A Formula for Online Fame & Fortune

Regional Planning Summit

Good Question/ Bad Question

New Year’s Classes

Retail: is Bigger Better?

Ditch Those Disks

Partnerships and More

Asian Hubris

Corrections or additions?

Survival Guide

These articles by Peter J. Mladineo and Barbara Fox were published

in U.S. 1 Newspaper on January 14, 1998. All rights reserved.

Top Of PageA Formula for Online Fame & Fortune

Here’s a Web business model that works: give a bunch

of well-paid Internet naifs the opportunity to talk to each

other and search databases at a free, members-only site. Then get

advertisers interested in selling them everything from drugs,


services, and expensive cars to buy exorbitantly-priced banners. Then,

give it a name that will make it sound like a close cousin to AOL.

This is the strategy of Physicians OnLine — POL. "It is an

online service for doctors," says Steven Zatz, president

and CEO of this Tarrytown, New York-based firm. "It provides


content that ranges from private discussions to access to databases

of medical information and drugs and things like medical newsfeeds,

to help the doctor stay current with colleagues. We also provide ISP

and Web site access."

In a usual day, says Zatz, more than 14,000 different physicians will

access the service. Every month, the website attracts an average of

50,000 doctors who spend between seven and eight hours there. And,

Zatz adds, the company has grown 20-fold in the last 30 months.

Zatz, a 41-year-old internist with an MD from Cornell University


of ’85) and an undergraduate degree from Yale University (Class of

’79), speaks at the Venture Association of New Jersey’s program,


Commerce: Real Profits through Virtual Communities," on Tuesday,

January 20, at 11:30 a.m. at the Governor Morris Hotel in Morristown.

Cost: $55. Call 201-267-4200. Also speaking: Arthur G.


manager of the New York office of McKinsey & Company; and John

E. Burget, senior advisor of investment banking with Bentley


Physicians OnLine actually has two locations; www.po.com is

the commercial website; while members visit www.pol.net for

the bulk of its resources.

It is one of the few Web ventures that are flourishing at a time when

many are failing to justify their livelihood. Zatz describes the


"There is a view that one of the real opportunities on the Web

is to identify very well-defined communities and to serve those


I think that is a very sensible strategy — to try to understand

the business needs of business professionals, particularly to serve

the needs of those who want to come in contact with them.

At POL, advertisers like Pfizer, Mercedes, or Fidelity spend upwards

of $20,000 a month to post banners in a medium that’s open only to

doctors or medical students. "On a CPM (cost per thousand) basis,

it’s going to be higher than most, but the effective CPM is more,"

Zatz says. "It’s a highly targeted medium."

Like AOL, POL targets an audience of Internet novices, and Zatz


most of its 95 employees work in customer service. "A lot of our

members have never been online," he says. "You’d be surprised

by the amount of hand-holding it can take; particularly for a


that traditionally hasn’t been very technical. Physicians for the

most part are not heavy computer users. It’s pretty rare for the


to use a computer in the course of the day. We think one of the great

advantages we’ve had is a customer service unit that can help them

get online and answer their questions like, `What is Yahoo?’"

Another AOL similarity is that POL’s marketing strategy combines


advertising with other paid services. While POL doesn’t charge


fees, it makes money as an ISP, and it also offers intranet services.

This year it plans to start developing a prescription fulfillment

system as well. "Our view of the business of POL is to try to

take advantage of a number of opportunities to generate revenue based

on the community we’ve put together."

Its numbers show that POL succeeds in attracting this body of users.

"Most professionals want contact with some of their colleagues

and they don’t get it either face to face or on the phone" he

says. "It’s changed the way doctors get advice. It’s very hard

to contact other physicians to share advice and experience. We really

think it has revolutionized how physicians communicate."

For instance, POL’s E-mail capabilities have been a big hit with


— the company did not expect this. "You need to really to

understand what your audience wants and not imagine," says Zatz.

"You can be surprised thinking `I’m sure the audience wants this’

and it turns out that it’s not something that gets much traffic. What

you’re trying to do is understand the community, understand its


limitations, and understand how to make money having assembled that


Zatz adds that the POL business model — getting wealthy


to attract wealthy advertisers and take it from there — could

easily be applied to other professions. "Whether they’re


of engineers, communities of architects, communities of lawyers, I

think there are other opportunities to look at the profession, to

look at how dollars in that profession that could be spent more


and I think you’ll see more professional business communities in the

next year or two."

In 1998 Zatz hopes to continue hosting dinner meetings or symposia

and other "live" online events, as well as developing the

online prescription service, which could tap into a market that


sees 2.5 million transactions a year. "There are number of


to move those prescriptions electronically," says Zatz. "I

don’t think the adoption curve there is going to be very rapid but

I think the long-term opportunity is a very large one."

He also hopes to expand the service to patients. "At a single

time on our service we can have as many as 1,300 or 1,400 physicians

online at the same moment," he says. "I think it’s going to

be very popular among patients."

But although some of its advertisers are non-medical in nature, don’t

expect Physician’s OnLine to stray from cybermedicine. "We’re

in the healthcare field and it think it’s highly unlikely, that we’ll

branch out, at least for the near future," says Zatz.


is unusual because of what a large chunk of our economy it takes


l1H &l4H &l6H &l2H &l1H š @head 14 = Web for Patients

Blue Cross Blue Shield of New Jersey is now not only

giving patients a directory of physicians, but it gives them


to their offices. The New Jersey health insurer’s corporate site,

http://www.bcbsnj.com, has street maps and detailed

directions to physician offices, among several new features.

The site was started in 1996 and initially listed names and addresses

of doctors who participated in either HMO Blue or Blue Choice managed

care plans. It was expanded in the fall of 1997 to include physicians

who participated in the Blue Cross Blue Shield’s traditional plans,

as well as HMO Blue Prime, Blue Choice Prime, and Medicare Blue.

The site has also been updated to allow users to seek out


doctors close to their home or workplace, and provides a good online

mapping system developed by Etak. Other new features include job


a calendar of events and promotions sponsored by BCBSNJ, and a nifty

suggestion box that allows users to rate the site and offer general


Top Of PageRegional Planning Summit

Regardless of who first said "united we stand,


we fall," in the Princeton area this aphorism is becoming a mantra

for regional planning proponents like Alan DiSciullo, former

chairman of the West Windsor Township Planning Board.

The current chair of the central section of the New Jersey Planning

Officials, a group that seeks to unite planning organizations,


is trying to organize planning roundtable for mayors, municipal


board chairs, and statewide officials. A regional transportation forum

cosponsored by the NJPO and the Princeton Regional Planning Board

begins Friday, January 16, at 8 p.m. at the Princeton Township


offices at 369 Witherspoon Street. Call 609-924-5366.

The group’s ultimate aim is to provide an information exchange on

issues affecting various municipalities such as traffic conditions

and growth management. The rationale for the group should be


by residents of the greater Princeton area, which has had to deal

with a slew of new commercial and residential developments as well

as new road construction proposals.

Issues likely to be raised at the NJPO meeting could include the


Millstone Bypass linking Route 571 to Route 1 at an overpass near

Harrison Street; Route 92, the Hightstown Bypass, and, as DiSciullo

urges, the rapid growth of underdeveloped communities in central New

Jersey like West Windsor, Plainsboro, South Brunswick, and Montgomery,

that are currently unable to handle the influx of new school children

and more traffic congestion.

When confronted with regional transportation issues especially,


are often forced to act on their own because there’s no collaborative

effort beforehand. "Developers can very easily go into one


or several and wantonly build developments without any


to the municipalities unless the municipalities have ordinances or

growth management in place," he says. "We found in our


in West Windsor that it really requires a regional effort. You’re

going to get economies of scale, it’s really strength in unity, and

the ability to draw on the experience and resources of each of these

municipalities. In short, you really have to get support."

The list of invitees to the transportation forum includes planning

representatives from Princeton, Ewing, Middlesex County, Franklin

Township, Washington Township, Hunterdon County, Montgomery, West

Windsor, Hopewell, Rocky Hill, Hamilton, East Amwell, New Brunswick,

Pennington, Somerset County, North Brunswick, Lambertville, East


Plainsboro, Cranbury, South Brunswick, Hillsborough, Trenton,


Mercer County, the MSM Regional Council, the DOT, and the New Jersey

State Planning Board.

DiSciullo explains that it’s the fourth such meeting of its kind (the

first was in June, 1996), but emphasizes that this meeting should

an expansion of the group’s agenda. "We’re hoping to formalize

this into a working group," he says.

Top Of PageGood Question/ Bad Question

Okay, so you’ve written your employee manual, you’ve

made the personnel file, you’ve drawn up the policy on sexual


you’ve given the feedback, you’ve even bought the employment practice

liability insurance to protect you should you accidentally fire


for the wrong reasons. What else should you do?

Standardize the interview process, says Frederic Schragger,

an attorney, who reports that one of the easiest ways to avoid a


suit is to make sure that you ask the same questions to all


employees. "You want to be consistent with each interviewee that

you interview for the same position," he says. "Ask the


that you’re permitted to ask and don’t ask the question that becomes

a problem: age, family, married, physical condition."

Schragger and Cara Verba, manager of employment at Princeton

Financial Systems, address the Princeton Chamber on "The Right

Way to Manage Your Employee Relations: The Techniques and Legalities

of Hiring, Evaluating, and Firing Employees" on Wednesday, January

21, at 7:45 a.m. at the Holiday Inn on Route 1. Cost: $17. Call


Schragger, who practices employment law at 3131 Princeton Pike along

with his son Andrew Schragger, frequently is asked which


can be asked job prospects during interviews. As a rule of thumb,

he says, employers are allowed to inquire about prior work history,

availability, and work experience; they are also allowed to ask for

references. Outside of that is the ever-expansive gray area, full

of legal uncertainty and a lot of work for attorneys like Schragger.

Here are some sample questions from that gray area:

Do you work out? This question may be germane to someone

who’s applying to work at health club but not for someone who wants

to work as a secretary or as a retail clerk. Instead, phrase it this

way: "Tell me about yourself, tell me about your work


says Schragger.

Are you a Redskins fan? This inquiry doesn’t necessarily

violate the law and could be useful in deciphering an applicant’s

personality. But a better route around the "that’s not


objection is to let the applicant somehow lead into their football

preferences without being prompted. Again, start with "tell me

about yourself" and let them tell you they’re a football fan —

or a biker or a hip-hop head or whatever — first.

What did your parents do for a living? This query is


than gray. While there’s nothing blatantly wrong with it, Schragger

says that its tone leans against the spirit of the law. "I’m not

sure it’s objectionable but I don’t think I would ask it," he

says. "I ask the question, `Tell me about your family.’ `Tell

me about yourself’ is a better question."

Do you have any disabilities that would hamper your work?

This is obvious suit bait, but interestingly enough, a simple


of the question would get the job done without attracting lawyers.

Schragger’s suggested alternative: "Is there anything in your

family relating to you or your health that would not make you


to do this job 52 weeks a year, subject to the fact that we all get

the flu? I think it’s a proper question. It goes to their availability

to do that job."

Most of the time, a well-phrased question will elicit the


you are looking for anyway. "It’s the method of how you handle

the interview and how the person you interviewing handles the


says Schragger.

Top Of PageNew Year’s Classes

How to get your company to send you to a continuing

education class:


Show the brochure.

Stress the benefits.

Emphasize the convenience.

Compare the competitive pricing.

Direct from the brochure of Mercer County College’s corporate

and community programs division, these tips serve to buttress your

determination to "improve yourself" this spring. Instead of

taking just a sprinkling of courses here and there, think about a

series of sessions that will lead to a certificate, and perhaps a

new job title.

MCCC certificate programs are available in business communication,

child care career development, construction project management,


management, leadership, management and supervisory skills, and

training. New this semester at Mercer are certificates that can lead

to jobs as a travel agent or a fiber optic technician.

In collaboration with AAA Central-West Jersey, Mercer offers seven

courses from February 3 to June 30. All but three of the courses are

scheduled on Tuesdays from 6 to 9:30 p.m., and cost $45 for two


(The computer reservation system workshops are held all-day on


in June.) Topics: air travel; hotels, motels & resorts; land and sea

travel; customer service and selling, and travel geography. If you

complete all seven courses you receive a certificate. Call Yvonne

Chang at 609-586-9446, extension 3278.

Even if you don’t aim to install or repair fiber optic cable yourself

— you merely want to sell it — you can benefit from learning

how light transfers through optical fiber and all about bandwidth,

gain and loss, types of connectors and splices, laser and led sources,

diode detectors, and calculation relative to power budget. Three


in the fiber optic technicians series meet on Thursdays from 6 to

10 p.m. starting May 14, and each costs $205. To get a certificate

for this series you will have to pass a test. Call Dominick


at 609-586-4800, extension 3456.

Another hot job for 1998 is webmaster. MCCC has contracted its


certification program to Princeton Internet Group (PInG). The 21-hour

course meets on Tuesday and Thursday evenings, 6 to 9:30 p.m., costs

$2,250, and includes Web page design, HTML programming, content


Web application programming, and Web server administration. Though

it is fully enrolled for the session starting February 3,


may be available.

Less intense courses on the Internet are also available. Mercer offers

Monday night introduction to the World Wide Web, two three-hour


for $78 including lab fees. Princeton Adult School has five-week


on Tuesday evenings, 6 to 7:30 p.m., for $45. The class is taught

by Peter Mazzei, information technology coordinator for the

New Jersey State Legislature, Office of Legislative Services. Both

classes go so far as to teach you how to create a Web page.

Also at Princeton Adult School, choose from two introductions to


95. Alan Goldberg (senior software support specialist for


University) teaches a six-week course starting Thursday, February

5, $50; and James C. Roberson (president of JCR Associates in

Barnegat Light) teaches an eight-week course on Tuesday, February

3, $60.

To learn at your own speed, sign up for courses developed by Ziff

Davis Education, channeled through Mercer County College. Check out

http://corp.learnitonline.com but register by February 9. For

$49 you can take as many courses as you want from February 13 to May

13. All the software and materials are on-line — you do not need

to own the software package that you are learning. If you get stuck,

you can visit the Mercer campus to ask questions in person.

Can’t stand sitting at the computer for one more moment? Take a course

in effective speaking and presentation, "Stand Up and Speak


The Princeton Adult School instructor, George Scherer, has his

own firm (Scherer Educational Services), and is past president of

Princeton Toastmasters and a member of the International Platform

Association. He offers to videotape your presentations to focus on

specific areas of self improvement. The eight-week course starts


February 3, 7:30 p.m., and costs $45. Scherer follows that up with

two sessions on "how to be funny" starting Tuesday, March

31, at 7 p.m., $35. "Plenty of opportunities to participate,"

he promises, "or you can just sit back and enjoy yourself."

For information on Princeton Adult School call 609-683-1101. For


County College’s noncredit courses, call 609-586-9446.

Top Of PageRetail: is Bigger Better?

In MTV’s cult cartoon "Beavis & Butthead," the

dull-witted redneck Anderson leaves Beavis and Butthead alone in his

yard to build his pool while he goes off to a Home Depot-like


(Home Labyrinth) to look for Spanish tiles. Anderson has no luck at

finding them and haplessly scours the aisles until long after the

store closes. Meanwhile the two miscreants are left with the


to trash his property with the help of a backhoe, a hose, and mondo

bags of concrete.

In its inimitable fashion, the cartoon is critiquing the retail


tendency towards aggressive expansion plans. Experts aren’t far behind

in this belief. Amid the news that Target, the country’s third largest

discount retailer after Wal-Mart is planning to open a new megastore

in the as-yet-unbuilt Nassau Park Pavilion as well as five other


in New Jersey and eastern Pennsylvania, a report by Barry M.


a national director of Ernst & Young’s New York City office, and


Shipley, a senior manager of an Ernst & Young real estate group

in Orange County, California, questions the need to expand so large

so fast.

It notes that several large grocery retailers and chains like Toys

`R’ Us and K-mart are reducing the size of new stores and suggests

that other retailers should heed their example. Why? "The risks

of shifting to larger formats are enormous in the current environment:

costs can rise with no guarantee that sales will follow. Leases too,

can become burdensome. In general, the larger the format, the longer

the required lease term."

The report also notes a few disproportions that could conspire to

undermine the mega-store boom. While the number of square


of retail real estate has increased in the last 10 years, it says,

sales per square foot in nearly all retail categories has dropped

over the same time period. Another irony: the Babyboomer generation,

America’s largest demographic group, has reached its prime spending

years but is beginning to divert its income from the retail sector

to health care and retirement preparation, because of its advancing

age (33 to 52).

The report advises retailers considering the move to the mega-location

to make sure they have ample justification. Ernst & Young highlights

several factors why stores shouldn’t make the move to an outlet of

the labyrinthian sort:

Customers have not requested a bigger store. The report

suggests using surveys or focus groups to get the customers’


The store’s supply chain is inefficient. Problems in


stocks could have little to do with the size of the store, says the

report. The products customers are requesting might be sitting in

the back rooms unpriced.

Existing stores aren’t laid out properly. Forty percent

of the retailers in an Ernst & Young survey said that sales would

increase if the layouts of the stores were changed. This is a lot

cheaper than garnering new real estate, the report adds.

Long checkout lines are not really hurting the business.

If long waits are really turning customers away, then an expansion

may be in order. But in many cases, long lines aren’t oppressive


to hurt sales.

The parking lot is not always full. Even if it is, this

by itself should not necessarily justify a move. "If it’s a


location," says the report, "the worst that can happen is

the parking lot gets a little crowded."

The bottom line is, for retailers, a move to another location

is always a risk. "Rapid format changes and continued mergers

have increased the number of dark stores," says the report.


a consequence, opportunities may exist for retailers to partner with

property owners to upgrade old or underperforming sites."

Not every store has the potential to become the next Wal-Mart or Home

Depot, the report adds. "These retailers have flourished were

others have in failed in part because of their unique situations.

Wal-Mart, for instance, is one of the few retailers with true market


Top Of PageDitch Those Disks

Here’s a way to stanch the flood of 3 1/2-inch AOL


into your office. An innovative program called "Floppies for


accepts used diskettes from around the country and donates them to

schools that request them. Started by Carol Blake of CityLink,

a Louisiana-based Internet company, this project has already resulted

in the donations of more than 25,000 disks to hundreds of schools

in the United States and other countries.

To donate, enclose any spare diskettes (they don’t have to be AOL),

formatted or unformatted, in a box addressed to USA CityLink Project,

Attention Floppies for Kiddies, 20349 Highway 36, Covington, LA 70433.

For more information, see the project’s website,


Top Of PagePartnerships and More

How would a partnership affect your business? How and

when should you plan to make your exit? If you are the top person

in a two-person firm — or a senior manager at a company that


thousands — you’ll pick up useful information at a conference

staged by the New Jersey Technology Council on Thursday, February

19, at the Marriott.

Dubbed the "New Jersey Capital Conference" it features a


speaker, PNC executive vice president Mike Nelson, who will

discuss "What Kind of Financing is Best for Your Company?"

The conference opens with continental breakfast at 7:30 a.m. and


through lunch with a CFO roundtable from 2 to 4 p.m.

Register soon — at least by February 13 — to be included on

the attendees’ list. Those who are not NJTC members pay $125 in


$150 at the door, including breakfast, lunch, conference materials,

and a 25 percent discount on the just-released New Jersey Financing

Manual. Students with a valid ID may attend free. Call 609-452-1010.

A slew of workshops will address a wide range of needs. At 8:30 a.m.

choose from "Private Equity Sources for Intermediate Stage


with Jim Gunton of Edison Venture Fund, Richard Robbins of

Arthur Andersen, and Gerard DiFiore of Reed Smith Shaw McClay;

or "State and Federal Backed Financing," with Jay


of New Jersey Commission on Science & Technology, Caren Franzini

of New Jersey Economic Development Authority, and Jim Millar

of Early Stage Enterprises.

At 9:30 a.m. learn how to grow your company through mergers,


and recapitalizations, taught by Tim Scott of Price Waterhouse

and James Roberts of PNC Bank; or investigate "debt capital

sources & solutions," with Nat Prentice of BT/Alex Brown,

Dan Conley of Funds for Business + Leasing, and Arthur


of Jefferson Bank.

"How to Finance Roll-Ups" is the 10:30 a.m. topic for Brian

Hughes of Arthur Andersen and Jim Hunter of Janney Montgomery

Scott with "Joint Ventures/Strategic Partnering" with


Thomas of Buchanan Ingersoll as the alternative. At 11:45 a.m.

"Outlook for IPOs" will be discussed by David Sorin of

Buchanan Ingersoll, Mike Mufson of Janney Montgomery Scott,

and Joe Nardini of Freedman Billings Ramsey Co. At 2 p.m.


IPO Experience" is the roundtable for CFOs and financial


Though most of the conference sponsors are represented on the program,

Jefferson Bank, Packard Press, and Princeton Venture Research are

also among the sponsors who will have exhibits in the main room.

Top Of PageAsian Hubris

Every excess is predicated on hubris, and hubris may

indeed be a root cause of the Asian financial crisis. So says Brian

A. Murdock, who will discuss the crisis and its potential effect

on the United States market at a meeting of the International Trade

Network (housed in the law offices of Miller and Mitchell at Research

Park). This ITN meeting will be at the Nassau Club on Tuesday, January

20, at 8:30 a.m. Call 609-921-3322 for $25 reservations.

Murdock — Cornell, Class of 1978 — grew up in Scarsdale, where

his career choice was influenced by his father, an international


who helped emerging multinational firms design benefit plans. In Hong

Kong and on Scudders Mill Road Murdock established and co-managed

Merrill Lynch’s International Portfolio Group. Until 1996 Murdock

had been working on setting up mutual fund companies in the emerging

capital markets in Asia, where MLAM has several joint venture mutual

fund companies. For the past two years he was responsible for


activities, business development, and client relations in the Asia

Pacific region.

After 10 years in Asia — and, as it happened, well before the

crisis — Murdock brought his wife and four children "back

home." He is now first vice president of Merrill Lynch Asset


LP. As director of the trust portfolio group he is in charge of all

portfolio management activity based in MLAM’s 16 regional offices

and all managed trust business for Merrill Lynch Trust Company. For

this interview, and for his January 20 remarks he offers his personal

views, not those of Merrill Lynch.

Murdock declares himself "persistently optimistic" in his

analysis of where the Asian financial dilemma is now, where it will

go, and how it will impact the American economy. "The good news

is that sometimes crisis management facilitates change that otherwise

wouldn’t be achievable," says Murdock. "If this succeeds in

forcing the development of a regulatory infrastructure that would

better support indigenous capital markets to open up their economies

to broader participation — and to enhance Asian standards of


and disclosure — all of that may be worth the price," says


From Murdock’s perspective as a boss — while building mutual fund

companies he employed workers of all nationalities — he saw


this clash between Anglo Saxon and Asian values: "It’s difficult

when you find something objectionable and they don’t even see it as

something wrong."

Some of these values are useful to the economy: "A thrifty,


society that is dedicated to family and education and self improvement

with traditionally high rates of savings and work ethic." But

chief among the troublesome issues is a lack of arm’s length dealing

in business affairs. Banks lent money based on personal associations

rather than on asset value. In almost every Asian country except


says Murdock, "everything is an insider deal."

Of course, says Murdock, inappropriate borrowing and cronyism also

exists in the United States, but in Asia the crisis was magnified

by loans in United States dollars against assets in Asia.

Official response compounded the problems. "Local leaders said

either `we have done nothing wrong’ or `this is a foreign capital

conspiracy to wreck our economy.’ A constructive response rather than

a facesaving response might have mitigated the crisis," says


He foresees these domestic problems:

Share values could decline for multinational companies


earnings will be adversely impacted. "The high multiples were

predicated in part on the expectations that they would have


earnings because of their exposure to a fast growing market."

Competition could stiffen for companies competing in the

U.S. marketplace with foreign suppliers operating with devalued


Consumer confidence could drop when the public sees


dropping for multinational firms and factories laying off workers.

"The good point for the U. S. is that not in memory have we been

a stronger financial position to weather this kind of problem,"

Murdock suggests.

"Countries that didn’t have fully developed business practices

and standards need to make their capital markets and their economies

more user friendly. They had confidence — bordering on hubris

— that Asian values would allow them to do things


says Murdock. "But if they prove the rules are fair, then the

liquidity will come back."

— Barbara Fox

Corrections or additions?

This page is published by PrincetonInfo.com

— the web site for U.S. 1 Newspaper in Princeton, New Jersey.

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