Microsoft Invades Altie Turf

Now let's see. Microsoft already puts out its own encyclopedia. It's developing a 24-hour news service with NBC. It's got a new on-line political magazine on the way, edited by Michael Kinsley. Microsoft, it seems, having dispatched all competing software for operating personal computers, is now embarked on a plan to provide all the news and information that we receive over those PCs. The next stop on Gates' World Domination Tour '96 is an on-line publication known as Cityscape, and it may be coming to a city near you.Cityscape is likely to strike fear into the hearts of newspapers and other publications around the country because it further chips away at some of the core reasons people show up at the local newsstand. In this case, Microsoft intends to produce a "comprehensive entertainment guide," with club listings, movie schedules, dining tips, and so on, all posted city by city. It's the sort of thing many daily papers offer and certainly forms a big chunk of the material presented in alternative newsweeklies across the country.Microsoft marketing manager Richard Tait says the project is in the very early stages and the staff is still "very small." But most everyone who's heard about the venture expects it to be a major deal. It's being developed in the newly named interactive media division under Patty Stonesifer, one of Microsoft's highest-profile executives. One rumor has Bill Gates quadrupling the Cityscape budget after hearing the business plan.Yet Microsoft has made an art of driving up expectations in order to intimidate the competition. It's hard to think of a Microsoft launch in recent years that didn't fall short of the hype. As Bob Smith, a manager at America Online observes: "With Microsoft, the swell is always bigger than the wave."Tait indicates that the initial plan is to roll out the service on a test basis in New York and Washington, DC. From there, the company will try to gauge customer response and tailor further efforts accordingly. "We're still deciding on exactly what type of content we'll have in the product," Tait says. The company is also evaluating what other cities to take on, though most observers expect the project to have national scope. Consistent with Microsoft's new effort to tie all its efforts to the Web, Tait says that Cityscape will be "closely linked" to the company's on-line service, the Microsoft Network, but will also be available to anyone via the Internet.Contrary to the usual Microsoft MO, Cityscape will not have a Redmond, WA-centric team. The company has been interviewing editors who would be based in New York City, and a Microsoft employment ad describes the publication as having a "Northeastern regional flair." "We think it's going to be very important to have the character and personality of each city," says Tait. While the name "Cityscape" is used internally at Microsoft, the final product will be called something else.Microsoft is by no means the first to develop an on-line guide to urban entertainment. Many such services are already up on the Web, some of them created by the alternative press. In fact, there's even a site already named Cityscape, put out by a Web page design firm in the UK, which offers a pretty haphazard, city-by-city calendar of U.S. events.On the national level, the most direct competition will probably come from America Online, which already offers an elaborate guide for the Washington, DC, area. It's called Digital City and much of it is given over to the coverage of nightlife and entertainment, though there is weather, sports, and other newspaper-style information as well. Bob Smith, who heads Digital City, says he plans to develop the concept for 20 more major urban centers. He's beta testing in Boston right now.In contrast to what we always imagined cyberspace was about -- virtual communities, where people with similar interests can meet, regardless of their physical location -- Smith says the focus is now shifting back to plain, old-fashioned neighborhoods. Like Microsoft, Smith hopes to make the Web the place for local info.If that's going to happen, Digital City, at least, will need some serious buffing up. Like so much of the Web, the Digital City experience is more like slow torture than breezy convenience. Just to retrieve a single showtime of one movie at one cinema, you have to wade your way down half a dozen screens with the customary retrieval delays between each. The dullness of the visuals is surpassed only by the inanity of the copywriting. A blurb for the film Black Sheep, for instance, reads: "Chris Farley and David Spade are teaming up for yet another silly attempt at comedy. From Saturday Night Live these two have emerged into the modern-day Laurel and Hardy. Or should we say 'hearty." The New Yorker this ain't.For the alternative press, already struggling with the question of whether and how to go on-line, ventures like Digital City and Cityscape are looking, in perhaps equal measure, like a threat and an opportunity. Bob Smith concedes that some publications might feel nervous that Digital City is going to suck away readers. But he is hoping to partner up with some of these papers, saying that while "there'll be a lot of overlap, there will also be endless opportunities for cooperation." In Boston, for instance, The Phoenix, a popular weekly paper, is supplying arts and entertainment material to Digital City. (The Phoenix is maintaining a separate Web site at the same time.)It's unclear at this point whether Microsoft intends to form cooperative arrangements with existing papers or will simply amass its own staff of arts and nightlife experts and start from scratch. For the moment, it appears, they intend to do both. Linda Nelson, vice president of New Media for Stern Publishing, which owns The Village Voice and two Los Angeles-area weeklies, says she has been contacted by Microsoft about a potential partnership as well as for suggestions of people Microsoft could hire. David Plotz, senior editor of City Paper in Washington, DC, says that a Microsoft representative approached him a few weeks ago seeking the names of people in DC who might serve as editor and publisher for the new venture. But he says there was no discussion of Microsoft using content from his paper. When asked if the company was planning to incorporate material from papers like The Village Voice or City Paper, Richard Tait replied: "I think our partnerships could take many different variations, and those types of publications might be good candidates for us."The attractiveness of the alternative press for Microsoft is easy to see: These papers generally specialize in urban cultural life and have a wealth of experience writing about it. Plus they already have relationships with the advertisers who like to be a part of the arts scene. The weekly papers, and their audience, also tend to be a little younger, hipper, and more tuned into the Web than their counterparts in the big, daily newspaper world.The alternative press can also be pretty meek at the negotiating table. While many of the papers are financially solid, and some highly profitable, most are independent, without the resources of a big newspaper chain to back them up. As one Southeastern editor observes: "Microsoft can push around the small newsweeklies, whereas the big papers are owned by corporations like Gannett and Knight-Ridder."From the papers' point of view, the benefits of a Microsoft alliance could be significant, depending on the terms. "Microsoft obviously has a much larger marketing budget than The Village Voice would ever hope to have," notes Linda Nelson. "Recognition, visibility -- those are the gains." Such gains would be even more valuable to the many regional papers that are less well-known than the Voice. Still, Nelson, for one, is disinclined to link arms with Microsoft. As the Voice expands and refines its own Web site, Nelson says, "Microsoft's value to me grows less and less every day."What's more, the experience of several papers with an earlier Microsoft venture does not provide an encouraging picture. For a site on the Microsoft Network called Music Central, the company prevailed upon a dozen independent papers around the country, including the Seattle-based Rocket, to supply their music and club news, for free. The papers, in turn, could sell advertising on their parts of the site. "They had a divide-and-conquer strategy," says one on-line professional at a participating paper. "They were pretty aggressive in saying, "There's plenty of other people we could go to for listings." While Rocket editor Charles Cross expresses satisfaction with the project, most editors contacted say the Music Central experience has been essentially a washout. "It's buried in the bowels of MSN," says one editor. "We have no reason to believe it has any readers." Certainly Microsoft has supplied no reason: The company won't tell the participating papers how many users are hitting the site, claiming the numbers are "proprietary." That makes it nearly impossible for any of the papers to sell advertising.Some members of the alternative press are troubled, just on principle, at the notion of forming an alliance with Microsoft. Dan Pulcrano, editor of the San Jose Metro, which serves the southern half of Silicon Valley, complains about "papers that have spent their entire careers railing against monopolies [now] lining up to get into bed with the greatest monopolist of all time." He thinks that publishers who are scared and perplexed by the emerging on-line world will just end up "taking the easy path." The Voice's Linda Nelson concedes that from an editorial standpoint, she'd prefer not to be in business with Microsoft. "But from a publishing perspective," she says, "I have to come up with a business plan that makes us successful."


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