The recent deal by @Work to provide "colocation and
exclusive consulting" services to telemarketer K-Tel is a vivid reminder about the
circular and internecine relationships within the Internet and electronic-commerce worlds.
K-Tel, known for its music compilations sold via
direct-response TV, has set its sights (and sites) on the Web -- an initiative that
prompted a doubling of its stock price. By hooking up with @Home's business-services unit,
K-Tel also seemingly secured entry to a prime venue in the broadband shopping mall of its
new cable-modem ally.
The @Work/K-Tel deal was almost obscured during last
month's spate of furious Web-alliance-making, which also saw AT&T WorldNet set up
separate relationships with search-engine rivals Excite
and Lycos. America Online,
meanwhile, reupped its own alliance with Excite. And Netscape
completed a deal with Excite, which itself became a takeover target in the curious efforts
of Zapata Corp.'s buy into the Internet.
Excite's largest rival, Yahoo,
has lined up extensive alliances, including media relationships, which are helping it to
create a "portal" -- a customizable, branded front door to Web news and content.
For some reason, K-Tel's new relationship with @Work called
to mind this past fall's deal in which Amazon.com
became a "preferred anchor" in @Home's e-commerce shopping mall. It's worth
recalling that Amazon.com is also the exclusive bookseller on AOL.com, the Web service of
America Online, which continues to maintain Barnes
and Noble as its exclusive bookseller on the AOL proprietary system.
More recently, Travelocity
became @Home's exclusive travel provider. Travelocity, a unit of American Airlines' Sabre
Group, never found a platform that it didn't like, and it is available Webwide. @Home also
has a content deal with Bloomberg, which, of
course, continues to go about its own Web business. Similarly, @Home's Intuit/BankAmerica deal has not stopped either financial
entity from setting up other Web relationships. @Home points out that all of these deals
consolidate expensive services under one easy-to-use system.
You can't tell the players without a scorecard -- or at
least a good browser.
CNET, eager to move
beyond its computer-oriented content (where it is battling Ziff
Davis on two screens, as well as AOL in cyberspace), continues to push its SNAP
content package to ISPs. And Disney, foundering in its Microsoft
Network "Blast" relationship, is believed to be developing a proprietary
Nope, this Internet business is not about exclusivity.
Of course, the e-commerce vendors -- as the category
suggests -- should be expected to reach customers throughout whatever sites they can find.
But the inbred nature of some of these deals suggests that money is just changing hands
back and forth between the same merchants and operators. So far, that's their problem.
It's the reason why nobody is making money on the Web yet.
However, the fervid deals among infrastructure
organizations -- search engines, transaction processors, portal packagers, etc. -- open
the door to future problems. Most of these alliances are driven by the need to prove
viability and to achieve critical mass in the fickle Internet environment. These sometimes
strange bedfellows and their inbred deals are taking place in the shadow of -- and being
eclipsed by -- the Justice Department duel with Microsoft about Web-browser and desktop
Nonetheless, today's Web content-bundling alliances could
come back to haunt the deal-makers. Some future Rep. Billy Tauzin-like legislator may seek
to force packagers to justify the costs of all of the material that they are jamming into
their services. Will it be considered content that unwantedly contributes to the expense
of a data tier?
The Clinton administration's well-meaning but arbitrary
embargo on Internet regulation may preclude such examinations -- for a while. Eventually,
however, Internet providers and e-commerce dealers will fall under the jurisdiction(s) of
many eager tax-collectors and content czars.
The frenzied deal-making and promiscuous alliances are just
the tip of today's iceberg. The shameless Web opportunists measure their success -- and,
likely, their chances of survival -- by the number of relationships that they can
establish. Cable operators seeking to structure unique packages for their high-speed
customers may find themselves operating counter to an Internet culture that favors
While the proprietary operations of @Home, Road
Runner/MediaOne Express and several independent cable-modem packagers seek to bring unique
content to their customers, the nature of the Internet leads to open accessibility.
Today's deals with the usual suspects may not offer anything that Web users can't get
The packages may become more redundant than unique.
I-Way Patrol columnist Gary Arlen looks forward to seeing
the sites via the new Janet Reno browser.