Let's Get This Straight: February 1997 archives

Published February 28, 1997 9:30AM (EST)

Microsoft prefers maxipayments

The dream of "micropayments" -- penny-size fees for reading pages or using software tools -- has been one of the enduring ideals of Internet culture. The pioneering blueprints of Ted Nelson's Xanadu project, the thriving subculture of shareware entrepreneurs and recent startup ventures like Ideamarket have all been inspired by a similar vision: Make it easy and cheap for people to sell their ideas across computer networks, and you'll unleash a creative renaissance.

But hold on -- here comes Microsoft's chief technology officer, Nathan Myhrvold, to tell us why micropayments don't and won't work.

Myhrvold has for some time been using Microsoft's Web magazine Slate as a platform to expound his -- and presumably his employer's -- perspective on Internet economics. In his discussion of micropayments, "A Penny For Your Thoughts?" he grants that computers will inevitably continue to reduce "transaction cost" overheads -- a necessary prerequisite for any micropayment scheme to work. (If you're charging pennies a page, you'll lose money if it costs you 25 cents to bill each customer.) He argues that micropayments might work in industries where "products get used up" or where there aren't many repeat customers, but maintains that pay-per-use models are inappropriate for "intellectual property" like writing: They penalize heavy users, "screwing your best customer." He makes a persuasive case for why Slate -- along with other publishers, like Random House, who are contemplating online ventures -- is better off supporting itself through ads or subscriptions than by charging pennies per page.

Myhrvold is an articulate commentator, but he has a blind spot as big as a Windows 95 logo. Having proved that micropayments can't support Slate, he concludes that "micropayments will play a very small role in selling Internet content" -- as if well-funded professional magazines on the Net are the only kind of content worth discussing.

Yet micropayment visionaries have never viewed their scheme as an additional profit center for giant corporations. The idea has always been to create an opening in the marketplace for the little guy, the amateur, the individual author or inventor -- to allow them to earn some money (not necessarily a living) from their work, without having to first win the nod of some "gatekeeper" at a distribution chokepoint. Maybe this is brilliant and liberating, maybe it's a pipe dream; but Microsoft's inability to support a magazine by adopting it is quite irrelevant.

Microsoft's hobbled competitor Apple has long been criticized for having a "not invented here" mentality, rejecting innovations that didn't emerge in-house. Myhrvold's dismissal of micropayments suggests that Microsoft has what you might call a "not profitable here" mind-set: It's no good if we can't make money with it. That may be sound thinking in business, but it makes for unilluminating journalism.

Feb. 27, 1997

You eat your own words

The lead in the Feb. 16 New York Times Book Review's review of John Seabrook's "Deeper" is a thoughtful piece of work:

"You are your words" is the epigraph greeting users as they log on to the Well, an electronic bulletin-board system in northern California. Cyberspace remains a territory comprising mostly sentences and phrases, which is why the Well chose to place this admonition as a reminder to its users -- what you write here is who you are.

"You are your words" is indeed a valuable meditation on the nature of online communication. Alas, the Well's actual log-in greeting is You own your own words, and that means something quite different. It's both a philosophy of taking responsibility for what you say and an attempt on the Well management's part to find some down-to-earth protection from legal liability. The members of the high-profile, pioneering Well community have thrashed endlessly over the meaning and implications of "YOYOW," as they abbreviate the phrase.

Often, when mainstream media institutions get a digital story wrong, it's because they're relying on writers who don't know the online turf. But that wasn't the problem here. The author of the review, David Bennahum, runs a newsletter on Internet issues and history called Meme, hosts a conference on Electric Minds and is preparing his own book on a subject similar to Seabrook's. (Contacted for comment, Bennahum will only say that he "regrets the error.")

The glaring misquotation looks less like a slip and more like an indicator of deeper misreading as you go further in the review. Bennahum's chief complaint is that New Yorker writer Seabrook fails to engage with his subject, "remaining aloof, refusing to join the natives in their epistolary adventure."

Funny -- I found that to be the book's greatest strength. In the course of the two years his book chronicles, Seabrook goes from rank newbie lurker to conference host and home-page developer. More than any of his predecessors on the print-journalist-tours-cyberspace beat, he has indeed "gone native." And he has certainly engaged deeply enough with the Well to be able to quote its log-in banner accurately.

Feb. 20, 1997

Wired gets pushy

The palm of a ghostly blue hand jumps off the cover of the March Wired and into your face. "We interrupt this magazine for a special bulletin," reads the headline. "PUSH!"

The cover continues: "Kiss your browser goodbye: The radical future of media beyond the Web. By the editors of Wired. Remember the browser war between Netscape and Microsoft? Well, forget it. The Web browser itself is about to croak. And good riddance."

"Push media" means programs like Pointcast and Marimba's Castanet -- schemes for automating the transmission of content across the Internet, so that instead of you going to a Web site and "pulling" it down to your computer, the content providers "push" their wares out to you.

"Push" promises Net companies a new way to begin making actual money -- and threatens to transform the Web into a digital update of the broadcast media we already know so well. It's certainly a major story, and you can't fault Wired for jumping on it.

Still, Wired's eagerness to push "push" at us -- not only to cover it but to endorse it so gaudily -- is unseemly, to say the least. You see, the magazine's parent company is itself trying to build new businesses around "push" technologies, with its Wired News service on Pointcast, a new Castanet-based "Wired Desktop" and other ventures.

In other words, while one arm of Wired helps build a buzz around a new technology, another arm is all set to try to profit from it. That alone ought to make the front-page-bylined "editors of Wired" shudder. Even worse, the "push" technologies Wired is now telling us are the Next Big Thing pretty much negate all the neat features of the Web that Wired was extolling only a little while ago.

Not too long ago Wired was telling us that the Web was great because it took power away from big-media dinosaurs and put it in the hands of the little guy. Now Wired's saying "good riddance" to the Web. What it's really kissing off is its own credibility.

Feb. 13, 1997

America may be on hold 
but the Internet's not

America Online fought off hordes of angry users and their lawyers over the past two weeks. Users were taking advantage of AOL's new pricing plan, which turned off the service's hourly meter and offered unlimited hours for $19.95 a month. Usage of AOL skyrocketed beyond what the network had predicted, and users started getting busy signals when their modems tried to dial in. As some users grabbed phone lines and wouldn't let them go for fear of not being able to log in again, the problem spiraled, until AOL  threatened by action from various state attorneys general  had to agree to provide angry customers with refunds.

It was a big story that newspapers and TV stations understandably jumped on. But in their haste they got two things awfully confused: AOL and the Internet itself.

Predictions of "Internet traffic jams" have been bouncing around for so long now that some clueless news editors jumped when they heard about AOL's woes. Here it was  Internet gridlock! And that's how they spun the story. Even the careful New York Times blew its Page 1 headline: "Pushed by States, America Online Agrees to Refunds in Internet Jam," it announced.

Now, doubtless, large numbers of AOL's phone-line-hogging users were in fact using the service to access Internet-based Web sites or to send e-mail across the Net to users outside of AOL. But the problem was exclusively with AOL, not the Internet. There was no "Internet Jam"; if anything, the fact that AOL users were having a hard time accessing that network probably reduced a little of the load of Internet traffic.

AOL doesn't own enough modems to keep its customers happy right now. That's a problem for AOL, not for the Internet. The Internet has its own long-term traffic concerns, and there are all sorts of efforts underway to improve its infrastructure, increase capacity by adding backbone lines and provide faster, more reliable service. Someday maybe there'll be a real "Internet Jam." And maybe by then the mainstream media will be able to distinguish one kind of network from another.

By Scott Rosenberg

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