November 27, 1998
Tech Week
Latest Megamerger Leaves
The Net Utopians Howling
By JASON FRY and TIMOTHY HANRAHAN
THE WALL STREET JOURNAL INTERACTIVE EDITION
Once there was a company called Netscape Communications Corp.
Once, but not much longer. Netscape, which made the Web browser a
household item, jump-started the Web as a popular destination, and which set
the standard for Internet stock frenzy, agreed to be acquired by America
Online Inc., the world's largest online service, in a $4.3 billion deal that sent
shockwaves through the Internet community and threatened to turn the Justice
Department's trial of Microsoft Corp. on its ear.
In the wake of the megadeal came concerns. Did the merger indicate, as
Microsoft attorneys argued, that no company -- however gargantuan its market
share -- can ever hope to control the Internet? Or did it indicate, as Justice
Department officials argued, that Microsoft's predatory conduct had so broken
a competitor that it was forced into the arms of another dominant company?
Concerns came from other sources. The Nader-allied Consumer Project vowed
to fight the deal, foreseeing a time in which AOL could use licensing fees for
Netscape's browser to hold its smaller rivals in the Internet-access business
hostage. Cyber Dialogue, a New York market-research firm, pointed out that
the deal meant one of three U.S. adults who go online will begin their sessions
on a page controlled by AOL. Microsoft foes fretted that AOL would skimp
on further browser development, giving Microsoft's Internet Explorer a huge
R&D edge.
But some of the noisiest protests came from the Internet old guard.
Different critics put it different ways, but all of them were glosses on the real
message, a message that was simple and ugly: For all their talk about freedom
of expression and the egalitarianism of cyberspace, the Internet old guard
doesn't want the online world to include anybody who isn't either like them or
willing to become like them.
Anybody who's witnessed the damage done to Usenet newsgroups by the twin
evils of junk postings and rude posters can certainly understand the longing for
cyberspace's more civil age. But it's a message that's not very egalitarian --
and it's one that would be laughed out of the boardrooms of the companies the
old guard holds so dear.
High-tech utopianism was born at
Hewlett-Packard Co., with its
up-from-the-garage origins and its officeless
headquarters, but it got its real start with Apple
Computer Inc. and Steve Jobs.
Yes, Apple banished line-by-line computing to
the history books and made the personal
computer a tool for more than engineers and
businesspeople. It deserves everyone's thanks for
that. But rarely has a company's message been so
hollow. Apple never missed a chance to beat out
a fanfare for the common man about "the
computer for the rest of us" while continuing to
offer computers that were more expensive than
the choices the rest of us had. (When challenged
once too often about price, Apple's Jean-Louis
Gassee let his basic contempt for the consumer
show, snapping that "we make Hondas, we don't make Yugos.") It was Mr.
Jobs who delivered the ultimate corporate put-down by asking John Sculley if
he wanted to spend the rest of his life selling sugar water, and it was Mr. Jobs
who famously complained that the real problem with Microsoft was that it had
no taste. (Which was largely true, demonstrating the rather obvious point
when one is selling a product, basic corporate discipline is a lot more
important than taste.)
Mr. Jobs has largely abandoned such stuff in his second go-round at Apple
(though the obnoxious "Think Different" campaign was an exception), and the
result is obvious in Apple's now-healthy bottom line. But long before his
return to Apple, high-tech utopianism had spread to the Internet.
The Internet lends itself to big ideas, and it should: If you're jaded with the
idea of a decentralized network that puts the world onto a computer screen and
gives everyone a chance to be not only a consumer but also a producer, shame
on you. The Net's early adopters saw the beginnings of a revolution that was
not only technological but also social. To them, "disintermediation" wasn't
about shopping for airline tickets, but about eliminating politicians and
tastemakers and biased media and a host of other ills that sprang from a world
in which mass communications were essentially one-way.
But a funny thing happened on the way to utopia: People behaved, well, like
people. They spelled things wrong and didn't read the manual and asked silly
questions that had been asked before. And they often seemed more interested
in pornography and shopping (thanks in part to banner ads, which were
brought into the world by the Web site of digerati darling Wired) than they
were in being active participants in some kind of post-modern Athenian
democracy.
And if there was one company that took the blame for it, it was America
Online. It was AOL that dared to make cyberspace accessible, and it was
AOLers who then dared to actually visit newsgroups and set up Web pages and
fill chat rooms and take advantage of a new medium. Not surprisingly, once
AOL won the Internet-access race -- being the only truly large competitor that
was also competent -- the Net then rapidly became like AOL, which was to say
it became more like the world (or so far, more like the U.S.) When members
of the Internet old guard then fervently wished that all those AOLers would go
away, their true philosophy was revealed: not egalitarianism, but elitism.
And so now, the unthinkable: AOL, this tasteless, white-bread product for
grandmas and teenagers who wouldn't know their TCP/IP from their HTTP,
dares to buy Netscape! Netscape, which gave its browser away, Johnny
Appleseed-style, and which thumbed its nose at Microsoft, the Darth Vader of
the Web, the enemy of diversity and freedom of expression.
Such high dudgeon made for good copy, but it betrayed a laughable naivete
about Netscape.
Yes, that particular corporation started with Marc Andreessen, one of the
genius hobbyists at the core of all technological revolutions, and with Mosaic,
his college-built program for navigating the Internet. But Netscape was never
a dream or a vision -- it was a company, established by Jim Clark, the canny
founder of a workstation maker. Its browser was code-named Mozilla -- short
for "Mosaic killer -- and it was given away to grab market share and to create
a base of users that would then buy other programs.
That Netscape assumed the mantle of guardian of freedom and diversity online
has to do with a couple of factors, chief among them Jim Barksdale's unerring
eye for PR and Microsoft's knack for being graceless and ruthless at the same
time. But those factors never had anything to do with the company's mission.
Reflecting on Netscape's life and times, Mr.
Barksdale noted that "the real point is that we
have built one hell of a company, with $4 billion
in value in 39 months, and you can't say that about a lot of others."
Yes, that is the real point: Netscape was founded to make money. Netscape
tried to make money giving its browser away, and then it tried to make money
charging for it, and then it tried to make money giving it away again while
building up a portal site and selling other software, and in the end the best way
to make money proved to be selling the whole thing to someone more
successful, so that's what Netscape did. That's what it was supposed to do.
Some at Netscape, to be sure, did too much listening to the hosannas sung by
the Net utopians and the rabid Microsoft haters. That attitude contributed to
Netscape's woes -- and it's something Netscape will have to get over if it's to
succeed as a unit of the pragmatic, square AOL.
"A lot of us were wrong about AOL," Netscape Executive Vice President Mike
Homer said this week. "We know now that there is a lot we can learn from
them."
Like, perhaps, how to get the most people to take part in this miracle called the
Internet. A question for the Net utopians: Wasn't that the whole point?
Tech Week: Hardware and Software
Microsoft and well-known journalist James Fallows are in talks to develop
software for authors writing books and articles (see article).
Applied Magnetics Corp. signed a definitive agreement to acquire DAS
Devices Inc. for about $90 million in stock. The companies say the deal will
marry DAS's next-generation technology with Applied's extensive
manufacturing facilities (see article).
Xerox Corp. is in preliminary talks to acquire a large stake in Scitex Corp., an
Israeli graphic-arts and digital-imaging company whose equipment is used by
magazines and newspapers world-wide, said people familiar with the situation
(see article).
Pegasystems Inc. said it was delaying an SEC filing because of another round
of accounting problems at the customer-service software maker (see article).
Internet and Online
Investor Bill Gross has formed a company called eWallet that will distribute
free software to let people buy goods online while entering their billing and
address information just once. Significantly, the software takes the place of the
task bar on personal computers running Microsoft's Windows 95 operating
system (see article).
An Internet-service provider has filed suit against New York State Attorney
General Dennis Vacco seeking clarification of what the responsibilities of
service providers are when obscene or illegal materials are sent over the
Internet (see article).
A Virginia county's effort to block Internet pornography from computers in
its public libraries is unconstitutional, a federal judge ruled. U.S. District
Judge Leonie Brinkema said Loudoun County libraries are not required to
offer Internet service but they must not violate the right to free expression if
they offer access (see article).
Excite Inc. agreed to sell a 50% stake in its Excite UK unit to British
Telecommunications PLC for $10 million (see article).
Telecommunications
BellSouth Corp. declared a 2-for-1 stock split, boosted its dividend and
announced plans to buy back as much as $3 billion of its common shares (see
article).
European Union regulators will launch a full-scale four-month probe into the
proposed $11 billion joint venture between British Telecom and AT&T Corp.,
the EU's top antitrust official said (see article).
MCI WorldCom Inc. has filed plans with the Federal Communications
Commission to clarify which customers must pay expensive "casual calling"
rates for long-distance calls (see article).
Qwest Communications International Inc. said its vice chairman, H. Brian
Thompson, will leave the phone company at the end of the year (see article).
First Pacific Co. won control of Philippine Long Distance Telephone Co.,
acquiring a dominant 27.4% stake in the leading Philippine telephone carrier
and securing a major role on its board (see article).
Year 2000 Problem
The Pentagon, State Department and other big U.S. government agencies are
lagging behind in efforts to remedy Year 2000 computer problems, a
congressman said (see article).
Economic forecasters expect that preparing computers for the year 2000 will
boost the nation's gross domestic product slightly in 1999 and shave it a bit in
2000, according to a survey by the Federal Reserve Bank of Philadelphia (see
article).
Earnings
Intuit Inc. posted a wider loss in its fiscal first quarter, citing a normal
seasonal sales slump in its tax software and one-time charges resulting from an
acquisition (see article).
Novell Inc., aided by new versions of key networking-software products,
continued its resurgence by handily topping analysts' expectations for fiscal
fourth-quarter earnings (see article). |
