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To: dwight martin who wrote (6241)	5/31/1999 9:56:00 PM
From: Kurthend	Read Replies (2) \| Respond to of 10081

Dwight, Do you or anybody else have any thoughts concerning the below article about Nextel and MSFT? Any possible ramifications either pro or con? Kurt redherring.com Microsoft/Nextel deal boosts wireless Net apps By R. Scott Raynovich Redherring.com May 29, 1999 Microsoft's (Nasdaq: MSFT) $600 million investment in Nextel Communications (Nasdaq: NXTL), formally completed today, is expected to give a boost to the market for wireless applications based on the Wireless Applications Protocol (WAP). The partnership is expected to yield one of the first systems for delivering a stripped-down version of Internet data to mobile phones using a wireless packet data network. This could prove the potential for the use of WAP, which allows mobile phones and other devices to more efficiently access Internet-based networks. "It highlights the value of wireless assets for delivering data, voice, and Internet services," says Harvey Liu, senior analyst at CIBC World Markets. Nextel has a sophisticated customer base that is more likely to use wireless connectivity to access Web data, says Mr. Liu."This is a natural extension that provides Internet content to people on a 24 by 7 basis." INFUSION FOR NEXTEL ONLINE Nextel will use Microsoft's investment to fund its Nextel Online system, which will be deployed to 50 million points of presence (POPs) by year-end, according to Nextel officials. It will be tested in several major cities, including New York and Atlanta, as early as the end of the summer. Because Nextel's networks are based on a packet data network, rather than the voice circuit networks employed by many of the traditional telecom carriers, it's in a position to focus on data services and the Internet, says Mr. Liu. "They're using a packetized data network which makes Internet services more efficient," he says. ARRIVAL OF THE WAP APPS? Nextel officials say that the online service will deliver a series of WAP-based interfaces that strip out Web graphics, enabling the Internet data to be more easily delivered over wireless links. Observers say this points to an opportunity for companies developing Internet apps. "This will help companies write more apps to provide value-added services because they see WAP as an emerging standard," says David Freedman, senior managing director at Bear Stearns (NYSE: BSC). Indeed, interest in the WAP protocol has flourished in just the past several months. The WAP Forum, an organization that oversees the standards for developing WAP-based applications, was officially founded by LM Ericsson (Nasdaq: ERICY), Motorola (NYSE: MOT)), Unwired Planet) in January of this year. Since then, another 33 companies have joined, including both Nextel and Microsoft. Software companies that belong to the organization include Geoworks (Nasdaq: GWRX), Spyglass (Nasdaq: SPYG), Mapquest (Nasdaq: MQST), and Starfish Software. The deployment of WAP apps may make the mobile phone a more viable competitor to other wireless devices like personal digital assistants for accessing Web data. During the past five years, cellular penetration in North America grew from 15.6 percent to 42 percent of households, according to Forrester Research. Forrester expects that by 2003, nearly 57 of all North American households will be cellular subscribers. Some companies are already focusing on WAP apps. For example, Phone.com, which is expected to go public next month, has been a contributor to wireless applications being used by equipment providers like Nokia and Alcatel (NYSE: ALA). In exchange for the $600 million investment, Microsoft received approximately 16.67 million shares of Nextel stock, accounting for a stake of roughly 4 percent of the company.