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Crosby Sprint DSL PR 2

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Crosby Sprint DSL PR 2

  1. 1. SmartMoney Stocks by Alec Appelbaum Dial 'P' for Portal BEFORE ITS stock lost $12 billion in market value, you might have expected Yahoo! (YHOO 1) to contend for the title of chief broadband cheerleader, as it guides the greatest number of consumers onto the high-speed, multimedia, always-on Internet experience available on new communications networks. You would have been right to guess that portals are the best way of guiding consumers into the new era. But you would have been wrong about who's likely to own those friendly directories with the brands on top. Broadband, don't forget, refers to the amount of information that can travel from a Web site to a computer. It's the bailiwick of phone companies likeSprint (FON2) and Bell Atlantic (BEL3), which are deploying digital subscriber line (DSL) technology to fatten the gullets of traditional phone wires, and of AT&T (T4), which is becoming the nation's biggest cable company in order to own the widest wires possible. These companies' growth rests in the Internet -- Bell Atlantic announced quarterly earnings growth of 10.3% this morning, andBellSouth (BLS5) reported a jump of 24%, thanks in large part to advanced wires. Eventually, these wires will carry not only phone calls and data but fee-based services such as pay-per-view movies and online retail. To get consumers in the mood, these companies are wrapping their high-speed offerings in portals of their own. "It's likely that broadband Internet-service providers will themselves be portals, a situation that didn't work out in the narrow-band world," says Joe Laszlo, who studies broadband and access strategies for Jupiter Communications. One reason, Laszlo explains, stems from the technical nature of video, which requires hardware at the office where phone and cable companies originate signals. If the phone and cable companies are housing the equipment, they maximize their returns by owning the lines and screens that deliver the service. "This is our take on a strategy that focuses heavily on services and options," says Greg Crosby, VP of Sprint's data services. He's talking about a portal that Sprint andEarthLink (ELNK 6) set up for Sprint's DSL service, which features a window that shows off broadband-optimized content from MSNBC and other providers. When users click their mouse in this window, up pops a "jump page," co-branded by Sprint and the content company, at higher speeds than would appear on a traditional connection. "The material may be the same but initially it's going to be turbocharged only on our site," says Crosby. And so Sprint, which is test-marketing DSL service in Virginia and plans to run trials in Florida and Nevada later this year, positions itself as the trusted sherpa of this fast, new world. Sprint and the other phone companies setting up their own portals -- including AT&T, which holds a controlling interest in cable-modem service providerExcite At Home (ATHM7) -- are trying to make their companies an integral part of consumers' curiosity about a download-friendly Net. "People are champing at the bit to try these services, and [their experience] would be routed off through the Internet if we didn't have a portal," says Crosby. Bell Atlantic, which is introducing its Infospeed DSL service in New York and suburban Philadelphia this summer, designed a special portal for it with Snap, the joint venture ofC|Net (CNET8) and the NBC unit of General Electric (GE9). According to Bill Heilig, business and strategy manager for BellAtlantic.net, the giant phone company trusted Snap -- a portal with limited success in the ordinary Internet -- to select and display the applications users care about most. Snap's start page includes the familiar business news and media brands; one click takes users to a virtual tour of Jerusalem and the chance to upgrade some software. Where ordinary portals started out as search mechanisms, phone-company portals are shaping up as commerce clearinghouses. Jupiter, in a survey this spring, found that consumers showed more interest in using the Net to download software than in using it to look at videos. Jupiter's Laszlo says consumers' appetite for downloads and distaste for a la carte pricing make Internet service providers the logical owners of portal services. "Because they can aggregate demand as well as content, they can get better prices for [applications and services] than individuals can," he explains. Of course, portals can become revenue sources for the phone companies, too. Crosby says Sprint hopes eventually to make money off pay-per-view services accessible from its portal, while Heilig hints at Bell Atlantic's plans to "take advantage of the always-on environment," perhaps by incorporating message and call-waiting features. And everybody plans to hawk online billing, which saves the company costs of paper processing once systems are up, through the portals. "It's just as important in customer loyalty and retention to provide [online billing]," argues Stan Yeatts, VP of Internet portal services for BellSouth. BellSouth, true to its reputation as a top-flight hometown brand, has developed BellSouth Buzz, a set of 62 locally modified portals, as the start page for its Internet service. Right now, it serves the same material on a simple modem as on a DSL service, and it's hedging its bets about changing that. "The key to the Internet is to let people decide for themselves," argues Yeatts, who emphasizes establishing Web sites for advertising, driving traffic to other sites and encouraging advertisers to create e-commerce activities. Of course, all this electronic experimentation creates healthy business for certain young Internet outfits. EarthLink channels the search services ofAbout.com (BOUT10) for Sprint; BellSouth Buzz stuffs its portal with videoconferencing software courtesy of Premiere Tech Published July 21, 1999 TELEPORTALS Applet
  2. 2. search services ofAbout.com (BOUT10) for Sprint; BellSouth Buzz stuffs its portal with videoconferencing software courtesy of Premiere Tech Premiere Technologies(PTEK 11); and both Bell Atlantic and Sprint showcase the RealNetworks (RNWK12) plug-in that allows consumers to view moving pictures on their browsers. And don't wail for Yahoo, either. One of the first content providers Sprint licensed for its portal was Broadcast.com13, now a unit of the grand portal poo-bah. As long as the phone companies can keep their lines busy, they'll provide plenty of room for other companies to dock. 1http://www.smartmoney.com/quote/YHOO/ 2http://www.smartmoney.com/quote/FON/ 3http://www.smartmoney.com/quote/BEL/ 4http://www.smartmoney.com/quote/T/ 5http://www.smartmoney.com/quote/BLS/ 6http://www.smartmoney.com/quote/ELNK/ 7http://www.smartmoney.com/quote/ATHM/ 8http://www.smartmoney.com/quote/CNET/ 9http://www.smartmoney.com/quote/GE/ 10http://www.smartmoney.com/quote/BOUT/ 11http://www.smartmoney.com/quote/PTEK/ 12http://www.smartmoney.com/quote/RNWK/ 13http://www.broadcast.com URL for this article: http://www.smartmoney.com/investing/stocks/dial-p-for-portal-7177/ smSmallBiz ™ SMARTMONEY ® Layout and look and feel of SmartMoney.com and smSmallBiz.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved. By accessing and using this page, you agree to ourPrivacy Policy and Terms of Use. All quotes delayed by 15 minutes. Delayed quotes provided by Interactive Data Real-Time Services, Inc.. Historical prices and fundamental data provided by Morningstar, Inc. Mutual fund data provided by Lipper. Mutual Fund NAVs are as of previous day's close. Earnings estimates provided by Zacks Investment Research. Insider trading data provided by Thomson Reuters. Upgrades and downgrades provided by Briefing.com. You Are Viewing: SmartMoney.com — Investing, Saving and Personal Finance. SmartMoney Mobile | Customer Service | Magazine Customer Service | Subscribe to SmartMoney Magazine | Your Profile | Contact Us About Our Ads | Corrections | Custom Publishing | License Our Content | Media Kit | Press Room | Events | Site Map | Labs |

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