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RealTime IT News

Microsoft, Intel Losing Grip on PC World (cont.)

The screen's the thing

How involved PC makers get in electronic commerce might depend on how much control they get over the PC screen--the window to the Internet and now very valuable real estate. For the most part, Microsoft controls the screen because it provides the PC's operating system. The Justice Department is seeking to give PC makers more control and flexibility.

Gateway, for instance, builds PCs to order. CEO Ted Waitt says Gateway would like to ask consumers what their interests are. Then, it could preload software or bookmark browsers to quickly take that consumer to Internet sites that cater to their interests. Those sites could conceivably pay Gateway for directing the consumers. Waitt says Gateway's current contract with Microsoft prevents that.

"If our customers want us to do something, we feel we should be able to do it," he says.

Packard Bell-NEC and Compaq are working outside the Windows desktop to get a slice of the e-commerce action. The upcoming Compaq Presario PCs, with new keyboard buttons, will take users directly to Internet sites such as Yahoo, Amazon.com and the Disney Store. Those companies, then, will pay fees to Compaq based on the number of visitors that use Compaq PCs. Compaq also will guide users to its new ISP service. Compaq expects $1 billion in revenue by 2001 from fees and ISP revenue.

Using technology from Pixel, a small Seattle company, Packard Bell-NEC will put its direct Internet links on a one-half inch slice at the bottom of the PC screen. Today, the area is an unused black border that can only be removed if users want Windows to be full screen. Pixel's "My Space" control bar will take users to such sites as the on-line bookstore, Amazon.com, the on-line music store, CDnow, Disney, ABC News and ESPN. Pixel collects revenue from those companies and pays Packard Bell-NEC. Pixel is pursuing other PC makers, it says.

More PC makers also are likely to craft deals similar to those Compaq has with Yahoo and Apple Computer has with Excite, says Brett Bullington, Excite executive vice president. After a Macintosh user launches Internet Explorer, the user goes directly to an Excite page. Apple doesn't get a cut of Excite's advertising revenue collected from the page. But it does get its logo on the screen and a place to promote products and services. "More and more of them are starting to see the opportunity," Bullington says. "If you are a Compaq or a Dell, you want to have your brand name in front of consumers. Right now, the brand name you see is Microsoft."

PC makers are more likely to prefer partnerships than they are to start new lines of Internet-based business, analysts say. After all, they are computer makers not media companies. "That's not our core business," says Mal Ransom, senior vice president of Packard Bell-NEC.

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