Reuters carried a corrected version of yesterday's story on HTSF:
CORRECTED-Tiny Heartsoft aims at browser market
Wed Dec 01 18:47:00 EST 1999
In Dallas item moved Nov 30 headlined "Tiny Heartsoft aims
at browser market", in final paragraph please read as, "He
would not say whether Heartsoft would be profitable in its
current fiscal year, which has been changed to end on June 30,
2000. Heartsoft has not released revenue projections for sales
of its new Internet Safari children's Web browser but said a
projection reported by Reuters on Tuesday of $1 million in
anticipated revenues over the next three years is substantially
below anticipated results for the browser" ... instead of ...
"Although he would not say whether Heartsoft would be
profitable in its current fiscal year, which has been changed
to end on June 30, 2000, he projected as much as $1 million in
revenues from Internet Safari in three years."
(Correcting to show company did not project $1 million in
revenues from Internet Safari in three years)
A corrected story follows.
By Candace Talmadge
DALLAS, Nov 30 (Reuters) - Heartsoft Inc. , a tiny
Tulsa, Okla.-based educational software developer that has
until now targeted schools and hasn't been profitable for the
past two years, is about to launch its first consumer product.
But it's a risky move, since the product is an Internet
browser designed specifically for young children.
Industry analysts say the market is drying up for browsers
that come in boxes instead of pre-installed on desktop
computers or obtained for free via the Internet. Moreover, the
overall Internet browser market is dominated by two titans,
Microsoft Corp. and the Netscape Communications unit
of America Online Inc..
Annual U.S. sales of child-oriented Internet utilities,
which would include Internet access blocking software, are just
$25 million, according to Roger Lanctot, director of research
at PC Data Inc., a Reston, Va.-based market research firm.
Undeterred, Heartsoft derives its basic marketing strategy
from its background in educational software, a much bigger
market. According to Denver-based Quality Education Data Inc.,
U.S. public schools are spending $539 million on software in
the current academic year. With that in mind, Heartsoft plans
to promote one version of its product, called Internet Safari
and designed primarily for children ages four to 12, through
its relationships with elementary and middle schools in the
United States and Canada.
Quality Education estimates that U.S. public schools are
spending $347 million on Internet access in this academic year,
as classroom Internet access has jumped from 34 percent in the
prior year to 57 percent in 1999 -- a 67 percent increase.
About 58 percent of U.S. public schools use filtering software
to lock out objectionable Web sites, according to Quality
Education.
A consumer version of Internet Safari will be available in
the first quarter of 2000 at a price of about $29.95, said
Benjamin Shell, Heartsoft chairman and chief executive officer.
The product may fit into additional markets as well. "We
just had three companies come to us to license our browser
technology," said Shell.
The difference between Heartsoft's browser and existing
software that blocks access to certain Web sites is how the
product approaches the task. Most existing software filters
sites by comparing each page against a database of
predetermined Web sites or certain words.
Internet Safari, which Shell said cost about $300,000 to
develop, uses proprietary image detection technology that
incorporates artificial intelligence to do the screening.
Educators or parents can set the browser's tolerance level for
elements such as nudity, profanity, sex, drugs, violence and
hate crimes.
"If there's a way to do this in the browser, artificial
intelligence is it," said Ted Schadler, group director of
research at Forrester Research Inc., a Cambridge, Mass.
consulting firm.
The Internet Safari is much simpler than other browsers.
Its graphics are specifically oriented for youthful users.
"Children need their own interface," said Nita Seng,
Heartsoft's vice president of sales and marketing. "They don't
think like adults."
Heartsoft admits it can hardly ignore the dominance of
Microsoft's Internet Explorer or of Netscape's Navigator, which
currently split the U.S. market.
"I'd be stupid to ignore Microsoft's possible entry into
the kid browser market," Shell acknowledged. However, he
contended that Microsoft is not very strong in the education
market, and said that any competitor would need more than a
year to develop something comparable to Internet Safari. He
also said Heartsoft is considering developing image detection
plug-ins to work with Explorer and Navigator.
PC Data's Lanctot said children's products is the one
sub-segment of the browser market in which there is still a
viable opportunity to sell a product instead of giving it away.
Heartsoft is getting a capital infusion from private
investors and plans to spend at least 80 percent of it on sales
and marketing for the browser and other new educational
software. With an overall marketing budget of up to $750,000
for 2000, the company will use direct mail, Internet banner
advertising and trade shows, Shell said.
Its major effort for Internet Safari will be to ship 5
million CDs containing a 30-day demonstration version with
consumer computer magazines. Shell said Heartsoft hopes to
match other software companies' purchase conversion rates of up
to 30 percent from similar direct marketing programs.
In the fiscal years ending March 31, 1999 and 1998,
Heartsoft posted losses of $527,000 and $463,448 respectively,
which Shell attributed to the costs of research and development
of Internet Safari and other software and changes in accounting
methods. He would not say whether Heartsoft would be profitable
in its current fiscal year, which has been changed to end on
June 30, 2000. Heartsoft has not released revenue projections
for sales of its new Internet Safari children's Web browser but
said a projection reported by Reuters on Tuesday of $1 million
in anticipated revenues over the next three years is
substantially below anticipated results for the browser.
((New York Advertising Desk, 212-859-1886))
REUTERS
Rtr 18:47 12-01-99
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