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It's going to happen. Just look at who's working on
itcompanies like AT&T, Microsoft, MCI, IBM, the broadcast
and cable networks, the Baby Bells, and many others, plus a fair
number of smart people in their garages or home offices.
But another type of breakthrough could be the emergence of our
industry's Holy Grail: the "killer application." It's happened
before without any change in technology. Sony came out with the
Betamax in 1975. Everyone thought then that the "killer app" for
VCRs would be time shifting. And VCR usage rose steadilybut
not spectacularlytoward 10 percent by 1982. That growth curve
closely parallels the experience to date of online services. But
something changed in 1982. Suddenly, mom-and-pop video stores
sprang up in every town. The "killer app" turned out to be movie
rentals. Within the next 2 years, home penetration of VCRs
approached 50 percent. So we could be nearing a flash point for the
online medium. All we need to do is make it easier to use and
figure out the "killer app." In my opinion, the ''killer app" is
Sure, I know, online services have had communications from Day
One. And these services are still a niche product. But consider
this: most online services to date have been built around
information, not around communications. That's turned out to be
backwards. It's backwards because all people communicate; but only
a small percentage of the population really cares about any one
topic of informationO.J. Simpson excluded!
Consider this. CompuServe has 2,000 categories of information.
But how many of those does the average member use? I know from my
experience that it's seldom more than four or five applications. At
Prodigy, there's a terrific feature called Strategic Investor, yet
only a small fraction of members subscribe.
Given these facts, anyone starting an online service today would
probably be advised to build outward from a rock-solid
communications core, optimizing everything for subscriber
exchanges. And you wouldn't just have bulletin boards, chat, and
e-mail. You'd have instant messages, 3-D chat, and easily attached
files for sound photos, video, and graphics. You'd also let
subscribers create their own home pages on the Web, where they
could talk about themselveseven show their cars. Prodigy will
do this shortly, and the other services will quickly follow.
After you'd established a firm core of communications, you'd
want to start adding information and transactions to it. But the
information and transactions would be tightly integrated with the
communications. That's important, because getting around online
services today is like being the guy who explains where he's
calling from by saying he's in a phone booth at the corner of WALK
and DON'T WALK.
The leaders in online services will be those who can best
integrate communications, information, and transactions. They will
build on a core of communications to create communities of
Let me give you an example. A company like Ford spends a fair
amount of money each year putting information online. So as a user,
I can navigate to Ford's advertising section and read about its new
cars. Even see photos of them. OK, fine. But how often am I going
to come back to see the same information? Now, if I'm interested in
cars, maybe I'll log on to a car enthusiasts' bulletin board. But
after a while, I'll get bored talking to the same old regulars. On
another day, I might order a subscription to Car and Driver
magazine right from my computer. The problem is, all these are
discrete activities that I carry out as an individual. They don't
create much excitement. They don't involve me very much.
But what if an online service creates communities of interest
built around world-class communication functionality? From a single
screen, or with hyperlinks, I can see Ford's cars, chat with other
car enthusiasts about them, debate with Car and Driver's
editors, download model specs, check the archives of the Detroit
Free Press for an article about Carroll Shelby, ask Shelby a
question, place a classified ad to sell my '67 Mustang, look up the
price of Ford stocks, buy 100 shares, and send an instant message
to a friend's beeper urging him to get online and join a discussion
You can do all or most of this today on the online services. But
no one has done a very good job of integrating it to create true
communities of interest. That's what I think will make online a
ubiquitous medium. And if it is, can advertisers be far behind?
Advertising on the Web is a tricky business, however. Very few
advertisers really understand it. The environment differs from
other media and will become more different over the next few years.
It's an environment where the revenue model will become
Today, for most users, the Internet is essentially untimed. And,
as a practical matter, so are the commercial online services, since
the majority of their users stay within the flat-rate time limits
that go with their