IQ News: Pushed Two Directions – The next Web battleground confronts publishers.

By Anya Sacharow

Internet publishers are on the horns of a dilemma. The two biggest forces on the Web, Netscape and Microsoft, are about to butt their powerful heads over the standard for ‘push’ technology. Hyped as the latest evolution of the Internet, push is a delivery model that should be well understood and accepted by media consumers and creators alike (along with advertisers), since it provides desired content through themed channels on the Web, rather than requiring the befuddled user to surf aimlessly.

On April 15, Netscape forged ahead, announcing that the newest version of its Web browser, Communicator, will include a push feature called Netcaster. It disclosed an initial group of Web publishers to be given dedicated ‘channels’ on its browser. Prominent partners include the soon-to-launch ABC News Web service, CNNfn, Hearst’s HomeArts Network, HotWired and CBS SportsLine. By the time of Netcaster’s official release in June, other content providers are expected to be allied with Netcaster, such as CondeNet, CNET, International Data Group, Time Inc. New Media, Travelocity, and Ziff-Davis’ ZDNet.

‘Netscape has the largest site on the Net, with more than 4 million visitors daily,’ says Mike Homer, its senior vice president of marketing. ‘That’s one area where we have Microsoft by a long shot. We can promote publishers’ channels to these visitors on an ongoing basis. We have 55 million users of the Navigator (the current version of its Web browser). The vast majority of them we expect will upgrade to Communicator over the next six months.’

Microsoft, of course, is not ceding the push market to its foe. Its forthcoming browser, Internet Explorer 4.0, will integrate push capabilities for webcasting into its desktop features. When Explorer 4.0 rolls out later this summer, channel providers will include MSNBC and the PointCast network. PointCast is a push service unto itself and already offers The Wall Street Journal Interactive Edition, the Los Angeles Times, Wired and about 20 other digital news sources.

While the high-tech giants are scrambling to ally themselves with as many software developers and content players as possible, the media publishers are trying to figure out what’s best for them. ‘As a content provider, we’re working with a range of companies,’ says Brian Sroub, vice president of marketing at Hearst New Media & Technology. ‘We are trying not to get locked into one newsstand but get into as many newsstands as possible.’ Besides launching a channel on Netcaster, Sroub is also in talks with Microsoft.

The Web itself has echoed with dialogue that cautions against taking sides. ‘One way to win is to get into position where you can say yes to everyone,’ wrote Dave Winer, publisher of Scripting News, an electronic newsletter for on-line software developers. ‘We said yes to Microsoft. But don’t miss this point–we also want to align our software with (other push providers like) PointCast, Marimba and Netscape, too.’

Although the basic concept of push on Communicator and Explorer is similar, there are tactical and technological differences. Microsoft is gathering forces behind a new industry standard for delivering Web pages called channel definition format, or CDF. Netscape says this is irrelevant, because its channels are created with existing Web software tools. Each company calls the other’s technology limited or flawed.

For publishers, the looming danger is that they will have to produce two incompatible versions of their sites if they want to cover the entire Web waterfront. ‘The standards are different enough that if you want to support both, you have to do two separate sites,’ says Jesse Berst, editorial director for ZDNet’s AnchorDesk. ‘The cost is actually quite high if you do two push editions, when you add everything in. And you hate to post something that can only be read by a certain percentage of individuals.’

Homer argues that Netscape’s wide reach and its earlier debut of ‘push’ will give publishers strong incentives to join up. ‘A lot of the folks have contractual agreements with us to optimize their sites for our pages,’ he says. ‘They may do other sites for Microsoft. (But) if someone wants a premiere spot in the channel finder, then we may attach that to a more comprehensive agreement that includes the purchase of some of our software. We tend to promote our customers better than folks who are non-customers.’

The business models for push are evolving. Because the competition to build a popular network of channels is so intense, neither Netscape nor Microsoft is charging upfront fees to publishers to broadcast their channels. (Netscape will charge for premium placement on its service.) With Netcaster, some channels will sell ad sales based on traffic; some will use direct subscriptions to generate revenue. Most likely, publishers will strike deals like the ones the major search engines have with Netscape. In return for a place on Netscape’s much-visited Web real estate, the search engines have contracts valued at about $5 million each, a large chunk of which is provided in ad barter, rather than cash.

In time, the PointCast model may take hold with the newcomers. Publishers sign on for free to deliver content via PointCast, sell ads based on PointCast traffic, and PointCast takes a cut of the ad dollars. PointCast claims more than 1 million active monthly viewers and says ad sales for its affiliates’ channels, such as CNN and The New York Times, were up 150 percent from last quarter 1996 to first quarter 1997.

The Wall Street Journal Interactive Edition, which has a channel on PointCast and is one of the few publishers successfully charging fees for its own site, is taking a wait-and-see attitude toward this new battleground. ‘We’ve looked at the direction Microsoft is going in,’ says Tom Baker, WSJIE’s business director. ‘We’re not ready to announce which direction we’re going. We look at the business model to see if it fits with what we do. What winds up being a primary consideration is how much work we’ll have to do as publishers to go into the new environment.’

Ultimately, the push decision may be rendered moot by a compromise between the two formats that make them compatible. Or Netscape and Microsoft may still try to win the contest outright, which could force publishers to make expensive, redundant bets. But most participants agree that push is a key to the Web’s future. ‘Personalization of delivery is the powerful aspect of push,’ says James Kinsella, general manager of MSNBC on the Internet. ‘It’s a different way to think about it. Push sets up a broadcast model, and the combination of push with personalization (can) completely change the way people think and consume’ information.

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