Bill, did you get your latest e-mail of "Above The Crowd"?
Here are some "choice cuts" from the latest issue, which has some very interesting things to say about Chairman Bill's billion dollar baby:
MAKING SENSE OF MSN: THE POWER'S IN THE PORTAL
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"The economics behind MSN are still somewhat unclear.
Microsoft claims to have 1.6 million users. At $19.95 a
month, this equates to a business with a run rate of just
over $380 million dollars. Microsoft admits that MSN is
currently losing money, and a $100 million advertising
budget will make certain this is so. Surprisingly, MSN has
had little affect on Microsoft's income statement. This may
be because the company accounts for MSN by charging the
difference between revenues and costs as a R&D expense,
rather than recognizing MSN as a standard revenue generating
business. "
*************
"We would now like to introduce our "Power in the Portal"
theory. If you speak with AOL, or @Home, or WebTV, you will
notice one interesting and congruent theme. All three of
these hybrid access/content providers believe that there is
substantial value in providing the "portal" to the Web. In
other words, by controlling the user's first look at the
Internet, you can direct where people might want to go, you
can gather a substantial amount of information about where
users have been, and you can predict what they might like to
see."
**************
"Looking forward, we suspect that MSN and the super-browser
will land square in the middle of the desktop. We assume
you are familiar with Microsoft's plans to integrate IE 4.0
into the desktop. Well, we see no reason why this strategy
will not be extended to include MSN. . . .
"Inclusion of Microsoft controlled pointers on the desktop is
a very powerful thing. Think about this like permanent
entries in your bookmark file -- a Microsoft controlled
yellow pages to the Web. Most of the search engine
providers charge businesses that wish to have predominant
positions in their menu hierarchy, which is similar to
paying your RBOC for a larger advertisement in the local
yellow pages. This obviously leads back to my previous
question regarding how Microsoft will be able to attract
content providers. If ESPN would like to be the first entry
under "sports" on the Windows desktop menu bar, they may
need to join the MSN network. Not interested? Somebody get
Sports Illustrated on the line."
******************
"Once again, this line of thinking leads us to consider even
another point. What will prevent Microsoft from giving
preferential treatment in its menu tree to businesses that
are more willing to adopt Microsoft's traditional software
products? Thinking about choosing an Oracle on UNIX
implementation over SQL Server on NT. We hope your
competitor does not choose the entire Microsoft Backoffice
solution. You may find yourself much further away from the
top of the desktop than you would like."
***************
"We want to make it clear that our ideas are purely
conjecture, as Microsoft has made no announcement that it
intends to follow a strategy such as the one that we have
proposed. However, we did find the following Bill Gates
quote in the June 14, 1993 issue of Fortune: "Microsoft's
holy grail is to provide the Yellow Pages for an electronic
market-place of on-line information systems."
"Above the Crowd is a bi-weekly publication focusing on the
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