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Re: pointcast and Murdoch (fwd)
Here's a former News Corpsman's take on Pointcast and Murdoch. Vin offers
quite a bit of coool insight (in several senses of cool). Of course,
there are several future events on which his analysis rests (second
generation push must be widely accepted, MicroSoft's standard must be
adopted widely, Pointcast must not adapt readily to those events, News
Corp must get a clue....). I watched News Corp kill Delphi when it should
have grown wildy so I'm a doubter; tho less of one than James Gleick or Bert.
P
---------- Forwarded message ----------
Date: Mon, 24 Mar 1997 18:32:58 -0500
From: Vin Crosbie <crosbie@well.com>
It is reportedly not over yet. Since you asked, here is the logic behind it:
1. News Corp.'s goal is to leverage or transplant into online its
existing modes of print, broadcast, and cinema businesses.
2. These modes are one-to-many, with little interactivity, and
PointCast's 'push' distribution model nicely matches these modes.
3. Revenues for traditional print and broadcast media have been driven
by delivering 'eyeballs' to advertisers. PointCast has a weekday daytime
audience of over a million pairs of 'eyeballs', equal to a mid-sized U.S.
television cable network. (It might seem ridiculous to call unused personal
computer monitors that have gone into screensaver mode an 'audience', but
this not unlike how Nielsen Media Research calculates TV viewership:
according to if a TV set is tuned to a particular channel, not necessarily
if anyone is actually watching that TV set.)
4. Twelve to six months ago, those three points might have made
PointCast a good target for acquisition by News Corp. It might have made
sense. As News.com put it, News Corp. has been 'groping for an online
strategy.' The company historically has been unable to fathom interactive
media. It lost US$200 million to $250 million on its Delphi/MCI/Iguide
debacle.
Although the papers in New York and Los Angeles and the Wall Street Journal
sourced the story as fact, PointCast CEO Chris Hassett called the attempted
acquisition just a rumor and says his company still plans an Initial Public
Offering this Spring. Nevertheless, Hassett has to have been considering
the hard choice of several hundred million dollars in cash from News Corp.
versus only a possibility of more from an IPO. PC World magazine now
reports that he's still considering it and that News Corp. is sweetening
the offer to US$500 million.
Yet, it seems clear to me that PointCast's unique value has eroded
significantly in the past six months, make an acquisition by News Corp.
naive. PointCast is the sole member of the first generation of 'push', a
lead which meant it clearly has the largest number of users. However, the
second generation companies (IFusion, BackWeb, Intermind, InCommon, etc.)
offer consumers, advertisers, and content providers better display,
animation, and branding or give any content provider the ability to create
their own branded Pointcast-style service. Utilizing these established
second-generation technologies, News Corp. could create its own 'pointcast'
for far less than US$300 million to $500 million, particulary when aided by
promotion from News Corp.'s traditional broadcast media. Moreover,
Microsoft's new proposal of a common CDF 'push' format for all vendors, to
which PointCast and most of the second generation competitors have agreed,
immediately makes PointCast's existing installed base of technology dated.
Acquiring PointCast 12 to 6 months ago for $100 million might have been a
savvy move. Acquiring it now for up to $500 million begs some questions
about News Corp.'s technological, marketing, and mergers & acquisitions
acumen. Although its News Corp.'s Technology Group is based in Silicon
Valley, its Internet efforts during the past year have been driven from the
Twentieth Century Fox broadcast & cinema lot in Los Angeles where, I
daresay, certain executives have begun reading Wired with the same adultory
insight that they once read Variety. If Wired says 'push' is the future,
how much for the studio's rights to option PointCast?
(Disclosure: former director of media partnerships, Delphi Internet
Services under News Corp.'s administration).
Moderator of the 'Content Push>Pull' panel of CEOs from PointCast, IFusion,
BackWeb, Intermind, etc., at the Spring '97 VON Conference, April 1-3, Ritz
Carlton Hotel, San Francisco ( http://www.pulver.com/von97/ )
______________________________________________________________
Vin Crosbie 1284 Beacon Street
President Suite 709
DIGITAL DELIVERANCE Brookline, MA 02146 USA
New Media Consulting 1 617 975-0101
Specializing in Deliverance & 'Push' models crosbie@well.com
Content should come to the consumers, not consumers to content
No commercial medium has ever survived without delivery.
http://www.well.com/~crosbie