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BA 491.33

Marketing and Technology

Professor John M. McCann

Overview

This course is about technologys impact on marketing, how firms have and should use technology

to support their marketing and related functions, and how a Fuqua grad could take advantage of the

new opportunities that flow from the new situations that will continue to emerge as the

technologies evolve. The primary technology is the Internet because it is having the biggest impact

of any technology on the practice of marketing. Thus a major aspect of this course is the study of the

Internet, its implications and its uses. But because the Internet is alive and being continually fed by

underlying technologies, we need an understanding of the more fundamental computer and

communications technologies that have enabled the emergence of the Internet. We will start our

study with a focus on those digital technologies, move to the Internet itself, and then on to the next

incarnations that are coming our way via these same technologies. At all times, we will focus more

on the implications and uses of the technologies than on the technologies themselves.

Goals

The goal of this course is to prepare the student to be a leader in a corporation (small or large) that

is being impacted by the emerging digital technologies. Such leadership ability requires an

understanding of:

Todays underlying digital technologies,

The current implementation of those technologies: the Internet,

The ways that the Internet has enabled new business opportunities,

The evolving digital media that will be enabling the creation of second-generation Internet

environments, digital television, and other enabling platforms,

The business models of the entities that are converging to create these new platforms,

The opportunities that arise as new technologies obsolete the existing business models.

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It is amazing that, for all practical purposes, the Internet is only a few years old and that its uses and

impacts are becoming well-known. One of those impacts is the increase in speed at which modern

businesses have to operate in order to compete on a national or global basis. The Internet is

changing the rules in industries such as publishing, education, automotive and consulting, and as it

evolves it touches more and more industries. To be a business leader today, one has to understand

this evolution and its likely impacts. Thus we cannot restrict our study to todays Internet; we must

understand the underlying technologies so that we can make reasoned predictions of the coming

impacts of digital computing and communication technologies.

The next big leap is likely to involve the related emergence of 1) digital television transmission (DTV),

2) the broadband Internet, 3) broadband intranets, and 4) teleputers. All of these technologies are

becoming available in 1998 in one several forms and formats.

Project

The study of technologies and their impacts can be exciting for some and sterile for others. It is only

when one delves into the implications of those technologies for a meaningful organization that the

topic becomes alive. In the past, I have required students to write a paper about the implications of

these technologies for an organization of their choice. Here are some titles of those papers:

Marketing Industrial Products on the Internet: A Case Study of Allied Signal Aerospace

The New Age Realtors

The Digital Revolution and Hollywood: What Will Happen to Entertainment?

The Concept of Cyber Care

The Anachronism of Travel Agencies

Marketing at the Kimberly Clark Corporation in the Year 2015

The Future of Pharmaceutical Sales

The Future of McNeil Consumer Products Company

Some students became sufficiently engaged in their project to get significant value out of the

exercise; others seemed to just go through the motions as a means of completing the course. This

year, I want to provide an option in which we collectively design a new entity for the Fuqua School of

Business the Fuqua Channel.

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HBS enjoyed that #1 ranking for a very long time, and its large publishing operation was one of the

primary reasons. It gave the school a renewable source of income, its professors contact with many

leading business executives, and its students exposure the current business practices and problems.

HBS is very busy making the transition to a multimedia publishing business. It is clear that the HBS

deans sees the Harvard Business School Press (HBSP) as a publishing business, one that is evolving

from a print publisher to a multimedia publisher of text, interactive books on CD-ROM, and videos.

Rather than start with a print publishing model, we will see ourselves as a broadcaster, one that is

not evolving from a traditional broadcaster but one that is starting as a digital broadcaster. The last

couple of years of the 20th century are a conception period, a period of time where digital television

is being conceived. The early part of the 21st century will be a transition period in which the

television industry undergoes several transitions:

From

To

Analog television

Digital television

One standard (NTSC in U.S.)

Multiple, higher definition standards

Broadcasting

Narrowcasting

Channel & Time model

Content Model

On-schedule transmission

On-demand transmission

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Few producers

Many producers

Expensive broadcast stations

Cheap narrowcasting stations

Stand-alone TV

Internet-supported TV

During all conception and transition periods, new entities enter established industries such as

broadcasting and it is common for some of those new entities to grow to very large firms and some

of the established firms to disappear. Microsoft and Intel entered the computer business during the

transition period associated with the microprocessor, and they now control a large part of this

industry, and the role of established companies such as Honeywell, UNIVAC, Burroughs, Data

General have been severely diminished. The same phenomenon is likely to occur in the broadcasting

industry.

There are many segments of any industry, and the broadcasting industry has its established

segments, such as terrestrial television, cable television, radio, etc. One of the key words that

characterizes most of those segments is scarce: Scarce bandwidth, scarce talent, scarce executive

talent, etc. Another key word used in this industry is expensive: Expensive talent, expensive

equipment, etc. Digital technologies in the form of new computing and communications equipment

are reducing the relevance of scarce and expensive as drivers of the new television era. Plentiful and

cheap will replace scarce and expensive as drivers of new business models of the 21st century digital

television world.

Details of the project will evolve during the first two weeks of the course.

Daily Assignments and Class Sessions

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The document Course Schedule contains a list of reading for each course, along with questions for

each reading. Each student must read each assigned article and be prepared to discuss the questions

in class (and any others posed during class by students or the professor).

Class Sessions

Class time will be devoted to discussing the reading, visiting corporate WWW pages and discussing

corporate uses of the Internet, watching and discussing videos and lectures, and interacting with

visitors.

Grading

Grades will be based upon three activities:

Class participation 25%

Examination 25%

Project 50%

Course Schedule

T January 20 Course Overview, Digital Technologies

"Into the Telecosm, "Harvard Business Review, March-April 1991

"Fiber Keeps Its Promise," Forbes ASAP, April 7, 1997

"Communications: The Next Wave," Forbes, October 6, 1997

"Digital Warriors Want Baby Bell's Blood," Wall Street Journal, December 8, 1997

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"The Law of the Photon," Forbes, October 6, 1997

F January 23 Internet

"Networks" Scientific American, Special Issue: The Computer in the 21st Century

"The Economics of the Internet," The Economist, October 19, 1996

"The Silicon Age? It's Just Dawning," Business Week, December 9, 1996

T January 27 Changing an Industry from Place to Space

"Managing in the Marketspace," Harvard Business Review, Nov-Dec 1994

"The Airline of the Internet," Wired, December 1996

F January 30 Digital Media Technologies

"ADSL: Another Pipe Dream," Computer Shopper May 1996

"Craig McCaw Sees an Internet in the Sky," Fortune, May 27, 1996

"Going Digital Means Sharper Boob Tubes," USA Today, Jan. 8, 1997

"Intercast Brings the Web to TV," PC Magazine, Jan. 21, 1997

"Technology and the Future of Broadcasting," Web-Star (Internet web site)

"Streaming Media," Boardwatch, December 1997

"Real Revolution," Wired, October 1997

T February 3 Digital Television

"Bit by Bit, PCs Are Becoming TVs," Wired, August 1995

"Broadcasting is Finished," Forbes, October 6, 1997

"George Gilder's Telecosm: Life After Television, Updated," Forbes ASAP, February 23, 1994

"HDTV: What's Wrong with this Picture," Wired, Premiere Issue, 1993

"Object-Oriented Television," Wired July 1996

"The End of TV As We Know It," Fortune, Dec. 23, 1996

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F February 27 Projects

Questions

The following questions should be answered as you read each article. Be prepared to discuss these

questions in class. The examination will be composed of a subset of these questions.

T January 20 Course Overview, Digital Technologies

"Into the Telecosm, "Harvard Business Review, March-April 1991

"Fiber Keeps Its Promise," Forbes ASAP, April 7, 1997

"Communications: The Next Wave," Forbes, October 6, 1997

"Digital Warriors Want Baby Bell's Blood," Wall Street Journal, December 8, 1997

"The Law of the Photon," Forbes, October 6, 1997

F January 23 Internet

"Networks" Scientific American, Special Issue: The Computer in the 21st Century

What is a computer communications protocol?

What is distributed computing?

What is a knowbot? What role are they expected to play?

What is circuit switching? What is packet switching?

What are the pros and cons of circuit switching and packet switching?

How does Ethernet work? How does Token Ring work?

What is Asynchronous Transfer Mode (ATM)?

Why is current cellular technology (not wireless, but cellular wireless) not well suited for the

Internet?

"The Economics of the Internet," The Economist, October 19, 1996

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Why is the Internet swamped today? Has it always been so?

What is the financial model used by the Internet?

What is an intranet? An extranet? Why are they becoming popular?

What does the phrase "too cheap to meter" mean?

What is the relationship between fixed and variable costs in a telecommunications network?

What is expected to "bring prices closer to real costs?"

Why do some economists argue to use-based pricing of the Internet?

In the early days of the Internet (e.g., 1990) delays meant that different parts of a file would be sent

through different routes and thus might arrive at the receiving computing with various delays. Why

are such delays more bothersome today?

What is a settlement mechanism? What has been the common mechanism among telephone

companies, and where are telephone companies going?

What has been the Internet's settlement model? Why has this model led to a major disagreement

among small Internet Service Providers (ISPs) and the large Internet backbone providers? Why is this

settlement model so bad for non-US ISPs?

What schemes are being proposed to overcome the settlement and congestion problems?

(Where are the bottlenecks; in the wires/cables/fibers or in the electronics?)

"The Silicon Age? It's Just Dawning," Business Week, December 9, 1996

Why is the chip so important?

What did Andy Grove mean when he said, "we are only at the beginning of this revolution-in-

progress?

What metric do we commonly use to measure the speed of chips? If you bought a new PC today,

what would be the likely speed of the chip? What will it be in 15 years?

(How is a chip's speed related to the number of transistors in the chip?)

What is the size of a transistor on today's chip? What problems do such sizes cause?

What is a Net Computer? How does it differ from the ones we use at Fuqua?

What is the meaning and implication of the closing sentence: "After the turn of the century,

everything you touch will have a chip in it."

T January 27 Changing an Industry from Place to Space

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"Managing in the Marketspace," Harvard Business Review, Nov-Dec 1994

Explain what the authors mean when they say "the AUCNET system has made the physical location

of inventory and the actual site of buying and selling irrelevant." Describe other situations (not in the

article) where this is true.

A marketspace transaction differs from a marketplace transaction in terms of content, context, and

infrastructure. You are getting your MBA in a "place" and are thus part of a marketplace. Apply the

content, context, and infrastructure concepts to this MBA program. What is the content? Context?

Infrastructure?

On page 145, the authors describe how a newspaper adds value in the marketplace by controlling

content, context, and infrastructure. They then describe the AOL model in which its value

proposition centers only on its context. Use this same logic to breakdown a television example. For

instance, consider a TV network such as CBS in the U.S. or BBC in England. Is a network an aggregate

collection of content, context, and infrastructure? Why or why not? How about a local TV station? Acable television channel such as the Discovery Channel or the Weather Channel? A particular TV

show such as Seinfeld (which is produced by an independent company)?

What is the Fuqua Schools value proposition in terms of content, context, and infrastructure? How

might it evolve?

Is Fuquas value proposition similar to the traditional newspapers value proposition? How could

we change our strategy to focus only on content? Only on context? Only on infrastructure?

"The Airline of the Internet," Wired, December 1996

Why is logistics the next phase of the digital revolution?

What is the meaning of the phrase "bits, not atoms, will be the bedrock of economic activity in the

Information Age"?

Since 1980, more and more goods are moving via jet airplanes, which is the most expensive way to

move items from one point to another. Why, then, has the expenditure on logistics in the U.S.

dropped from 17.2% of GDP to 10.8% in 1995?

What business was FedEx in, and what business is it in today?

FedEx rose to a large company by "riding the leading edge of two trends that have revolutionized the

shipping business since the late 1970s: the deregulation airline and trucking industries in the US, and

the rise of information technology." Why do you think it took a new firm, one outside both the

technology and the airline & trucking industries, to ride the leading edge of these two trends?

The telecommunications industries are just now undergoing a deregulation, and their new

information technologies are rising. Do you think that a new firm will come along and take over large

portions of this industry, just as FedEx did in the shipping industry?

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"It's a core tenet of the FedEx gospel that the data about each shipment is just as valuable as the

shipment itself." Is that really true? Why?

Why is the Internet an answer to their prayers? What are FedEx's plans for the Internet?

Smith says, "The way to substitute information for mass is to make a distribution system that's as

good as a warehouse." What does he mean?

Smith says "The Internet is going to make it very difficult for anybody in a middleman position to

stay in business." Reflect on this statement. IS it true? Identify five middlemen who are exposed to

such elimination.

Will the Internet (and FedEx's vision of its impact) increase or decrease the role of marketing in the

future operation of most firms?

F January 30 Digital Media Technologies

"ADSL: Another Pipe Dream," Computer Shopper May 1996

What is ADSL?

ADSL is a form of a DSL ... a digital subscriber line. What are the other forms and how does ADSL

differ from them? Why is it important to know the unique feature of ADSL?

Why might ADSL service grow rapidly? What is it about the technology that could allow telephone

companies to quickly roll it out in a city such as Durham?

This article uses a lot of jargon (4khz DC region, frequency division multiplexing, etc.) that we will

ignore. But it does mention MPEG and MPEG-2. A search of the web using the phrase "mpeg

definition" led me to the Interleave site (http://www.interleave.co.uk:80/video.htm) where I found

the material shown below. What are the implications of being able to move multiple MPEG streams

into the home via existing telephone wires?

"MPEG (Moving Pictures Expert Group) is the new world standard for digital video, the momentum

of which is impacting industries from Hollywood to Telecommunications.

MPEG is taking off like wildfire in areas such as marketing, sales, training, and home entertainment.

MPEG-1 is primarily targeted at the computer platform, playing 30 frames per second at 352x240resolution

MPEG-2 is designed for High-Definition Television (HDTV) and home entertainment, also playing at

30 fps, but with 752x480 resolution (better than VHS videotape) delivering broadcast-quality video "

"Craig McCaw Sees an Internet in the Sky," Fortune, May 27, 1996

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What is Teledesic and what makes it "so breathtakingly audacious"?

Visit the Teledesic web site (http://www.teledesic.com/) and gain an understanding of "why the

Teledesic Network represents an inherently egalitarian technology."

Some people say this is a silly project, one that will never be successfully completed and

implemented. What are the foundations of their arguments? What is your position ... will it besuccessful?

McCaw says, "you arrive at moments in time when an entrepreneur, a technology, and the needs of

people coincide." That seems to describe what happened when he formed McCaw Cellular:

microprocessor technology had evolved to the point where small cell phones and transmitters made

it economically possible to serve the communication needs of mobile people. Is the Teledesic project

at a similar stage? What are the technologies and what are the needs of people that will be met?

Explain how the Teledesic satellites will differ in operation from most of today's existing satellites.

McCaw conceived Teledesic "as a rural cellular telephony project that would extend the reach of

wireless phone networks." What is his current conceptualization of it? Why did he switch? Do you

think his current model or his original one would have a better chance of success? Why?

The Teledesic homepage indicates that the following opportunities: Building the Teledesic Network

will require a Team of dedicated individuals. We are constantly seeking exceptional candidates with

many different skill sets. Although some opportunities exist in business development, marketing,

finance, legal, and administrative, the bulk of our hiring needs are in technical areas. Would you go

to work for them?

This article, as well as more recent articles about Teledesic, indicates that the senior managers at

Teledesic have a vision of solving the world's urban congestion problems. This argument is

presented in the last few paragraphs of page 70, where McCaw describes a Guatemala village

without communications in which people must migrate to cities. He says: "Whenever you add urban

infrastructure, you ultimately destroy everything that came before. It's like dragging the plague

around behind you. The beauty of electronic technology, unlike cars and freeways, is that we can

resolve problems that are completely intractable when you move people physically. Moving

electrons gives us flexibility." Will this Teledesic project really have an impact on such situations?

"Going Digital Means Sharper Boob Tubes," USA Today, Jan. 8, 1997

What are the main differences between digital TV and analog TV?

What is the difference between High Definition TV (HDTV) and digital TV (DTV)?

Broadcasters have been given new spectrum and the freedom to use it as they wish. This article says

they could use it to "broadcast a fantastically sharp, wide-screen picture with six-channel surround

sound" or the same station could "choose to split its signal into five to 15 digital channels that would

look better than current analog channels." Which of the two do you think they will do? If they do the

latter, what does it mean for broadcasters, advertisers, producers of TV video, and for consumers?

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The article says that cable operators will probably go digital and thus be able to start offering 700

channels. What is about "going digital" that allows them to move from today's 50 or so channels to

700 channels?

Is all of this just a dramatic increase in the number of TV channels that the current television

broadcast industry will fight over? Or, will it lead to fundamental changes? If so, changes in what?

"Intercast Brings the Web to TV," PC Magazine, Jan. 21, 1997

What is Intercast?

Is Intercast really going to "change the way we watch television"?

"Technology and the Future of Broadcasting," Web-Star (Internet web site)

"Streaming Media," Boardwatch, December 1997

This article has a good and a bad side. On the good side, it provides a good practical source of

information on the resources needed to set-up and operate an Internet broadcast channel. On the

bad side, it is full of technical jargon. Rather than my asking you questions, you formulate several

questions about topics in the article that need to be clearer in order for you to fully understand the

article.

"Real Revolution," Wired, October 1997

What is a multicasting backbone?

On page 126, the paragraph that begins with "All this could wreak havoc" describes two future

scenarios. Which one do you think is most likely to occur?

At the beginning of page 176, Glaser is quoted saying "Anyone who underestimates the depth of the

transformation already underway will be out of business - or, at the very least, underserving the

assets they are associated with." What is he talking about?

What business is Glaser in? Content, context, and/or infrastructure?

Glasers vision depends upon the growth of bandwidth. When we do get all of the bandwidth

needed to bring out his vision (to send broadcast quality video on the Net), what role will

Progressive Networks play?

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In the middle of page 176, Glaser says that aggregators will be the winners and that the underlying

consumer mechanism for delivering choice will be IP-based. Explain what he means by these two

conjectures.

Could Fuqua be an aggregator? If so, what content would it be natural for us to aggregate?

What does Glaser mean when he says (in the middle of page 186) "after the turn of the century,every new TV that is sold will be an IP device"? Why does he believe that will be the case?

What is a "branded nonchannel"?

T February 3 Digital Television

"Bit by Bit, PCs Are Becoming TVs," Wired, August 1995

What does Negroponte mean when he says "dont confuse television with television sets"?

People watch TV side by side in a room, and people use computer networks to interact with others

round the globe. Which is more social?

What is the basic difference between todays TVs and PCs?

What is TVs economic model today?

Why does Negroponte say, "it will look strange tour great-great grandchildren"?

"Broadcasting is Finished," Forbes, October 6, 1997

Why does Hundt believe that "communication is king, and content is only a prince"?

What does Hundt mean when he says "the whole idea of TV is not that you are a couch potato but

that youre as dumb as a potato"?

Why does Hundt believe that "broadcasting is finished"?

"George Gilder's Telecosm: Life After Television, Updated," Forbes ASAP, February 23, 1994

What does Gilder say is driving the "telefuture"? Why?

What is the "law of the microcosm"?

What is the "law of the telecosm"?

What is the Negroponte switch?

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In the sections titled "The Avalanche of Bits" and "Like Feeding Vitamins to a Horse", Gilder describes

the repeated failures of many firms to make money on broadband systems. What reason does he

give for these failures?

What does Gilder mean when he says (on page 100) "In the computer industry, all the surprises tend

to come on the upside"? Why is this important?

Why does Gilder believe that "the new technologies are targeted at Hollywood"?

Gilder says that the video business will increasingly resemble not the current film business but the

book business. What does he mean and why does he believe it?

What does Gilder mean when he says "Computer networks give every hacker the creative potential

of a factory tycoon of the industrial era and the communications power of a TV magnate of the

broadcasting era"? Do you agree?

On the bottom of the first column of page 103, Gilder lists 10 key advances needed for the teleputer.

This article was published in February 1994 and thus written in late 1993. In the 4 years since then,

how many of these 10 advances have been made?

"HDTV: What's Wrong with this Picture," Wired, Premiere Issue, 1993

Why does Negroponte believe that the US "blew it" by "rooting our thinking in high definition"?

What reasons does he give for our being optimistic?

"Object-Oriented Television," Wired July 1996

What is object-oriented television?

What is "real virtuality"?

Why is he a proponent of object-oriented television?

"The End of TV As We Know It," Fortune, Dec. 23, 1996

How did Bill Gates ruin everything for the people who had worked for years on HDTV?

Near the end of page 60, the author says: "Even now the networks continue to hemorrhage viewers:

NBC came in first last season with a Nielsen rating of 11.7 -- a 40% drop from the numbers CBS

enjoyed when it was on top 20 years ago." What has caused this drop?

How much longer will we use the word "broadcasting" and what will replace it.

Do you think it is true that people really want their TV to act like a PC? Isn't this silly? Don't most

people, at least in America, want to flop down in front of one of their 3.4 TV sets, select a channel to

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watch, and be entertained? Haven't all the trials of interactive TV shown that people just do not

want to interact with a television?

When this article was published, WebTV was just coming onto the market. What has happened to it,

and what is its l ikely future?

On page 68, Harry Motoro, CNN's vice president, says, "We're actually better off in a 5,000-channeluniverse. Even more will people want someone who's accurate and timely." Do you believe CNN will

be better off in that 5,000-channel universe, or in today's 50-channel universe?

F February 6 Intranet and Knowledge Management

Ford Motor Company: Maximizing the Business Value of Web Technologies (HBS Case 9-198-006)

What was the role of Ford 2000 in the rapid growth of the Ford Web?

What is the difference between Fords intranet and the Ford Web?

Why were the Web applications so successful so soon at Ford?

What were the challenges and hurdles involved in connecting suppliers?

What was done to overcome these hurdles?

Why was it so important to connect suppliers to the Ford Web?

What is Ford doing to manage Web content?

Which aspects of their efforts do you think are good and which ones are bad?

Ford is considering a move to Network Computers (NC). What do you think of this approach to

desktop computing in a corporation such as Ford?

The case closes with Derwa observing that although the Ford Web has grown exponentially in

content and access, it has to be managed well. What do you think of his observations and

conclusions?

KPMG Peat Marwick U.S.: One Giant Brain (HBS Case 9-397-108)

Page 5 of the case tells us that 1) the objective is this new initiative is to "give KPMG professionals

ubiquitous access to the firms brain trust", 2) "KPMGs real asset was the knowledge that

resided with each of the firms professionals", and 3) "it was imperative that the firm effectively

manage and share knowledge in order to provide the best possible service to its clients." Consider

one of the organizations you have worked in. What would have been the impediments to such a

knowledge sharing initiative in that organization?

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Exhibit 4 shows us the components of the technical architecture that underlies KWeb. We can see

that materials are available in numerical form (in the Data Warehouse), multimedia format, HTML

web pages, and Pointcast documents for "pushing" onto the client computers. An obvious question

concerns the on-going processes for feeding and updating this "giant brain." Who do you believe will

be the people in KPMG who will actually do this work?

The role of a "knowledge master" is defined on page 11. Such a person had to have a high level of

expertise in subject matter and domain. We can see that this person is going to have to put his/her

knowledge into the knowledge management system. Do you think experts will be reluctant to give

up their knowledge in this manner?

Answer the question in the next the last sentence on page 11.

Answer the questions in the paragraph on page 12 that starts with "To effectively manage

knowledge"

T February 10 Content

"A Community for Couch Potatoes," Internet World, November 1997

What is ChatTV?

Do you think it will be a big success?

"Newsmaker Q&A: James Murdock," Internet World, October 1997

Each communication medium (TV, radio, magazines, etc.) has its own well-known business model.

But the author says, "the business model is not yet formed" for the Internet. Do you believe there

will be one business model evolve, as has been the case for the other media?

What does Murdock mean when he says "Its the first time in a while in the new-media industry

that you really do have an almost open playing field"?

"Products and Services for Computer Networks," Scientific American, September 1991

According to Negroponte, why are broadband systems inevitable?

One key message of this article is stated on page 102: "The real products and services of the future

will come from imaginative applications of both channel and computing capacity; not from either

alone." Negroponte said, (when this article was written in 1991) "many network products and

services being proposed now are contrived." Can you think of any examples?

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In the first part of page 104, he says, "The more fascinating developments will come from new

services that free you to wander and that crate an electronic surrogate for you on the network with

which others can communicate."" He uses the phrase "will come" but it seems that we have such an

electronic surrogate that we have all been using for a few years. What is it?

On page 106 (in the middle of the right hand column), Negroponte describes an example of

combining a videodisc with an online connection for searching for a home. It is interesting to realize

how far we have come in the few years since this article was written. Visit the John Scott Real Estate

Company (http://www.johnlscott.com/) and do a Home Search; you will see that the system has

already been implemented on the net.

In the right hand column of page 107, he describes a future personalized newspaper. Go to

Microsofts site (http://home.microsoft.com/) that provides a rudimentary form of such a service

and personalize it for you. How far is this site from Negropontes description of a personalized

newspaper?

"Savvy Sassa," Wired, March 1995

The article opens with the following conjecture: "Copyright. Branding. Leverage. These three words

pretty much say it all in the wild and woolly new world of digital-age content." Its easy to see why

copyright takes on a different status in the digital age, but why is branding and leverage so much

more important in the digital age than in the pre-digital age?

Sassa says in his business, the value chain starts with the "creation of good copyrights." I have never

seen that phrase used in the context of an entertainment business. In a company such as Turner

Broadcasting, what does the word "copyright" refer to or mean?

What is the W-cubed concept and do you think it will become the dominant model and the networks

will go away?

Given that networks are losing audiences every year, why are they still a good business?

In the right hand column of page 161, Sassa tells the story of his companys success with the Saved

By the Bell television show. The show only had a 2.5 rating and thus would not succeed on a network

or syndicated to local stations because the rating was so low. But he says that it makes money when

the TBS cable channel (which is on almost every cable system in the U.S. and some non-U.S. systems)

carries it. Why can it be successful for TBS and not in the other venues? What lessons does this

provide for almost all small businesses?

At the end of the article, Sassa says, "there are only so many filmmakers who can make a Citizen

Kane or a Gone With the Wind and capture the imaginations of tens of millions of people." Can you

think of reasons why we could challenge this point?

Apply the concepts of copyright, branding, and leverage to the Fuqua School of Business. What are

or could be our copyrights? How do or should we brand them? How can we leverage them?

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"The City Built on Free Rent," Internet World, January 1998

Using Netscape, go to the geocities web site (http://www.geocities.com) and visit one of their

neighborhoods (but not Wall Street); make sure you explore the Community Leaders section of the

neighborhood. As you examine this site, assume that the Fuqua School of Business wanted to follow

David Bohnetts model and do something similar.

What creative insights do examining and thinking about this site (and reading the article) generate

about a future venture by the Fuqua School of Business?

"The Content is King," Internet World, November 1997

Why is Michael Bloomberg happy when people tell him "The Internet is going to put you out of

business"?

Apply the marketspace model to Bloombergs primary business. What was the model before the

Internet and what will it be after Bloomberg migrates to the Internet?

Bloomberg says "subscription with us, and a little bit with The Wall Street Journal, but does not

seem to for most". Why does it not work for most?

At the end of page 76, Bloomberg says "on the net, every single ad is a direct response. And people

are scared to death of that, because what do you do if nobodys watching? Lots of people in the

food chain would get badly hurt if we could really measure who was watching what." Explain what

he means. Who would get badly hurt? Why?

Bloomberg says his company is different from most information providers, and that because of that

difference he can charge high prices for their content. What makes them different? What lesson can

Fuqua School of Business learn from Bloomberg if we decide to broaden our service beyond paid

education?

"The Last Broadcast is a First: The Making of a Digital Feature," Videomaker, November 1997

Visit a web page associated with this movie (http://www.dvlive.com/theater/video.html). If you

have a suitable computer and plug-ins, download some of the short videos from or about the movie.

This movie was made with low cost equipment, used a lot of volunteers, and had a budget less than

$1,000. Obviously, this movie is not of the quality of todays major movies or even the minor

movies. So, what is the future of such effort? Is there a viable target market for such efforts?

Sassa, in the "Savvy Sassa" article, says that there is major shortage of movie-making talent. If we

accept his statement, then it is useless for people like Weiler and Avalos to even try, is it not?

F February 13 Examination & Changing Nature of Work

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Examination

"Computers, Networks, and the Corporation," Scientific American, Special Issue: The Computer in

the 21st Century

T February 17 Advertising and Electronic Commerce

"Advertising Webonomics 101," Wired, February, 1996

What is webonomics?

Who are the four main groups setting the digital landscape? What are their motivations?

About a year ago I had a late night debate with a marketing professor at another university who said

that we could easily understand the Internet by applying stand economic models. For instance,

assume the consumers reason for using the Internet is to acquire information,

assume the value on the information to the consumer and the cost of searching and acquiring that

information,

Equate marginal cost with marginal revenue and derive the price consumers should be willing to pay

for Internet access.

What does webonomics teach us about the applicability of this professors argument?

What are the five principles of webonomics and why are they true (or believed to be true by the

author)?

Do you think micropayments have a big future on the net?

We do not see many email links on large corporate web sites. Why?

Do you believe "the most important things the web can deliver is a fully qualified lead or customer"?

How do you "turn a site into an online focus group"?

Is the ultimate goal of marketers to make the web like TV?

"Reclaim the Deadzone," Wired, December, 1996

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The net has an "information wants to be free culture" created by a situation of abundant supply of

redundant content (at o charge and on nearly every conceivable subject) that outruns demand.

Given that situation, why are so many business people claiming that the web is doomed if we dont

find a way to pay for all the content? Will all the content providers leave the net if they cannot make

money?

What are the steps that the author believes advertisers can take to improve their fortunes.

Why will todays banner ads not generate the revenue necessary to support a content provider

such as Wired or USA Today?

What is the purpose of todays banner ad: an invitation to link to the advertisers web site or a

place to create a vivid brand experience? Visit a few banner ads at Pathfinder, Wired, Yahoo, etc.

before answering.

Advertisers such as P&G only want to pay for the number of people who "click through" a banner ad

and not pay for people who only view or are exposed to the ad. If this practice becomes wide

spread, what impact will it have on the future of banner ads?

The author believes that "infotainment providers can restore the belief that real advertising can be

done on their sites." What is his prescription and do you believe it will work?

What are brand modules, and how do they differ from todays typical corporate web site?

What is cobranding?

"The Birth of Digital Commerce," Fortune, December 9, 1996

What is SET?

Do you think that electronic commerce has a limited future because the majority of people are never

going to send their credit card number over the Internet?

What is a Digital ID?

What is a microtransaction and what is its likely future?

"It's! Not! Retail!" Wired, November 1997

Visit the Shoppers Advantage web site (http://www.cuc.com/ctg/cgi-bin/SAShoppers/), where you

will find that the company does not have an online catalog. Why do you think they have been so

slow to do business on the Internet, as opposed to using online services such as AOL? The company

seems to have an online shopping service that is reachable via the web page. Why do you think they

have developed yet another online service, one that seems to compete with Shoppers Advantage?

On page 221, the author describes 1997 describes HFS practice of buying companies that have

franchises (Avis, ERA,) and then selling most of the real assets. "Wall Street loved the concept:

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own computer networks, customer data, and brand names." Apply the marketspace model to this

companys business strategy.

Page 222 contains a description of the merger of HFS and CUC, along with the business model that

underlies the merger. Although the company has 50,000 employees, would it be correct to describe

it as a virtual company as opposed to a traditional company? Explain.

When we examine the logic behind Cendant Corp. and the FedEx strategy, are we seeing the future

of electronic retailing: nothing but brand names, computer networks, consumer databases, and

delivery systems? What is the future role of shopping malls and other physical retail outlets?

Why will the Internet "not be an entrepreneurs haven"?

On page 287, we are told that CUC is trying to "switch its existing telephone members to switch over

to its Web or AOL services. Online shoppers, CUC has found, buy as much as three times more than

traditional members." Why do you think this is true?

Forbes Magazine recently had a cover story about the glowing future of REIT funds, which are similar

to mutual funds, which buy real estate instead of stocks and bonds. If Walter Forbes vision of the

future of retailing comes true, what are the implications for REIT funds?