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Technology Stocks : Broadcast.com (Acquired by Yahoo) -- Ignore unavailable to you. Want to Upgrade?

To: sam who wrote (549)	2/10/1999 9:16:00 PM
From: neverenough	Read Replies (2) \| Respond to of 1260

This is Kevin Maney's latest column, originally appearing Feb. 10, 1999. Lights, camera, action Broadcast.com DALLAS - Imagine my disappointment when I walked into Broadcast.com last week, on the very day of its Web broadcast of the blockbuster Victoria's Secret fashion show, only to find out there was absolutely nothing to see. Not a nightie in sighty. Not a single bellybutton anywhere. If I wanted to see the inner workings of the show, I could peer through a plate glass window into a room packed with computers and wire spaghetti and watch tiny indicator lights blink on and off. Well. Turned out there was nothing left to do but talk to them about their business, which some people definitely think is exciting enough. Broadcast.com is expected to be one of the Internet darlings of 1999. It's kind of a work in progress - a company built for the next age of the Internet, when broadband Internet connections rule the Earth, and video can look like video instead of stop-action photography taken with a Fisher-Price camera. It's a little like Noah building his ark on a promise of heavy rains in the forecast. On the surface, Broadcast.com is a Web site. Some think of it as a Web portal for audio and video, much as Yahoo is a portal for static Web pages. The site has collected an impressive array of content: 385 radio stations, programming from 40 TV stations, game broadcasts of 420 college and pro sports teams, live music, news, corporate press conferences and so on. Through this Web site, the company broadcasts special events such as the Victoria's Secret show - which drew 1.5 million viewers, a record for a Web event - and President Clinton's video deposition. Behind the Web site, the guts of Broadcast.com may be as important to its future. It has built an unmatched capability to put video on the Internet - especially video that's going to get pounced on by huge numbers of users. "It's something that's expensive and tricky to duplicate," says Howard Morgan of investment company Arca Group. Broadcast.com CEO Todd Wagner calls this capability his company's barrier to entry, keeping competitors out. It's the reason Victoria's Secret went to Broadcast.com. The company has other important pieces. It has a sales force 85 strong. These are people who know how to specifically talk about audio and video on the Net. And don't overlook its corporate business. Broadcast.com gets half its revenue from broadcasting things like a company's quarterly earnings videoconferenced to all that company's employees. The pieces come together in a scruffy warehouse well away from Dallas' glassy downtown towers. The 250 employees sit at cubicles spread across one wide-open floor, which makes for a constant burble of voices. There are few amenities. The only conference room is an open space with a couple of long tables that look like they came from a church picnic. When you take in the whole company, Broadcast.com looks like a mishmash. In fact, Wagner and President Mark Cuban - Broadcast.com's co-founders - search for ways to describe it. Cuban says Broadcast.com is in the "digital bit blasting business." He also compares it to building a multipurpose stadium. "We sell ads, we sell distribution -- we put anything in the middle and put butts in the seats," Cuban says. "Over time," Wagner says, "we'll be a digital distribution network." Whatever. Really, their problem is that the Internet hasn't caught up to Broadcast.com. Audio and video are only beginning to be an important part of the Web experience, and for most people, video on the Web is pretty bad. It's jerky and grainy and plays in a space the size of a business card. There's no business model to copy; no accepted set of rules. That might explain the way investors have treated Broadcast.com. A graph of its stock price looks like a heart monitor readout. From Jan. 6 to Jan. 11, it went from $81 to $285. From Jan. 12 to Jan. 15, it dropped back to $140. Then it went up. Then down. Nothing of import happened around those times. Investors seem more than a little confused. But the real Broadcast.com might emerge as the Internet changes. Compression technology is continually improving Internet audio and video. At the same time, capacity of the Internet and of pipes going to homes and businesses is expanding, making it easier to carry better quality audio and video. Then the questions get interesting. If video becomes a huge part of the Web, could Broadcast.com's portal displace Yahoo? "Don't discount the first mover advantage," Morgan says, noting Broadcast.com's position as the best-known video Web site. And then, if homes start getting broadband Internet connections and plugging them into set-top TV boxes, might people watch Broadcast.com instead of TV? Could Broadcast.com become a kind of interactive, global cable firm? Cuban and Wagner try not to answer such questions. My guess is that even they don't know. But they like that such questions are coming. "It's going to be a disruptive time," Cuban says with a grin that seems to be fairly permanent. "Disruption creates opportunity for us." -------------------------------------------------------------------------------- E-mail Kevin Maney at kmaney@usatoday.com and include name, address and day phone. -------------------------------------------------------------------------------- usatoday.com