Tangled Webs
When Push Comes to Shove
Apr 30, 1997
Issue 2.6

Deja Vu

Less than two years ago, investors were sinking millions of dollars into Internet companies with neither salable product nor prospect of turning a profit in the immediate future. Yahoo's IPO is perhaps the best example of this feeding frenzy. Yahoo had become virtually synonymous with the Internet, and while many investors didn't really understand the company or the Internet, they knew it was the Next Big Thing, and they want to be in on it.

Investors, however, are a savvy bunch, and after getting burned repeatedly by such IPOs, they are no longer throwing money at every Internet company that comes down the pike. Now they are throwing money at push-media. Sure, they might not fully understand it, but they know it's the Next Big Thing, and they want to be in on it.

Rupert Murdoch's News Corp. has offered to buy Pointcast for somewhere between about $350 and $450 million. Half-a-billion dollars for a program that delivers sports scores to a screen saver seems excessive to me, but what do I know? Pointcast, by the way, has stated that it is not for sale.

In a few years, Murdoch will be thankful the deal fell through. As far as I can tell, most people involved in traditional broadcasting don't really understand push-broadcasting, although developers are working hard to convince them that the two forms of broadcasting are basically the same. Push-media companies have even adopted familiar sounding terms like "channels", "tuners", and "viewers" rather than arcane terms like "sites", "browsers" and "hits".



Here We Go Again
Pointcast has the best brand recognition among push-media companies, but there are actually about a dozen companies in the field. These companies are now gathering into two camps, and we are about to see another Internet showdown. A showdown centered on -- but of course -- Microsoft and Netscape.

Microsoft has aligned itself with Pointcast and is pushing the Channel Definition Format (CDF). CDF allows anyone to be a push-broadcaster -- provided they are willing to distribute through Microsoft or Pointcast. Microsoft has stated that CDF will be be a part of Active Desktop, which means the channel tuner will be built into future versions of the Windows operating system itself. This will leave Mac and UNIX users out in the cold, but they will still be able to receive and broadcast channels through Pointcast, who will soon allow the creation of personal channels.

Netscape Netcaster, to be released in June takes a different approach: Open standards and open distribution. With this scheme, no company or group of companies can control distribution of or access to your broadcast because it's all done via standard protocols. No one owns the standards, and unlike CDF, you don't have to buy special server software. All you have to do is add a few lines of JavaScript to your web page, and you become a push-broadcaster.

Microsoft and Pointcast will be pushing hard for CDF in the coming months, and technically speaking, it is a far more efficient protocol. However, I believe the universality and openness of Netscape's model will win out. It seems many push-media companies think so too. At least five have announced that they will be retooling their products to use the standards proposed by Netscape.

There are already dozens of channels using Netcaster standards, and by the end of the year, there will be thousands, perhaps tens of thousands. This is why many investors are going to get burned by investing in push media.



The More Things Change...
Traditional broadcasters can make huge profits only because broadcast spectrum is scarce. Scarcity ensures that the broadcasting industry will be controlled by only a handful of companies. In push-broadcasting, however, anyone can get into the business, and they can do it for free. Companies entering the push-broadcasting market thinking it is even remotely like traditional broadcasting are in for some big surprises.

Push media will not turn the web into television. Sure, we'll have Pointcast push-broadcasting headlines and major league sports scores, but we'll also have proud parents push-broadcasting highlights of home town little-league games. The Web will retain all the chaos and serendipity that distinguish it from every other medium in history. And Investors will scratch their heads and begin looking for the next Next Big Thing.


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