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To: cm who wrote (7186)	7/21/1998 9:03:00 AM
From: cm	Read Replies (3) \| Respond to of 9343

Repeating Myself Is Fun... Repeating Somebody Else Is Smarter... I snagged this bit a while back from an old Forrester Group interview with Pat Naughton, Starwave's CTO. I think it bears repeating in the light of recent events. Please note the answers to questions about how Starwave was generating revenue. And note the last answer about the fact that Starwave holds a pretty key bit of information about buyers on Disney sites. ******** Report From The Internet Frontlines Patrick Naughton, president and CTO, Starwave Corporation, talked about the challenges of building Tansactive Content for Disney Online. Today, elements of Transactive Content exist at vertical sites, but it's still confusing for users, and the elements are not yet integrated. The future of on-line publishing will be a real-time combination of content, user involvement, and transactions. Content will live in constantly updated databases and be tagged to be "smart." Smart content will give users strong portable identities, which allow the users to be recognized from home, work, laptop, or the airport. Today, serving targeted advertising is a transaction; tomorrow, merchandising that uses context and user history will produce frictionless commerce. Internet companies need to adopt the concept of federation, defined as a framework for cooperation. Because Transactive Content is the key to maximizing revenue per user, isolated boutique on-line products will fail to gain enough reach and frequency to attain critical mass. Participating in the broader federation of Transactive Content partners is a win-win-win for the site, the portal, and the user. End users ultimately win by having a single identity, reducing the number of steps they have to take to get things done. Quotes and facts - "Starwave serves more than 100 million impressions per week to 16 million unique visitors." - "Privacy is a very serious issue and big companies are taking the high road, but people worry about the second-tier companies." - "Doing Transactive Content right costs a lot more." - "Across the board, auditing still a problem. There is still no real way to measure transfers, people, and traffic. Just think how painful it gets when real dollars are changing hands." - "The biggest difference between now and 2001 is that the Web will be more like AOL." Q: How are you making money? A: Advertising. We spend a lot more effort on ad sales. Today's mix is roughly 70/30 advertising to subscriptions. Churn on the subscription services is very low -- we have annual renewal rates of over 90%, and these customers show incredible propensity to make multiple purchases. Q: Which software vendors do you use to create Transactive Content? A: Almost none. Our publishing and commerce systems have been built in-house. The long-term goal is to replace some homegrown tools with off-the-shelf software. Q: The audience thinks a standards body should control Java. Who do you think should control Java? A: People don't realize that standards bodies don't work. The risk of standardizing before implementing is that innovation stops. Is it time to standardize now? No, it's time for Java to be turned over to a consortium of all the key players. Q: What are the next steps for building cross-site sharing of user profiles? A: Big companies have to cooperate, but it's not yet happening at the top levels. At the medium levels, we are talking with our peers to figure out this problem. Starwave's commerce system is the domain for all profiles for all Disney sites.