America Online’s surprise announcement Monday that it plans to buy media giant Time Warner for $166 billion in stock raised more than a few eyebrows in the Net community.
Old-time Net heads and Web business people quickly focused on the big issues raised by the big merger. Will independent voices still have room to thrive on an Internet increasingly dominated by huge corporations? Will this merger dumb down the Net? How open will this new-old media powerhouse make its content and its network? Will AOL-Time Warner — or anyone — figure out how to make broadband work?
We surveyed a number of geeks, new-media savants and technology critics to get their take on the century’s biggest mega-merger (at least so far). Here’s what they had to say:
Martin Nisenholtz, CEO of Times Company Digital, the Internet unit of the New York Times Co.
It’s great for those of us who go back to the earliest days of AOL, back when they were Quantum Link with a service that ran over 300-baud modems for Commodore computers. Who would have thought that they’d be taking over Time Warner?
AOL was always a great company, fast and nimble, even before it was fashionable to be fast and nimble. It followed the PC into the marketplace, invented consumer e-mail and popularized chat and buddy lists. It always followed the user — it never tried to overlay standards on users that they weren’t ready for.
You’d hope to see some new forms of programming. Not entertainment programming per se, but interesting tie-ins between broadcast and PC, where AOL-TV tied into Time Warner content. And of course, there’s that dirty old word, “synergy,” between AOL’s news channel and CNN– but that’s not all that earth-shattering. I don’t see the merger as less choice for consumers. After all, this isn’t a consolidation of traditional media companies — this is a click-and-brick story.
What I really hope is that the merger will motivate a broadband revolution. That’s speaking in hyperbole, but I’d love to see someone deliver a really great user experience in broadband. No one’s done it so far, and if AOL can take its experience to Time Warner’s Road Runner, that would be great.
Jamie Love, director of the Consumer Project on Technology
The current system — you get a pipe from your ISP and you do what you want with content — is that going to be history? The architecture that’s being proposed by the big cable operators would allow them to discriminate in terms of performance … They could design highly discriminatory platforms, so that [your content] will play differently if you have a business relationship with the owner of the last mile. Whether or not the operators go the common courier route or the common cable route — “We own the pipe and decide what goes on it” — is a big deal.
AOL has been a big advocate of open access — we need to have companies like AOL beating up on the regulators at state and federal level to change things. This merger is partly evidence that AOL thinks it’s losing the battle to protect the competitors.
AOL was the biggest proponent of making it a level playing field. They say they still are, but it depends how much you trust Steve Case. We don’t; historically he does what benefits him at the time.
Howard Rheingold, Net pioneer and author of “Virtual Community”
The more the Net becomes like TV, the stupider we are going to become; the more TV becomes like the Net, the more intelligent we’ll become. It’s the mass media-fication/dumbing down of the Net; the bigger these enterprises get and the broader their reach, the less intelligent their content. The Net used to be a grand alternative to television, and it still is. But with the expectations of the mass market, the big center of the curve, clearly AOL’s ambition is to be more and more like television.
That doesn’t mean that the intelligent stuff is going to go away, but a lot of attention and dollars will be drawn to lowest-common-denominator stuff that AOL is known for. I think the millions of voices are out there, but how many people are going to hear them?
Kara Swisher, author of “aol.com” and staff writer for the Wall Street Journal
You’ve got an old-line media company that used to be on top of the world being taken over. No matter how much they say this was a merger, AOL is buying the company. Even being “equal” must be a hard thing to take for a company that thought it was the world. Who ever thought this little company from Virginia would be sitting at the table in such a strong position?
The internal corporate politics should be interesting to watch; AOL is very good at corporate intrigue … But the companies are a lot more alike than you think. Bob Pittman [AOL president and chief operating officer] is a media person; he will be very active. A lot of the people at AOL are New York media people; they aren’t from Silicon Valley — if this were Yahoo it’d be an interesting mix.
I think Steve Case has always been the visionary personality of AOL, and he will be leading the strategic division of the company. He’s always wanted to run an old media company; he has always thought of AOL as an old-media company — that’s why he brought in Ted Leonsis [president and CEO of AOL Studios]; they brought in media people early and often.
Tim Berners-Lee, inventor of the Web, director of the World Wide Web Consortium and author of “Weaving the Web”
During the World Wide Web Consortium’s five years of existence, there have been many ups and downs in the related industries, along with mergers and disappearances. The need for common standards — and the threat of fragmentation — are still as strong as ever. We face fragmentation threats when we lose sight of the Web as a universal space — one that is device-independent, culturally independent, ability-independent and, of course, vendor-independent.
Jamie Zawinski, an early Netscape employee and leader of the Mozilla project, who quit shortly after the finalization of AOL’s buyout of Netscape
It was surprising, especially that it seems to be AOL buying Time Warner, rather than the other way around … I don’t think there’s anything terribly surprising about this in the abstract, though; it was only a matter of time before the giant media dinosaurs started sinking serious money into the Net.
This should worry people in the same way and for the same reasons that the sheer size of the media corporations should worry them: This kind of vertical integration makes it harder for the public to hear anything but the corporate party line, since a small number of multinational corporations control the production and distribution of news and entertainment.
This is why the movie studios are prohibited from owning movie theatres. Same exact situation. It’s not healthy for society.
That AOL is involved in this deal brings the “what if” scenario I talked about at the end of “Netscape and AOL” a little closer to reality, but this is only one way we can end up in a bad place like that. For example, a merger between Microsoft and Viacom would be troubling in the same way.
John Battelle, president of the Industry Standard
It’s a coup. Steve Case is now chairman of the largest media company in the world. But the extraordinary thing is [Gerald] Levin. It may turn out good or bad, but the tradition of arrogance that is ascribed to media players of the old guard does not fit with his action. He quite comfortably could have said, “We’re not going to get involved in this new medium,” but he’s decided not to do that. That’s pretty cool, in a way, that he’s willing to forego that. It’s not in the standard behavior pattern of old-line media. You can’t imagine [Disney Chairman and CEO Michael] Eisner doing that, for example.
It was interesting to see Steve Case in a tie, and Gerry Levin without. I thought that was kind of funny: the corporate guy trying to look casual, and the Internet guy dressed up. I think they both have come to Jesus.
Mark Stevens, executive vice president of business development at Excite@Home
I think it’s a good deal for both of them. It validates strategies that we’ve been pursuing. @Home’s service is all about a broadband, rich-media environment, and our churn rate is below the U.S. death rate. I think AOL is going to see the same loyalty with their broadband customers.
One question is what AOL will do with its control of the pipe. We believe very strongly in an open Internet, letting consumers access the full richness. AOL will make its own decision about that.
David Butler, spokesman for Consumers Union (publisher of Consumer Reports)
Consumers don’t want to be beholden to a giant media and Internet dictatorship — even if it promises to be a benevolent one. It’s a sad result of the Clinton administration’s weak competition policy — consolidation leaves people with fewer choices, limited competition and higher prices. Consumer groups are asking the Federal Communications Commission to initiate a rule-making proceeding to require open access to the Net.
If we want long-term diversity of views and diversity of choice, if we want good prices, we need public responsibility rather than just wheeling and dealing.
Darby Williams has one New Year’s resolution: to get funding as soon as possible. His company, CookExpress, which offered Web users “the return of the home-cooked meal,” closed up shop right before Christmas.
“We have very little cash in the bank,” said Williams, CookExpress’s CEO. The San Francisco company burned through $3.5 million of private financing in the last two years, establishing a nationwide dinner delivery service, serving the fixings for pre-fab gourmet meals like lamb chops with Madeira sauce.
With the help of famous chefs like Bradley Ogden (of One Market in San Francisco), CookExpress adapted over 100 time-consuming recipes to create easy-to-use meal kits. Customers could place an order on the CookExpress Web site by 2 p.m., and before dinner time you could expect a package of pre-prepped ingredients. More than a step up from takeout, the kits offered meals such as pan-seared scallops, wild mushroom lasagna and butternut squash stew. (The only drawback was environmental: Every order involved lots of plastic bags and cardboard boxes.)
To prepare and deliver fresh ingredients is a pricey proposition. CookExpress needs at least 10,000 customers to break even; by December it had 5,000 in the Bay Area plus 2,000 people who live outside its same-day service area, but signed up for overnight delivery.
With luck, Williams will be able to get the $5 million to $10 million he needs before the pots and pans in the company’s kitchen gather any dust. He has been meeting with investors all this week, and hopes to reopen within the month. Hungry customers are waiting: Williams says he has received many e-mails to the tune of, “Hey, are you guys looking for funding? Can I help?”
After more than two years back at the helm of Apple Computer, Steve Jobs came clean and admitted that yes, he is, in fact, the company’s CEO. Not interim CEO, or iCEO — though he did say he might keep the “i” in his title to remind him of the importance of the Internet. Just CEO.
The overflowing crowd at San Francisco’s Macworld Expo gave Jobs, sporting his trademark turtleneck, a standing ovation.
After all, it was an official acknowledgement by the man himself that he’s committed to more than quick turnaround glory. The headhunters looking to fill that tricky slot can throw in the towel and leave the company in the hands of its founder. Though the news delighted the Mac faithful gathered to hear Jobs at a keynote early Wednesday morning, Apple fans were hardly surprised.
Who did Jobs think he was kidding, anyway? The neon glow of iMacs everywhere and the company’s continuing profitability in the last seven quarters — after six consecutive quarters in the red and a bout of management troubles — are proof positive that the man is back where he belongs. (He is not, however, abandoning Pixar, the animation studio where he also retains the CEO title.)
And the fourth quarter results, due in two weeks, should be stellar, hinted Jobs. Some 1.35 million Macs sold; that’s one every six seconds, he grinned. Apple also has more cash in the bank thanks to a June 1999 investment in Akamai, a company developing technology to speed Internet performance; Apple’s $12.5 million investment has ballooned into $1 billion.
The cash-flush Apple is investing $200 million in EarthLink, the nation’s second largest Internet service provider — as part of a deeper embrace of the Internet. As Apple’s official ISP, EarthLink will become the exclusive access provider in the Internet set-up software included with all Macs sold in the United States. Apple will take a cut of each new EarthLink subscription it generates — and will get a seat on EarthLink’s board of directors.
But Apple’s Net thrust goes beyond the simple idea of getting more people to choose Macs as their gateway to the Web. The company is clearly looking to build something of an online community with its new iTools Web-based applications like e-mail and home page building kits, with free space on Apple servers. Now Mac fanatics can sign up for e-mail with a Mac.com address and Apple will even host their Web pages.
These iTools apps work much more like desktop applications and not clunky browser-based ones, thanks to integration with Mac OS 9. For instance, iDisk, which offers Web-based file storage, looks just like another drive on the desktop, with public and private folders, picture thumbnails and all. The click-on file access, certainly makes file sharing user-friendly.
Apple has also added other Web services to its site: iReview, a directory of Web site reviews that invites users to weigh in on their favorite sites, and iCards, a Web greeting card service, and KidSafe — a Web content-blocking service for underage surfers.
Building community online has, after all, become the rallying call of many an Internet company — but do we really need more Yahoos or Blue Mountain Arts? The new services certainly aren’t cutting edge, but they do have a useful appeal that will likely draw users to the Apple site on a regular basis.
It was refreshing to find Apple emphasizing software development, after the focus of past years on translucent polycarbonate, cool as it is. Despite rumors of a new PowerBook and an iMac with a 17-inch screen, Jobs made no new hardware announcements. However, the Mac faithful did get a glimpse of the new operating system, Mac OS X — and greeted it with enthusiasm, snapping photos and clapping.
Code-named “Aqua,” the face of the OS sparkles with water-droplike buttons and translucent menus. The new OS, scheduled to ship in late summer, looks a tad gimmicky, with windows that shrink and expand like genies from their icons. But there was substance to the style as well; a new “dock,” similar to the Windows task bar but oh-so-much snazzier with icons, and a new Mac Finder with a file-tree option and an option to browse by file type.
But the biggest product announcement during the Macworld Expo keynote was clearly the upgrade in Steve Jobs’ title. Jobs returned to Apple before the departure of former CEO Gil Amelio in July 1997 as an advisor to the company; he quickly stepped into the “interim CEO” role — a post he has used to bring the company back from what seemed a near-death experience. Since his return, Jobs has directed Apple’s resurgence with the iMac and the iBook, a successful online Apple store and a $150 million investment from long-time rival Microsoft. Regardless of his title, Jobs has clearly been in charge and orchestrating major change.
When Bruce Chizen, executive vice president of Adobe — an Apple partner announcing support for OS X — got up to speak, he didn’t even make the semantic distinction between Jobs and Apple, talking about “Steve’s products” and “when Steve ships OS X.” The man is back, in name as well as spirit.
I‘ve always been a sucker for freebies. When I was 6, I remember negotiating over the phone with a volunteer for a public-television pledge drive; I was determined to pledge the lowest amount possible and still get the “Big Bird Busy Book” — “free.” More recently I have fallen for the old 12 CDs for a penny and four books for a buck, and once, I even bought a special super-absorbent towel which was supposed to cut hair-drying time in half, mostly because it came with a free set of perfume samples. Did it occur to me, as I was ordering this towel, that I have really short hair and don’t wear perfume? No — I was mesmerized by that word. Your free gift! Free with purchase! It’s freeeeeee!
Now there’s a cornucopia of free stuff I can get without even leaving my desk. As the Cool Freebies site puts it: “One of the best things about the World Wide Web is the availability of cool free stuff. There are more freebies out there than most of us will ever find.” With a little work — and a lot of luck — you could lay your hands on a free DVD player or even free Pokimon cards.
There are tons of Web sites devoted to nothing more than helping me find great giveaways. With their help I set off to find what I could really get for nothing online. Of course, almost no one is giving stuff away without expecting something in return; I would have to fork over time and information about myself: my age, income, weird facts like whether I own a cat or how many movies I see in a month. Luckily, my electronic persona, Olivia Lee, doesn’t mind divulging a bit of personal info. In fact, she’s downright casual about giving her e-mail address out. She’s got an account at a discount ISP; I figure that makes her a bit more respectable than a persona whose identity is confined to a free e-mail account.
As a persona and not a person, Olivia is not the least bit embarrassed about ordering samples of facial hair remover, say, or lingerie catalogues. She doesn’t care if every marketer in the country knows how much money she makes and what she does for a living. I enter Olivia’s name, e-mail address and other data for the AutoFill feature in my browser, Internet Explorer 4.5 for the Mac. AutoFill is the main reason I switched from Netscape to IE — you just hit a button and AutoFill plugs your data into online forms, AKA requests for freebies.
Some freebies require a self-addressed stamped envelope to send me coupons or samples. So, I sought out free postage to start with — and found it at Postage4Free, which gives out envelopes stamped with advertisements as well as stamps. I ordered some, but the envelopes never showed up and I had to buy a book of stamps.
To get into the spirit of the chase, I started my freebie pursuit at LuckySurf, a lottery-like site, where you get a free chance to win $1 million by picking seven numbers. I close my eyes for true randomness and click seven times. Then, because I have to click on an ad banner to “validate” my numbers, I click on the MyPoints ad.
MyPoints is like frequent flier miles for surfing; it awards points for buying stuff and reading special offers online. I’m aiming for a worthwhile prize: a free box of chocolates. After a half-hour of filling out the MyPoints survey — What is the birth year and gender of each of my children under 18? How many people does my company employ? How many round-trip flights I have taken in the last 12 months? — I have 150 points. I need 500 for the chocolates. But wait, the fine print tells me that new MyPoints members need to accumulate 1,000 points before redeeming any prizes. Argh. Time to seek out some less costly freebies.
I go to FreeShop, “your source for thousands of free and trial offers, stuff you actually want from brands you love.” Yes! Jackpot! Unfortunately, the site turns out to be mostly a source of free catalogues. There are also a few things which clearly do not pass my freebie litmus test, like “Try the new 8-lb. Oreck XL Vacuum risk-free for 30 days!” and “MoverQuote: Free Moving Quotes.”
I find better freebies through FreeShop’s links to other free stuff on the Web: a Clairol Herbal Essences Facial Care sample, a free Tampax tampon, a Candy Store candy sample. Oooh, I see that Urban Decay is offering a free gift; I’d love some free hipster makeup. But no, the company is giving away coasters. Coasters?
I move on to CyberRebate.com. Rebates are a little more work than plain old giveaways, but as the saying goes, there’s no free lunch. At CyberRebate, many of the products are free after rebate — except for a $3.99 shipping and handling fee. The problem is, most of the stuff I wouldn’t want if you paid me to take it. Hideous “Star Wars” souvenirs? (They didn’t sell for a reason.) I am momentarily tempted to order a resinous sculpture of the Rancor monster, or a mug shaped like the head of a drooling Gamorrhean guard, and have it sent to a friend as a joke.
Eventually, I find an RCA portable radio and cassette player. CyberRebates says it retails for $52.50 (comparison shopping site MySimon found the same model for $9.99), but that I can have it free if I’m willing to pay for it and wait for the rebate. So I agree to be charged $56.49 (the retail price plus shipping). However, after I get my radio and fill out the rebate forms, I read the small print and find out that my rebate is going to take 10 to 14 weeks to process. I fire off an e-mail to Sammy, a CyberRebates customer-service person, to ask if CyberRebates makes its money by collecting interest on pending rebates. He doesn’t write back.
To cut faster to the chase, I hit About.com’s freebie site, where editor Lee Seats picks what he thinks are the best freebies and weeds out the iffy ones. I send a quick e-mail asking him for tips of the free trade. Seats’ favorite is free long-distance service, and he recommends Broadpoint.com’s FreeWay. “I use it heavily, especially when traveling,” he writes. “It sure beats using expensive phone cards or paying hotel long-distance rates.”
That sounds good, but I want something that I can actually hold on to. On About.com’s freebies message board, another user has posted the first really great freebie I’ve seen. FamilyWonder.com, an e-commerce site for kids’ stuff, has an introductory offer for new customers: a free CD or video — you just pay shipping and handling. I’ve always wanted to see “Creature Comforts,” an Academy-Award winning short animation by Nick Park, the guy who created Wallace & Gromit. Bingo!
Later, I become obsessed with getting a free Jelly Belly sample. You have to fill out a survey to get jellybeans. The only hitch is, only 500 people a day can take the survey, which goes up at a random hour so that you have to keep checking back. I keep trying and trying — and realize this is just like gambling. But eventually, I win!
The good, the bad, and the totally random
Many freebie offers make me feel the same way I do at tax time, when you get deductions if you are blind or have a failed farm. I feel kind of relieved that I don’t have those things to write off. So it’s nice to be able to say thanks, but no thanks, to the free hair transplant video and free sample of constipation relief.
On the other hand, there are really wacky things out there that are too interesting not to send for — like
href="http://www.totallyfreestuff.com/offers/98/09/11/11a.asp">Llamalizer. Llamalizer is described as “an organic fertilizer … virtually odor-free.” The phrase “organic fertilizer” is obviously a euphemism for dried llama shit, but still, this is a freebie I want. Now I just need something to fertilize, so I search for seeds on About.com’s freebie site and find free wildflower seeds. Next, I request a free medal from the Association of the Miraculous Medal, which considers the medal a symbol of devotion to Mary. I’m not Catholic, but I have catholic tastes in jewelry. And who wouldn’t want to invite miracles into their life?
I send for these freebies knowing that the companies giving stuff away will want to subject me to avalanches of marketing in return. As a freebies junkie, I’m resigned to lots of nosy questions: What is your age range? Are you planning on having a baby in the next year? But one questionnaire, for a sample of Olbas medicinal oil, is more than nosy. It asks me whether I’d like to receive a weekly newsletter, and tacks this on at the end: “Note: You must agree to subscribe to the newsletter to receive the free sample.” Yowza. Now there’s a question with one right answer. A month later the fragments of a smashed Olbas “pastille” cough drop arrived, but I never did get the newsletter. (I think that might be the first miracle performed by my medal.)
In fact, I did not end up getting the torrents of spam I feared, only e-mail that I had agreed to receive. But in my freebie site travels, I also didn’t get much in the way of stuff I really wanted. I would have starved waiting for the handful of jellybeans to show up. After several days of hunting down freebies, I’ve come to the conclusion that if you need a goofy gift for a white elephant exchange, or are bored with your current screen saver, the Web is a great place to get it for free. Otherwise, think of trawling for freebies as a form of entertainment — like trying to grab a stuffed Wile E. Coyote with that large mechanical claw in the arcade — you don’t really need or want it, but it’s fun to try!
