Copyright 1999 P.G. Publishing Co.
Pittsburgh
Post-Gazette
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January 24, 1999, Sunday, TWO STAR EDITION
SECTION: BUSINESS, Pg. D-3
LENGTH: 1018 words
HEADLINE:
IT'S ALL ABOUT SPEED;
MAKING SENSE OF LAST WEEK'S INTERNET WHEELING AND
DEALING
BYLINE: FRANCES KATZ, ATLANTA
JOURNAL-CONSTITUTION
BODY:
The turn-of
the-century Internet has a brand new buzzword: broadband.Last week two Web
"portals," Excite and Snap, made deals that commit them to a future of
incredibly rapid access to the Internet - called "broadband" because it allows
content to travel especially quickly over a wide, or "broad," frequency
spectrum.
But each chose a different path, and not even the sharpest
Wall Street analyst can say which took the better road.
The choice is
important because as Internet users become more sophisticated, viewing the
Internet as a utility rather than a hobby, their need for speed becomes more
urgent. And broadband access - whether over a cable wire, telephone line or even
satellite hookup - is far faster than today's dial-up connections. America
Online, with 15 million subscribers, rules the current dial-up Internet world.
Excite and Snap have bet their futures on this brave new broadband world.
Both sites aim to be starting points, or "portals," for Internet users,
and collect news, information and such features as chat and shopping on a single
site. The fact that both sites are betting on broadband may force the industry
to advance faster than has been predicted.
Excite chose to side with
cable-modem technology and scored a deal with the At Home network, the
cable-modem arm of cable giant Tele-Communications Inc. Excite will become a
wholly owned division of At Home.
Excite CEO George Bell says the
acquisition will give Excite a leg up on the future of residential Web service.
Even though At Home has only 310,000 subscribers and doesn't begin to match the
reach of portals such as Yahoo! or AOL, Excite believes it has seen the future -
and it is broadband.
At Home Network Chief Executive Tom Jermoluk,
meanwhile, says the Excite acquisition gives the combined company the marketing
reach and consumer-name recognition necessary to make 1999 a "big breakout
year." In December, according to the research form Media Metrix, Excite's site
logged some 14.4 million visitors.
Then there is Snap, a joint venture
of NBC and CNet, a computer news and information Web site. It is far less
popular than Excite, attracting some 5.4 million visitors in December, and is
staking its future on access over telephone lines using asymmetric digital
subscriber line (ADSL) technology.
The company announced it was
developing a new, free portal service, called "Cyclone," designed for
higher-speed Internet users, such as those on T1 lines and ADSL subscribers.
Snap already has agreements with Bell Atlantic, SBC Internet Services
and others for access. For content, its partners include iVillage, Preview
Travel and Tower Records, which will use Snap to showcase and sell their goods
and services with high-quality video, audio, games and animation.
CNet
President Halsey Minor says the new service will let consumers view video clips
of travel destinations or video previews of TV shows - all available over the
Net.
Broadband users still remain a tiny fraction of the 56 million Web
users. But it's getting harder to find anyone in the industry not considering
getting into the broadband game. High-speed access via either phone or cable
providers is the way people will access the Web in the future, analysts say.
"Excite is a mass consumer brand, and it will definitely be a crucial
marketing and promotional brand for broadband," says Jupiter Communications
analyst Patrick Keane. Previous Jupiter studies estimated 78 percent of Web
users will still be using dial-up access providers until at least 2002, but
Keane says deals like these could speed up broadband
deployment.
Keane wonders aloud whether other portals, such as
Yahoo! and Lycos, should think about forming a broadband alliance.
But
Jeff Mallet, for one, says Yahoo! will remain independent. The president and
chief operating officer of Yahoo! - the Web's second-most popular site,
according to Media Metrix, after America Online - questions some of the logic of
theAt Home-Excite deal, as might be expected from a competitor.
"To me
it seems that At Home has a high-speed version of the AOL model," Mallet says.
"You have to come and look at their content, and then they'll let you squeeze
out through the Web. I think that's a pretty antiquated idea.
"We made
the strategic call years ago that we shouldn't tie ourselves up with one access
point," Mallet says. "Even if we are not the primary access point, you can still
find us. It's a better strategy than finding an Internet service provider or a
broadband partner because you are solely relying on their success."
Mallet says Yahoo! had spoken with At Home about a possible alliance but
opted out. But with so many portals popping up on the horizon, he says, Excite's
decision to bank on broadband might be a smart move. "They're betting on the
future, not on today."
Mike McQuary, the president and chief operating
officer of Mindspring, an Atlanta-based Internet service provider, sees a
possible problem stemming from At Home's dual role: It is a content provider as
well as an Internet service provider. At Home subscribers can't choose their
Internet service provider, unlike users of, say, Excite.
Thus McQuary
says the Excite acquisition may signal a strategy change for At Home.
"At Home was looking for a content provider," McQuary says. "That means
they may see themselves eventually becoming a content provider, not necessarily
an access provider.
"Their role could eventually shift from access
provider to content provider," he says. "It's not that exciting to get
high-speed access if all you get is faster e-mail. With high-speed access, the
content has to be even more compelling."
Of course, McQuary is not
simply a disinterested observer. MindSpring and other dial-up Internet providers
argue that broadband users should be able to choose their access provider the
same way they do now.
"At Home may be looking at their future where ISPs
have equal access," McQuary says. "There is a parallel to the cable-TV model. A
company like MindSpring could be your ISP, but At Home might be like HBO."
GRAPHIC: DRAWING, DRAWING: By Daniel
Marsula/Post-Gazette (no caption)
LOAD-DATE: January
26, 1999 
