The great mystery of Internet profits
Article Abstract:
Starwave Corp is regarded by many industry insiders as a bellwether experiment in the profitability of World Wide Web-based information services. The Bellevue, WA-based company, a joint venture bankrolled by Paul Allen and sports channel ESPN, currently boasts 250 employees, 50 of whom are software engineers. This programming firepower enables Starwave to update its Sportszone Web site several dozen times per day. Sportszone offers its subscribers some 50,000 pages of hypertext, 1,000 video clips, 2,500 audio clips and 6,000 pictures. The service now features a subscriber base of 40,000 customers, each of whom pays $4.95 per month or $39.95 per year. If there is a lesson in this for content providers who seek to avail themselves of the Internet-based 'gold rush,' it is that information service providers need to identify areas where there is avid interest in the particular content. Deep pockets are also a boon, since it is estimated that Allen has invested about $60 million into the Starwave venture.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1996
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Compuserve says it expects to post a loss for the quarter; company shares fall nearly 20% on news
Article Abstract:
CompuServe expects to report a loss for the quarter ending Jul 31, 1996, and many analysts see the announcement as another signal that online services may not survive. CompuServe anticipates it will lose between $13.5 million and $18 million for its first full quarter as a public company. Investors reacted by driving the company's stock down $3, so that it closed at $12.50 on Jul 16, 1996, although it traded as low as $10.75 at times. When CompuServe made its initial offering in Apr 1996, shares cost as much as $35.50 each. CompuServe attributes the loss to an unanticipated decline in customer subscriptions. The company has 3.4 million subscribers, or 5.2 million when the subscribers to Niftyserve, a joint CompuServe venture with Fujitsu in Japan, are included. CompuServe is trying to improve its position by targeting niche markets, a plan that includes the new Wow service, designed for inexperienced users. The company is also upgrading its network to support faster transmission rates.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1996
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