL keyword to Business Week

online on the cover. And we're pretty sure that Business Week will get

some more bucks from AOL, though just how much was not disclosed.

No, this deal doesn't mean AOL is this great thing.  It doesn't mean AOL

is better than the Web.  It just means AOL can make it more worth

Business Week publisher McGraw-Hill's while financially than being free

on the Web.  It just means that on this wonderful thing we call the

World Wide Web, the WORLD'S LARGEST business magazine can't yet make a

profit by offering its content free.  Business Week gets money, and AOL

gets a very worthwhile exclusive.  A good deal for everyone.  Everyone,

that is, except those folks not using AOL who liked getting Business

Week free on the Web!  Depending on where you stand, it's either another

reason to hate AOL, or a reason to subscribe to it.

Stock Watch for the Week Ended Dec. 12, 1997

============================================

Courtesy of InfoBeat's CLOSING BELL < http://www.infobeat.com >.

                                      52 Wk     52 Wk    P/E     Week

SECURITY                    CLOSE     HIGH       LOW    Ratio    CHNG

---------------------------------------------------------------------

AT&T Corp................   57 11/16 58 1/2   30 3/4      19    +0.5%

Amazon Com Inc...........   54 1/2   66       15 3/4            -1.1%

America Online Inc.......   86 1/8   91 1/8   31                +2.0%

Apple Computer Inc.......   14 1/8   29 3/4   12 3/4           -10.6%

At Home Corporation Ser A   26 3/4   30 5/8   16 5/8           +17.5%

C/Net....................   27 1/4   46 1/2   15 3/4            +7.1%

CMG Info Svcs. Inc.......   26       28 7/8   10 7/16           +8.9%

CUC Intl. Inc............   30 7/8   32 5/16  19 1/4      37    -2.9%

Cmp Media Inc Cl A.......   18 1/8   29 3/8   13 3/4      26    +1.0%

CompuServe Corp..........   12 7/8   14 9/16   8 7/8            -4.6%

Concentric Network Corp..   10 1/8   16        8 3/4            -8.9%

Cybercash Inc............   14 1/4   28       10 1/2            -8.0%

Earthlink Network Inc....   21 11/16 23 7/8    8 5/8            +9.1%

Excite Inc...............   23 3/8   35        7 1/2            -7.4%

FTP Software Inc.........    1 3/4    8 3/8    1 11/16         -15.1%

GTE Corporation..........   49 1/16  52 1/4   40 1/2      16    +0.7%

H & R Block Inc..........   43 1/2   44 3/16  28          48    -1.5%

Hewlett Packard Company..   60 15/16 72 15/16 48 1/8      21   -10.0%

IBM......................  100 3/8   113 1/2  63 9/16     17   -10.5%

Individual Incorporated..    3 3/16  11 7/8    2 5/8            -9.7%

Infoseek Corporation.....    9 1/16  14 1/2    4 3/8           -16.1%

Lycos Inc................   33 1/4   42       10 3/8            +3.1%

MCI Communications Corpor   43 13/16 45       27 5/16     44    -2.2%

Mecklermedia Corp........   22 7/8   30       16 1/2      53    -4.6%

Microsoft Corporation....  136 3/4   150 3/4  76 3/8      51    -4.4%

Mindspring Enterprises In   32 7/8   31 1/2    5 3/4           +16.3%

Netcom On Line Communicat   22 3/8   23 1/2    7 7/8           +10.4%

Netmanage Inc............    2 1/2    7 5/8    2 25/64           0.0%

Netscape Communications C   27 7/8   63 1/2   23 1/2            -5.5%

Network Solutions Inc. Cl   15 1/4   26 3/4   11 3/4      76    -5.4%

Onsale Inc...............   16       35 1/4    4 5/8           -11.1%

Open Market Inc..........   10 5/8   17 3/8    6 1/2            -7.1%

Oracle Corporation.......   22 3/4   42 1/8   21 3/4      32   -27.0%

Psinet Inc...............    5 13/16 13 3/8    5 1/2           -11.0%

Quarterdeck Corp.........    1 33/64  6 5/16   1 5/8           -15.5%

Security First Network Ba    6 1/16  14 1/4    5 1/4           -20.4%

Silicon Graphics Inc.....   13 5/16  30 5/16  12 5/8      53   -10.8%

Sprint Corporation.......   57 1/2   60 5/8   37 1/2      25    +1.0%

Spyglass Inc.............    6 33/64 16        6                -9.1%

Sun Microsystems Inc.....   35 11/16 53 5/16  25 1/2      19   -14.1%

Vocaltec Communications L   16 3/8   33 1/4    5 1/8            -9.0%

Worldcom Inc.............   32 1/16  39 7/8   21 1/4            -5.3%

Yahoo Corporation........   59 1/2   61       11 9/64           +5.7%

Dow Jones 30 Industrials. 7,838.30                              -3.8%

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Subject:      Seidman's Online Insider - December 14, 1997

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