EXAMINE THE NET WAY OF LIFE
by Paul C. Pinderski
It began by bundling Internet Explorer with its operating system. It slowly snowballed into a lengthy, multi-forum antitrust web of legal intrigue. What remains is the end game, the final decision on remedies for Microsoft's past ills.
A federal judge in Baltimore onJanuary 11, 2002 rejected Microsoft's proposed settlement that would have ended more than 100 private class-action lawsuits. U.S. District Judge J. Fredrick Motz ruled that the proposed deal in the antitrust cases would itself be anti-competitive. Under terms of the proposal, Microsoft would have given $1 billion in money, software, services and training to about 12,500 underprivileged public schools. The company also would have given about one million Windows licenses for refurbished PCs donated to the schools. The judge stated that settlement was "more acutely problematic when viewed in the context of the proposed settlement's potential adverse impact on competition." Opponents of the settlement proposal, including Apple Computer, had argued that the proposal was anti-competitive, as it would help Microsoft make software gains in the education market. Microsoft expressed dissatisfaction with the ruling--and optimism that it would prevail in the court proceedings.
In the civil suit, Microsoft was clever to bundle a settlement proposal that would have given millions of dollars of free computers and software to schools. An act of penance to benefit the poor American educational system. But used or refurbished computers and a million free licenses, of probably old OS software. Get the schools into Windows, then have them pay for an upgrade? Could that plan been that crass? It could have worked because the plaintiff class lawyers realized that monetary damages, if any,to actual end users of Windows products would be minor on a per consumer basis. Class action attorneys need to have big dollar signs to justify big cases and big settlements in order to generate big fees. A billion dollar settlement is a nice round number. Eventhough its not in hard greenbacks.
But someone forgot to educate the judge on how to rubber stamp the deal. The education market is one place where Microsoft Windows does not dominate. In fact, it is Apple Computer's hot area of growth since the introduction of its iBook line of notebook computers. For example, the State of Maine recently announced the purchase of 36,000 iBooks. Now, that's a coup. But what if the choice was to buy 36,000 laptops from Apple or take 36,000 laptops running Microsoft products from Redmond? It goes back to remedial math. Gee, one big free foothold into a market by monopolist minus large sales to a competitor equals zero.
The little boys cannot say the dog ate the homework in this playground. The stakes are now getting too high. Microsoft appears willing to continue to be educated in antitrust law by the back of a headmaster's paddle. In the end, the resolution is what real money from its cash reserves Microsoft is willing to part to be granted a passing grade on this issue.
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by Paul C. Pinderski
Having grown up with the ink stained newsprint of afternoon red streak editions, I am keen to the print methodology to advertising. The purpose of advertising is simple. It is a form of communication. An ad communicates to the reader something about a product, service or company. It may communicate an item is on sale, or that a big corporation has a heart by giving money to charity. The medium is the white paper background where the ad's image is placed. And where the reader will come across it when reading the publication.
Print media has had a difficult time moving from its old roots to the internet, especially in the advertising issues associated with the net. The reason is that the frontier of the web is supposed to be vastly different than the old world. But as more time passes, the more clearer picture is that the two media are more similar than different. What is a newspaper or magazine? A publication of articles, pictures and graphics on various subject matters. What is a web page? A publication of articles, pictures and graphics on various subject matters. The real world difference is that to publish a glossy, national newspaper or magazine, it costs millions of dollars in printing, circulation and distribution. On the web, you can post and distribute a glossy, international page for your monthly domain server's operating fees.
In the print world, having a tangible issue in a reader's hand is the standard. The number of issues sold, circulation, is a major factor in the measure of advertising rates. However, the tangible issue does not equate well in cyberspace. Print owners may have got caught up in the hype or technospeak that hits equate eyeballs which equate to readership. The net ad industry focused on hits, a readily countable feature imbedded in web server software, to measure and define ad rates.
But in the print world, circulation is great, but verification of circulation is golden. Verification of subscribers is a simple audit process. In real money terms. On the net, few sites have traditional subscription viewership. In fact, subscription viewership is frowned upon on this open frontier. So the bottom of the page arcade hit counter was the de facto verification tool. But it really did not satisfy advertisers.
They wanted to know if people were actually seeing their banner ads. In a limited form, with sale ads and cut-out coupons, an advertiser can get tangible feed back on how effective his advertising played in the paper. The closest gauge to this coupon clipping would be the click-through ad. A page viewer would click on an ad to link to the advertiser's site, and his page counter, to determine the effectiveness of his banner ad. But this reasoning is flawed. In the print world, not everyone clips coupons or runs out to buy products mentioned in the ads. It is the potential views of the advertisement in the publication is what the advertiser is seeking from the placement. For example, an advertiser would pay more to place the same ad in a magazine with 600,000 circulation than a 200,000 circulation magazine. And the advertiser would be expected to pay more for the ad in the 600K mag than the 200K mag. Being placed in a popular publication is also part of the allure an advertiser wants from its ad. Association with the host publication. If the readership is defined by good demographics, or a good focus, advertisers would like to share in that reader loyalty. And that association is not necessarily measured by gross readership or number of click throughs on a banner ad. An advertisement should not be intrusive, but flow within the publication. The pop-up ads, pop under ads, the consoles and flashing banner loops that hinder site performance are more annoying than productive. Pop-up ads are probably erased from a viewer's mind by deleting faster than a stationary banner ad.
For internet advertising, the compromise lies in understanding the value of these ideas. An internet advertiser should analyze ad placement not by the cost per thousand hits, but first whether it wants to associate with the content, focus or purpose of the web site. Web publishers should not traffic merely in hits per dollars, but in content that generates visitors (in readily countable accesses in which a document is sent from the host server). For in the end, both advertiser and web publisher should be seeking to meet the needs of the publication's visitors or end users.
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Apple Pie in Face
by Paul C. Pinderski
In the last issue of cyberbarf, I gazed into the crystal ball of the Apple rumormill. MacWorld San Fran was supposed to be the Big Show. Fans were at a rabid frenzy, especially when Apple used its own web site to flame the rumor flames. Well, ever predictor of the Apple future got a little toasted after King Steve made all of his proclaimations.
For those who are too lazy to read the Archives, I wrote:
But if you want to go nuclear, the earth shattering story would be that Apple's latest operating software system, Mac OS X, is ready to run on Intel machines. Direct competition on Microsoft's sole domain. That would really grab the headlines more than a PowerPC chip running at 1.2 gig, the G5 next generation, or a new desk top line of boxes. A flat-screen iMac, the merger of a flat panel display and the Cube, would be the perfect desk space, cool looking office machine. Since the iPod, the MP3 player/hard drive, rumors have the company going more consumer oriented electronics. Could there be an iPad? A PDA that has the same form function keys of the iPod? That is a distinct possibility. But more probably, Apple's foray into the iMovie/iTune biz would be complete with a stand-alone DVD-R player that interfaces with its current software.
But if I had to predict one major story, it would be the porting of the Mac OS to Windows machines.
1. OS X on Intel boxes. ZERO
2. PowerPC chip at 1.2 gig. ZERO
3. G5 chip? ZERO
4. Flat screen iMac. CORRECT, even though extra credit would have been given if anyone predicted that it would look like a lamp.
5. iPad/PDA. ZERO
6. DVD-R player ZERO
One for six. Batting average .167. Probably get $500K in majors with that average, but would have the luck of being signed with one of the teams set for contraction.
But even after the ho-hum response, the rumor mills started up again. Mostly in Europe, with sightings of G5 listings on retail websites and hints that 1.4 gig PowerPC boxes ready to ship in the next quarter. The next Expo is six months away. Double or nothing on the predictions next time around.
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