After the gold rush, page 2
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Here's what such an analysis might have revealed over the past week:
Time Warner is the archetypal merger-spawned media empire. The online medium is one area in which such companies assume they can find "synergy" among their many "properties." So instead of building separate Web sites for each of its popular magazine titles and letting them find their own voices in the new medium, Time Warner built a single home page for Time, People, Entertainment Weekly, Sports Illustrated and the rest of its publications -- as if what mattered to readers was who owned the magazines, and not what was in them. Ugly, off-putting and monstrously unusable -- a wilderness of pushbuttons and bars and ads -- Pathfinder is a case-study in how not to use the Web. When it closes up shop, as it is likely to do, somebody's sure to proclaim the death of the Web. Don't buy it. All it will mean is that one company, having made some colossal mistakes, decided to cut its losses. Pathfinder is merely the latest in a long line of expensive corporate missteps on the Net -- from Rupert Murdoch's escapades with Delphi to America Online's purchase, repurposing and now dismantling of Global Network Navigator. At industry conferences, speakers will often depict the Web as a big money-hole. But these companies continue to dig their own ditches.
About a year ago this time, after the spectacular ride of Netscape's stock, a lot of people began to see gold in them thar Internet hills. Wired, which had pioneered independent Web publishing with HotWired, decided to try to cash in. But it never succeeded in persuading Wall Street to view it as a technology company that might qualify to participate in the Net boom -- rather than simply a publishing house with a lot of digital cachet. With cutbacks or a possible buyout looming, Wired now stands humbled. And you can bet that its troubles will become fodder for Web obits that will turn the magazine's rhetoric against itself ("Wired=Tired"). But any equation of Wired's troubles with wider Web woes is a stretch; one high-profile IPO failure fed by delusions of media-empire grandeur on a single publisher's part hardly portends the death of a medium. What the Wired story will become is a benchmark for the end of Wall Street's infatuation with anything Internet-related. It turns out that you can't simply chant "Internet" three times and make investors do your bidding. That can only be healthy in the long run.
Oct. 28-29: Microsoft and Intel Unveil NetPC Plans; Sun Introduces the Javastation Network Computer -- Competing alliances are rushing to market with their latest twist on desktop technology -- a stripped down "network computer" (NC) that's cheaper and easier to maintain than traditional PCs. Sun and its allies hope the NC will help them unseat industry leader Microsoft; Microsoft responds with its own version of its competitors' idea.
The network-computer saga is a fascinating illustration of the Mobius-strip-like dynamics of the technology industry. The biggest problem with the Internet today for the consumer, everybody knows, is that you can't just plug it in, turn it on and surf. So when Oracle CEO Larry Ellison last year proposed an "Internet appliance" computer that would be $500 cheap and easy to use, people got excited. Now it turns out that the NC isn't aimed at the home at all; it's a $1000 box for corporate managers to cut costs with, and its real purpose is to help Oracle and Sun in their ongoing battle with Bill Gates, who first pooh-poohed the NC idea and has now (surprise!) copied it. The NC may or may not wrest a few points of market share away from Microsoft, and may or may not help shave some red ink off of some corporate balance sheets. What it plainly won't do is change anyone's world. Meanwhile, in an entirely different arena, Sony and Panasonic are both now selling WebTV boxes that fit what was supposed to be the NC niche: They're genuine consumer appliances that are truly cheap ($300 plus a monthly fee) and easy to use. They sit on top of your TV and feed Web content onto your TV screen over a fast modem, bypassing the computer completely. WebTV still has a way to go, but it's here and it works surprisingly well. It's hard to take predictions of the Web's mortality seriously until a product as promising as this has a chance to prove itself.
Oct. 29: America Online Unveils New Pricing Plan -- After insisting for years that it would never give up the hourly charges that have provided it with the largest revenue stream in the business, AOL finally offers its users a $20-a-month flat rate. AOL will also give you access to its content for $10 a month if you already get your Net access from someone else.
AOL's announcement marks the final death-knell for the old model of the proprietary online service. Like Prodigy and the Microsoft Network, AOL is now trying to reposition itself as, in effect, a truly gigantic Internet service provider with a really big Web site of its own. It just might work. Though it may be hard for AOL to turn a profit this way, it's a shrewd move that should help the service hold on to more of its subscribers. They now have little reason to leave AOL for cheaper flat-rate local Internet providers -- that is, assuming AOL can provide more reliable, responsive and speedier service. AOL's decision got less press than Microsoft's transformation into an "Internet company" this year, but it's just as momentous. AOL was the final holdout against the Web; now everyone in the online universe accepts the Web and its related technologies as common ground. The merging of AOL and the Web will bring the Web closer than ever before to mass-market size. It's a sign not of death but of adaptable life.
Nov. 1: Voyager Plans Staff Cuts, Suspension of CD-ROM Publishing -- The trade press reports that the leading publisher of creatively ambitious CD-ROMs will leave the business and return to its original, profitable line of videophile laserdiscs. Rumors of possible buyouts fly.
When the CD-ROM publishing boom was in full swing three or four years ago, Voyager won awards and led the industry. It's still the only company to produce consistently interesting, worthwhile "multimedia." But it was never able to make much money in the business -- whether because of CEO Bob Stein's determination to subsidize unprofitable but intellectually adventurous projects, or simply because the entire CD-ROM marketplace never took off. The lesson here for the Web is that high-quality publishing can only survive on its own merits for so long; sooner or later, somebody has to start making money. Right now the Web is flush with ambitious original ventures like Hotwired, Slate and Salon; they could all go the way of Voyager unless they figure out how to transform users' attention into dollars -- whether through advertising, as most sites hope to, or through subscription, as Slate keeps promising to try. That even Slate -- backed by Microsoft's fortune and technology -- hasn't yet dared test its readers' loyalty by slapping on a subscription fee is a sign of just how daunting this step remains. Microsoft blames the delays on billing bugs. But it's hard to believe that, if everyone at Slate were gung-ho to start charging, the most successful software company in the world couldn't make billing work in a hurry.
Nov. 1: British Telecom Announces Plan to Purchase MCI for $20 Billion -- As C|Net reported it: "The combined company, to be called Concert, will have sales of $42 billion, 183,000 employees, and 43 million customers in 72 countries. The global giant will provide long distance and local phone service, wireless phone connections, Internet access, videoconferencing, and multimedia services, among other offerings."
A story like this reminds us that the growth of the Web is taking place in one small corner of a much larger picture of telecommunications deregulation and globalization. We stand only at the beginning of a long, accelerating spiral toward what technologists call "increased connectivity" in the form of digital telephony, wireless communications of various kinds and other developments we can't even imagine. Just as the rise of the online world is beginning to force change upon older media like TV, radio and print (as those media in turn changed their predecessors), the Web will inevitably change as other technologies leapfrog it. Still, the arrival of each new medium has never meant the death of the ones that preceded it. Even if the Web finds itself forced into a niche by some whizzier, more profitable network that supplants it next year or next decade, it's unlikely to disappear. Too many people and companies have put too much of themselves into it. Next: If we're not dead yet, what are we going to do with our lives? |