Some technologies have changed the world — the steam engine, electric light, the automobile, and the airplane — and information technology (including television, radio, computers, and the World Wide Web) would certainly rank high among them.
Charles Kreitzberg, founder of Cognetics on Everett Drive (http://www.cognetics.com ) and columnist for Internet Week, predicts that the Internet will have a profound effect on Congress: "Millions of dollars will be made and lost in the next decade. It is going to link services and consumers. It will affect the value chain in significant kinds of ways."
He spoke at a Princeton Chamber continuing education seminar held last month at DeVry Institute, along with Mark Meara of Princeton Internet Group, Michael O’Hara of Packet Publications, and Arthur Zysk of New Jersey Internet, an Internet service provider with dial-up access in Princeton.
Kreitzberg’s firm provides strategic consulting services, design and production of software interfaces based upon human cognition to increase user efficiency. He told how the Internet’s predecessor, ArpaNet, was configured in 1966 as a preventive measure against computer destruction by atomic warfare. The Internet started in its most basic form in 1969, and TCP/IP protocol was developed in 1974. The first documented E-mail was sent (by none other than Queen Elizabeth) in 1976. In 1984, domain name servers replaced the unwieldy numbers, and in 1991 the World Wide Web was born. "And by 1994, Pizza Hut was online."
Kreitzberg worked on one of the very first browsers, called Hyperties, which found its way to Tim Berners Lee in Switzerland. "And that was the model for browsers used today," said Kreitzberg.
From four sites in 1969, the World Wide Web went to 2,215,000 sites in 1998, as estimated by CyberAtlas. In 1997, 50 million people in the United States surfed the Web two or three times a week, and this accounts for 27 million households. Globally, there were 100 million people, and by the Year 2000 it is predicted that there will be 200 million users. "That it works at all is amazing," says Kreitzberg.
The demographics are attractive to businesses, because 42 percent make $50,000 or above, and 18 percent have had post graduate education. About 45 percent of users are over 40, and 45 percent are women.
"Any time technology changes the demography of who is using it, it will fuel growth, because new ways are found to use it," says Meara. Meara’s Princeton Internet Group has, in a very short time, grown to 19 employees and revenues of more than $2 million http://www.pingsite.com . It does strategic internet consulting, web site design, development, and hosting, software application development, network consulting, and multimedia design.
Meara pointed out that the Internet and the World Wide Web are terms often used interchangeably, but incorrectly. "The Internet is an infrastructure like the telephone system and the highway system. It has various applications: phone, fax, credit cards, commuting, trucking. The World Wide Web is one of the applications, E-mail is another, and intranets are another. You can bet your bottom dollar they won’t be the only applications." The Web is hot, said Meara, because:
It is moving faster than any other technology in the history of mankind.
It has companies like Microsoft pushing dollars into it.
It has a level playing field for entrepreneurs.
It excites the investment community — Netscape went from $23 to $72 its first day.
It reaches global new markets, creating true international commerce.
It has an emerging wired culture .
It rapidly overcomes barriers of bandwidth enhancement which expands types of applications, cost reductions, and improves ease of use
It has increased confidence in security and reliability
And it has had unparalleled growth .
"Learn by doing," advises Meara. "Like buying a PC, you have to jump in sometime." And "Don’t overplan — it’s changing too fast. And get started now. Start incrementally. Seek to invent new business models. Position for imminent change. Be responsive to the market."
Developments to watch include Web TV (a modem with the TV for a computer screen solves the computer phobia problem and provides an E-mail address), screaming live video (now on three-minute delay, soon to be in real time), and the ability to listen to an across-the-continent radio broadcast via your Internet connection.
"Your company is conspicuous by its absence on the Net," warns Michael O’Hara of the Packet. "It will cost you marketshare and equity." He says that the newspaper chain’s Internet endeavors accounted for 30 percent of the company’s pretax profit last year.
But even though readers consult newspapers on line, he says, "90 percent of the people don’t read behind the first paragraph abstract of the story — but they might print it out. We are a tactile society."
Newspapers like it when readers prefer to hold a paper in their hands. But papers can be lost. Know that if you lose this copy of this story, you can go to U.S. 1 Newspaper’s World Wide Web site, http://www.princetoninfo.com
and search on the names of any of the presenters. The story should pop right up.
— Barbara Fox
#h#Prime User: Dow Jones#/h#
When casting a net for success stories on any particular topic, one most often thinks of small, entrepreneurial firms. But when it comes to the World Wide Web some of the biggest firms have had the most obvious success.
Take Dow Jones, with its Princeton campus on Route 1 North. Its Wall Street Journal Interactive Edition (http://wsj.com ) grew in two years to become the largest paid-subscription site on the Web, and Dow Jones Interactive (http://djinteractive.com ) is considered the world’s most comprehensive business intelligence service for corporations.
Dorothea Coccoli Palsho, president of Dow Jones Interactive Publishing, was one of six industry leaders to appear on Thursday, May 21, before the "Doing Business Online" hearing for the House Subcommittee on Telecommunications, Trade, and Consumer Protection in Washington. She testified on her business model of charging for information on the Web.
She was in good company: also testifying were Robert Davis, president and CEO of Lycos; William McKiernan, president and CEO of Cybersource Corp; Stratton Sclavos, president and CIO of VeriSign; Andrew Parkinson, president, CEO, and co-founder of Peapod, and Karl Salnoske, IBM’s vice president of global electronic commerce.
#h#Academics on the ‘Net: Princeton University#/h#
Another major employer using the Internet for its business is Princeton University. They don’t call it Home Pages for Dummies, but the university has a software program and a help desk that makes it as easy as possible for faculty members to put their courses online.
Serge Goldstein, George Fleming, and Wendy Chung wrote an automated course home pagebuilder called CourseWare. Chung recruited nine graduate students for a team that makes "office visits" to faculty offices to help instructors with the more complicated operations, such as linking to other sites and scanning material or arranging for it to be scanned.
Now instead of sending a syllabus or the handouts to the printer, professors just put them up on the Web, perhaps complete with links to maps, sound bites, and audio.
Just who owns the rights to these courses has been controversial, but the New Media Center neatly sidesteps that question. "We give faculty members the ability to make their Web pages totally open to the world or open to Princeton only," says David Herrington, manager of the New Media Center. The university’s Web server refuses to deliver the private pages to requests outside the university (http://www.princeton.edu ).
#h#ITXC Internet Phones#/h#
Not big yet, but getting there, is ITXC, Internet Telephony Exchange Carrier, which provides Internet telephony services http://www.itxc.com ). Founded by AT&T expatriate Tom Evslin, and originally funded by AT&T, ITXC started out at the home of Tom and Mary Evslin but is now located on North Center Drive in North Brunswick (U.S. 1, September 17, 1997).
"IP telephony is the first Internet application for people who don’t have or aren’t using computers," says Tom Evslin. "It will quickly grow from an important way to lower the cost of communication to the foundation for rich communications services not possible on the traditional telephone network."
ITXC walked away with the most prestigious of the prizes awarded at the New Jersey Venture Fair last week (Wednesday, May 20), winning the "Most Likely to Succeed" designation. "We felt it to be very productive in terms of networking, feedback, and news on our new industry," says Barbara Callaway, spokesperson for ITXC.
ITXC aims to provide behind-the-scenes interexchange services to Internet service providers (ISPs) and telephone companies and could provide a complete data and voice communication alternative to AT&T’s current network.
Earlier this month ITXC harvested $10 million in venture capital financing from six companies to fund the buildout of its domestic IP telephony facilities, further development of its international network, and marketing activities worldwide.
ITXC is using VocalTec Communications products for its gateways, and VocalTec’s chairman and CEO, Elon Ganor, is now represented on the board. Other funders with board slots are Flatiron Partners and Spectrum Equity Investors, and the other three investors are Intel Corporation, Chase Capital Partners, and Polaris Ltd.
By June ITXC’s WWeXchange service will be use the Internet to provide call termination in nearly 30 international locations. In April it started offering paid service for calls from Moscow, Shanghai, and Sao Paolo being routed over the Internet for termination to any phone in the United States and, by combining services with traditional public networks, to any phone anywhere in the world.
Evslin predicts that ITXC will successfully combine telephony and Internet networks in five years using a single, seamless IP network that will support different quality of service level guarantees. Instead of taking one call and then another call on multiple lines, a business could receive its communications through one always-open line. Evslin says this "persistent connection" would allow firms to use their bandwidth dynamically and take advantage of all sorts of yet to be invented applications.
ITXC is wholesaling such infrastructure services as billing, settlement, switching, high-quality transport, and gateway management. By June ITXC’s WWeXchange service will be use the Internet to provide call termination in nearly 30 international locations. In April it started offering paid service for calls from Moscow, Shanghai, and Sao Paolo being routed over the Internet for termination to any phone in the United States and, by combining services with traditional public networks, to any phone anywhere in the world.
Both Internet Service Providers and entrepreneurs who sell prepaid phone cards are potential ITXC clients. They need only to buy a gateway and meet ITXC’s quality standards. ITXC handles the routing and the billing.
One researcher predicts the internet telephony business to be worth $2.9 billion in the year 20001, "and that represents less than 10 percent of the entire long distance pie," says Callaway. "It’s a huge pie."
ITXC Internet Telephony Exchange Carrier , 219 North Center Drive, North Brunswick 08902. Tom Evslin, CEO. 732-940-4333; fax, 732-940-4334. E-mail: firstname.lastname@example.org. Home page: http://www.itxc.com.
#h#Verio: ISP News#/h#
Is Verio lining up at the door of ITXC to offer Internet telephone calls? No, but the company that started out as Princeton’s local Internet Service Provider has now gone public. Verio Inc. had an initial public offering worth $100 million on May 12 and had also obtained more than $250 million in venture funding earlier this year.
Princeton’s ISP began in 1986 as a powerhouse link between universities provided by the John von Neumann supercomputer center. It was taken private by Sergio Heker, who named it Global Enterprise Services, and bought last year by Verio, which folded it into its nationwide network. (Heker now has a different Internet consulting firm, NextGen.)
GES was just one of the more than 30 Internet providers and related firm acquired by Verio over the last two years. Verio continues to distribute ISP services from its Princeton office at 4390 Route 1. Founded in 1996 and based in Englewood, Colorado, Verio now offers 24-hour help desk service. The stock was underwritten by Saloman Smith Barney, Credit Suisse First Boston, and Donaldson Lufkin & Jenrette; it started trading 5.5 million shares on Nasdaq as VRIO at $23, went up to $29, and is hovering at around $25.
"Internet telephony is not in our immediate future," says Steve Silvers, the Englewood-based spokesperson. "Verio as a full service Internet company will be providing the full range of services available on the internet, but right now our focus is on web hosting, electronic commerce, and security. But as standards are formed and technology advances, we probably will be right at the forefront. Do we have plans to launch telephony services now? No."
Verio Northeast , 4390 Route 1, Princeton 08540. James "Buddy" Cunningham, president, northeast region. 609-514-3800; fax, 609-514-9010. Home page: http://www.verio.net/northeast.
#h#On-Web Learning: Princeton Learning Systems#/h#
In July, 1996, Princeton Learning Systems set up at Princeton Forrestal Village and launched its first site for a paying client. Now the firm has just landed $500,000 to market and develop its stockbroker training courses on the World Wide Web. Its website Financial Systems University (http://www.fsu.org ) is configured to perform all the functions of a virtual campus (U.S. 1, September 4, 1996).
"Until fairly recently the venture capitalists wanted our first born child and most of the company," says Steven Haase, "and we are almost a year behind in product development, but in the fourth quarter we generated significant revenue."
William Healy, president of Princeton Learning Systems, identifies William Mayhall, manager of Skillman-based Rolling Hills Investments LLC and also president and CEO of Princeton Financial Systems, as the investor. Mayhall and his venture capital company were brought to the table by David Nathans, an account representative at PLS.
"We will be focused on developing distribution partnerships with industry leaders who see our product as a value-added solution for their clients," says Healy, who also announced several alliances.
So that anyone can work at home to take courses on the Internet — even those without a computer at home — FSU has just announced an alliance with Kinko’s, which has dedicated Internet access terminals at each of its 880 branch locations. "Kinko’s wanted to get into this market anyway," says Haase, "and they saw us as having a very good handle on at least one industry."
Educational Training Systems, based in Massachusetts, has agreed to add its insurance and securities related courses to the FSU library, and Financial Services Training, based in Los Angeles, will add 16 courses for access within FSU.
A San Jose-based electronic commerce firm, Cybersource, will provide services in credit card authorization and validation, fraud screening of end users, global rights registry for the issuance of electronic keys, and the maintenance of an intellectual rights database.
Donaldson Lufkin Jenrette’s Pershing division provided the first big cash infusion as a joint venture partner and offers it to more than 500 correspondent client firms. Now PaineWebber’s Correspondent Service Corporation offers it more than 120 client firms on a contract basis.
Other clients using FSU as a virtual university for employee training include Morgan Stanley, Scudder Kemper, PaineWebber’s Correspondent Service Corporation, Northern Trust in Chicago, and InterSecurities in Largo, Florida.
Princeton Learning Systems , 116 Village Boulevard, Princeton Forrestal Village, Princeton 08540. William J. Healy PhD, president. 609-734-7447; fax, 609-520-1702. Home page: http://www.fsu.org.
#h#Off-Web Listening: Sycom Technologies#/h#
Miss your favorite radio program? With a $200 unit from a Parkway Avenue firm you can download the program from the World Wide Web and play it while you drive to work.
Sycom Technologies develops and distributes Total Recall digital voice recorders and PC Audio Link software ranging from $20 to $200 (U.S. 1, October 9, 1996), and its latest gadget will work with Audio Highway, a California-based World Wide Web site http://www.audiohighway.com with more than 50,000 audio listings from newspaper articles to soap operas to music. Anyone can download these recordings to a PC but with Sycom’s "ListenUp Player" you can listen to them in your home or car.
The units will be sold at stores in July, but Sycom’s founder, Ari Naim, has lots of other ideas that need money for development. "We are looking for financing to grow that part of our business — the standardizing and creating of our whole spectrum," says Naim. Apparently the judges at last week’s Venture Fair agreed. They awarded him the "Company Most Likely to Go Public" prize.
Before the end of the year the Total Recall digital voice recorders will translate voice to text, says Naim. A 1985 graduate of Drexel. he has 30 employees in Ewing plus has manufacturing arrangements in Hong Kong and South Korea.
He has combined all of Sycom’s core technology for voice recording — compression algorithms, memory management and lots of other features — in one $10 chip that he hopes will be widely used. "By encouraging others to use our coding, we can cross our applications with other products."
Sycom Technologies Inc. , 1239 Parkway Avenue, Ewing 08628. Ari Naim, managing director. 609-530-0200; fax, 609-530-0217. URL: http://www.sycomin.com #h#Princeton Direct to MarkeTech#/h#
You’ve gotten those offers in the mail: Show up at a hotel, get a free dinner, listen to a time-sharing pitch, win a valuable prize, maybe even a car, more likely a cheap radio. But with today’s technology you can hear the pitch and get the reward much faster, says Robert Zyontz of Vaughn Drive-based Princeton Direct.
Zyontz tells of a direct marketing job that involved sending out a client’s electronic brochure on diskette. The diskette user learns of a potential reward on the first screen and then navigates through the required links. "At the end, there is a call to action. Our way of thanking them for going through the diskette is to offer them a choice of four gifts if they respond to ask for more information," says Zyontz.
Zyontz is integrating direct mail with marketing on diskettes and the World Wide Web. He aims to get potential customers to respond and interact with information about his clients in what he calls "a more robust environment." He points out that the Web takes the information load to another level. "On the Web there is no limit to what you can tell about yourself."
To indicate such prowess in E-commerce his 12-year-old firm will change its name on June 1 from Princeton Direct to Princeton MarkeTech. Jeffrey Friedman is partner and director of new media, and Renee Hobbs is vice president and director of creative services.
Founded 12 years ago by Zyontz and Larry Trink, the firm has eight employees and is adding 600 square feet to its offices at 5 Vaughn Drive. (Last year Trink established his own ad agency, Creative Direct, at Constitution Center on Route 130.) "Our business has grown based on our ability to integrate new technologies including interactive multimedia and the Internet with our long-standing marketing and creative capabilities," says Zyontz.
Princeton Direct was a great name 10 or 12 years ago, says Zyontz, "but with the advent of interactive multimedia we needed to have a name that reflected those capabilities. We felt `direct’ might be a little stifling. We polled our clients, and we were finding out that we weren’t getting work we would have gotten had they known we did certain things. Now we are making them aware of what we do. We were one of the first agencies to develop Web sites."
Clients include Unisys, Summit Bank, Beneficial National Bank, HIP Health Plan of New Jersey, Perfect Software, Sermatech International, Thomson Consumer Electronics, Johnson Atelier, and the World Affairs Council of Philadelphia.
Zyontz grew up on the lower East Side of Manhattan, where his father was in the textile business, and majored in journalism at Northeastern University, Class of 1972. He worked at Young & Rubicam, Ogilvie & Mather, and McCann Erickson, and gravitated to direct marketing because it was measurable. "I care about results," says Zyontz. "Every time you use it you learn something."
In 1986 he rebelled against the commute and co-founded his own firm. (Married 23 years, he has two daughters, both attending the University of Maryland.) "The Princeton corridor had the hottest growth in the state, and we wanted to take advantage of the name," says Zyontz. Note that Princeton remains in the name: "It has a cachet, a nice ring to it."
"It’ll really hit us when we hang the sign up," says Zyontz. "It’s a thrill to be here after 12 years. We’re pretty pumped."
Princeton MarkeTech , 5 Vaughn Drive, Princeton 08540. Robert Zyontz, president. 609-520-8575; fax, 609-520-0695. URL: http://www.princetonmarketech.com .
#h#Taking the Plunge: RGB Computers#/h#
Companies can choose from several tiers of E-commerce, depending on size and security needs, says Swapan Nandy, owner of RGB Computers, 20 Nassau Street, Suite 413, 609-683-5510 http://www.rgbcomputer.com). RGB specializes in systems integration and custom database/web page design for small businesses — just that group of companies that are still E-commerce skeptics.
"They aren’t large companies, so they’re afraid to take the risk," Nandy says. "There isn’t any status quo yet on the Internet, no cost analysis ratio that says you’ll gain a fixed-dollar revenue for a certain investment. But small companies are watching what’s happening with big business on the Web. They’re showing a great deal of interest and they realize the advantages are limitless." RGB’s own gross sales have doubled in the past year.
The ideal E-commerce candidates are catalog companies and wholesalers. "You need to sell a product," says Nandy, "or better yet, market several products from different sources. Businesses that provide only services — like doctors or lawyers — don’t fit the profile, but they still need to be present on the World Wide Web."
Nandy, 38, began RGB as a parttime venture from his home in 1995, moving to the Nassau Street location in 1996. With a staff of two and three freelance programmers, RGB designs and constructs E-commerce enabled sites, from domain name to secured payment capability. The cost to construct such a small business site, Nandy says, begins at $3,500 and can be loaded up to $15,000.