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More stories by this authorPlans call for spinning out the MTV Online enterprise which, for the time being, will include SonicNet and its Addicted to Noise property as well as MTV.com, VH1.com, and a new brand being developed as part of the recent acquisition by Viacom of Imagine Radio. In addition, MTV is working on an interactive television channel -- a sort of Gen X QVC that will sell music, concert tickets and the like.
But how long MTV keeps alive multiple competing brands remains a matter for speculation. SonicNet is generating some revenue. According to TCI Music's first quarter revenue announcements, SonicNet generated $596,000 in revenues in the first quarter of 1998. But as a component of MTV, that revenue will hardly be meaningful. So the integration of MTV's various online properties may ultimately be inevitable. According to SonicNet honcho Nicholas Butterworth, SonicNet will expand, not trim staff under the new arrangement. But management is in flux at MTV's interactive unit. This week Matt Farber, former executive vice president of MTV Networks Online and the man who spearheaded strategic planning and development of MTV and VH1 Online, left Viacom to join ICast, an Internet broadcasting start-up funded by CMGi. Inside sources say Butterworth is under consideration for Farber's job.
Butterworth declined to comment on management changes at the new enterprise. For SonicNet, the MTV acquisition represents the final chapter in the evolution of a Silicon Alley pioneer that's changed corporate hands at least four times. The company, begun by entrepreneur Tim Nye as a bulletin board service for fans of modern rock, was sold to Prodigy, bought back from Prodigy, sold to Paradigm Entertainment, which was in turn acquired by TCI, and now has been sold to Viacom.
"Our partners have gotten larger and larger," said Butterworth. "And when you get to the spot where you're with the largest player in the space and there are plans to spin it out I'd say you've come as far as you can come."
SITEBRIDGE ACQUIRED BY EGAIN, PLANS MOVE . . . Sunnyvale, CA-based online customer service company eGain this week acquired Silicon Alley online customer service player Sitebridge. Financial terms of the deal were not announced. But the companies will move swiftly to integrate eGain's Web-based, e-mail focused customer service software with Sitebridge's realtime, Web based, customer service solutions. And the two companies will be merged swiftly with most of Sitebridge's 17 employees relocating to California.Sitebridge (http://www.sitebridge.com ) founder Wendell Lansford will remain in New York to set up an eGain sales and marketing office here before joining the rest of the staff in California.
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VMware Takes Virtualization To The Streets10 Things CIOs Need to Know About the CloudBlue Coat Backing Armored BrowserVerizon Steaming Ahead With 4G LTE NetworkGoogle Reportedly Testing TV Search Service"It was very much a case of one-plus-one equaling three," said Lansford, who acknowledged that a race is on among a plethora of customer service players to grab clients quickly. In addition a race is on to partner with some of the traditional call center outsourcers used by traditional retailers, he said.
The announcement that Sitebridge is leaving for the coast marks the third time this year that a Silicon Alley start-up has left New York for lands west of the Rockies. GT Interactive recently announced plans to relocate its headquarters in Los Angeles. And NeoPlanet recently relocated to Phoenix.
The merger also marks an escalation in the pace of growth in the subsector of the Internet business that focuses on providing back end systems for e-commerce companies to use to provide real time customer service and sales help through e-mail, Web chat, and other collaborative applications. Sitebridge has been competing with two other venture-funded players -- eShare and LivePerson. Each company claims to be the "biggest" player in the space, measuring size by different metrics. The newly-merged eGain plans to have 110 employees and 70 customers by the end of the year, according to Ryan Rosenberg, the company's vice president of marketing.
A2B MUSIC FOUNDERS BOLT FROM AT&T,JOIN RECIPROCAL . . .
After unsuccessfully negotiating a spin-off from AT&T, the founders of A2B Music -- AT&T's online music distribution initiative -- this week left the telecom en mass and joined Reciprocal, a local company that provides backend systems for clearing rights for the digital download of copyrighted content."We needed to grow our music focus," said Reciprocal CEO and President Paul Bandrowski "This is a first step in the consolidation that going to come." A2B Music co-founders Larry Miller and Howie Singer and their senior management team will head a new, New York-based division of Reciprocal called Reciprocal Music that will work with record labels to secure copyright protection for digital downloads. The company will be adding staff and will function semi-independently from Reciprocal's other operations.
"AT&T's asset set changed and music was so important to them that they decided they wanted to keep it close," said Singer. "Larry and I wanted to be more entrepreneurial."
In fact, Miller and Singer had been discussing funding for a possible spin-out of A2B Music when it was suggested by Reciprocal investor Clifford Friedman of Constellation Ventures that a move to Reciprocal might be better.
The acquisition of the A2B management team, coming on the heels of an investment in Reciprocal by Microsoft, suddenly and dramatically boosts Reciprocal's position in the music industry as the major labels escalate their response to the explosion in digitally downloaded music. Here's why. Reciprocal is a back-end company designed to provide a secure wrapper around copy-protected content that can only be opened by authorized users. The idea is to let copyright holders control the terms and conditions by which consumers access digital information. Reciprocal is as much a service company as a software company, offering back-office infrastructure to handle asset management, to track royalty payments, to audit usage, and to collect consumer data.
Record companies are currently casting about for a technology mechanism that can work with MP3 or any other downloadable format for protecting copyright. Reciprocal Music will position itself as that solution, working with any number of music formats from MP3 to Liquid Audio to Microsoft's Media Player, and several secure transaction platforms. Although Reciprocal CEO Paul Bandrowski won't confirm any music industry deals, Reciprocal does have a relationship with InterTrust -- a California-based secure transaction technology company that is providing the backend for Universal Music's new digital download initiative. And Microsoft -- an equity investor in Reciprocal -- recently announced that Sony Music would be using Microsoft's Media Player as the distribution platform for its digital download initiative. Reciprocal would likely provide the rights clearance mechanism for that relationship.
The relationship between the A2B team and AT&T might also be handy. Although AT&T is working on its own platform for delivering music and clearing rights, Bandrowski suggested that the company my instead turn to Reciprocal for at least the rights clearance portion. "This is a first step in an ongoing relationship between Reciprocal and AT&T," he said.
CULTUREFINDER.COM CAPTURES COMCAST CASH . . . One of Silicon Alley's most longstanding content companies, CultureFinder.com (http://www.culturefinder.com ), is getting a $3.75 million shot in the arm from the venture fund of the Comcast cable company. Pennsylvania-based Comcast, you'll recall, recently locked horns, then struck a deal with AT&T over the acquisition of MediaOne, in a battle that was widely seen as having significant implications for the future of broadband. The financing of CultureFinder, too, is illustrative of Comcast's long-term broadband ambitions. In the short term, the money will allow the online arts listing and ticketing service to expand its offerings -- adding more e-commerce and personalization features, and launching more visible marketing efforts. But in the long term, Comcast sees localized online arts content and ticketing as an essential element in a cable-modem or set-top box enabled broadband Intranet."We'll be offering all kinds of Internet-like services through these set-top boxes on the TV set," said Julian Brodsky, chairman of Comcast Interactive Capital Group. The vision sounds a lot like any number of failed wired-community experiments, but perhaps it's an idea whose time will eventually come.
CultureFinder, which was founded by Eugene Carr in 1995, is one of several local companies in which Comcast has taken a stake, presumably to keep its hand in the content and commerce that will become the programming for broadband networks. Earlier investments include About.com (formerly MiningCo.com), BizTravel.com, Linkshare, and Deja.com (formerly Deja News).
So far, CultureFinder has been funded by angels, including Arthur Zankel, general partner of First Manhattan Co.; Bob Lessin, CEO of Wit Capital; Tom Stemberg, CEO of Staples; and Stuart Moldaw, chairman of Gymboree. AOL helped launch CultureFinder on its online service in 1996, and provided some financing through its Greenhouse program. The site has been getting about two million pageviews a month, without the company having invested any money in marketing.
But marketing is part of the plan for spending the new $3.75 million. In addition, the company will add technology so users can customize CultureFinder to suit their interests -- both to match their geographical location and their interest in a particular art form. It's a My CultureFinder.com kind of play. "People are very genre-specific," said Carr. "There are dance lovers and there are classical music lovers."
The site makes its money from advertising targeted at its high-end demographic audience, but it also plans to beef up its e-commerce offerings, which currently appear to simply involve affiliate relationships with Expedia, Amazon, CDNow, Reel, Image Exchange, and Virtual Vineyards. Ticket service fees are another big piece of the revenue puzzle for CultureFinder. The company charges $4.50 per ticket that it sells, over and above any service fee that the venue or an exclusive ticket agency like Telecharge or Ticketmaster would ask for. But Carr insists that's not a problem for his customers. "We have not found that the service fee is not something that gets in our way," he said.
There are other potential flaws in the system, though. There's no instant confirmation of your seat assignment, as you'd get from either of the other agencies, and you have to pick the tickets up at the venue rather than having the option of getting them mailed to you. Still, Carr expects there to be some major shakeups in online ticketing over the next five years, and he hopes that changes will improve his competitive position.
MININGCO AIMS FOR TOP STATUS WITH NEW NAME . . . So what's the deal with Mining Company's name change to About.com? It's all about the realization that while the original name and concept put the company on the map, it was never going to put it into Yahoo-Excite-Lycos territory. If your goal is to become a top five Internet portal player, the mining metaphor wasn't going to cut it, CEO Scott Kurnit -- a big media veteran -- quickly came to realize. Even though the company, which began trading yesterday under its new BOUT symbol, is spending $15 million on its new brand awareness campaign, the heavy lifting will come in the months to come -- as Kurnit and Co. try to leverage the critical success they've achieved with human-guided Net surfing into a full-service, high-visibility portal player. About.com retains its 650 guides, experts on everything from knitting to amateur Web pornography, who are paid in stock and a split of the ad revenues. The new branding, the company believes, also gives About.com the chance to increase its e-commerce reach. This morning, About.com announced a deal with Borders.com to create branded bookstores linked to the guides and 17,000 different subjects across the About.com site. While the guides remain central, look for the company to concentrate its recent IPO money on hiring more salespeople and on adding all the bells and whistles of a major Net portal, including new personalization features.@DEADLINE: AGENCY.COM BUYSCHICAGO AREA FIRM . . .
Silicon Alley interactive services firm Agency.Com is on the acquisition march again, today announcing that it has gobbled up Schaumburg, IL-based service firm Digital Vision Communications. Digital Vision will merge with the existing Agency.com Chicago office. David Johnson, president of Digital Vision, will serve as president, Agency.com: Chicago, reporting to Kevin Rowe, president, Agency.Com: North America. Financial terms of the deal were not announced. Founded in 1995, Digital Vision's best known client is General Instrument.< ONES AND ZEROS >1-0-1-0 -- Razorfish -- The interactive services company announced a new Web presence for BankOne, the nation's fifth-largest bank holding company. The new Web site (http://www.bankone.com ) uses Vignette's StoryServer software to dynamically generate and update customers' pages for 330,000 online consumers.
1-0-1-0 -- Register.com -- Office supply retailer Staples has made $7 million investment in domain name registrar Register.com, a division of Silicon Alley's Forman Interactive. As part of the deal, Register.com and Staples' online store, Staples.com, will promote one another with banners and links, helping each better reach small business owners.
1-0-1-0 -- MaMaMedia -- The kids Internet site debuted its co-branded content in the "Kids" section of the high-bandwidth cable-modem Road Runner service.
1-0-1-0 -- Ivillage -- The Silicon Alley online publisher for women has inked a $1.7 million, year-long sponsorship deal with pharmaceutical giant Glaxo Wellcome which will promote its various brands through a variety of IVillage health properties.
1-0-1-0 -- Bluefly -- Silicon Alley discount apparel retailer has cut a promotional deal with Women.Com that gives Bluefly key word banners, fixed positioning on the Women.com Shopping Channel, and seasonal promotions and sponsorship buttons throughout the Women.com Networks.
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