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                            THE STANDARD'S
                          M E D I A  G R O K
            A Commentary on What the Press Is Reporting and Why
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                                        | http://www.thestandard.com |

Monday, June  4, 2001

TOP GROKS:
* Whose Desktop Is It, Anyway?
* Wal-Mart Wants You to Surf Like It's 1999
* Every Net Company Needs a Textbook Publisher

MORE NEWS:
* A Call to Arms
* Microsoft, AOL Go Back and Forth on Windows XP
* UAL Corp. Unit to Acquire Mypoints.com
* Cypress Semi Sees 2nd Quarter Revenue $175M-$185 Million, Below Year-Ago


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TOP GROKS

~~~~~~~~~

Whose Desktop Is It, Anyway?

Over the weekend and today, everybody went high with stories about the
AOL-Microsoft talks. They're off. No, they're back on. You could find
support for any theory you liked, amid all the leaking and the
spinning.

The Washington Post's Saturday story said that the talks had broken
down on Friday, and it outlined some of the possible reasons for the
rift. The paper cited a theory that the sticking point was Microsoft's
desire that AOL make its Instant Messaging service compatible with
Microsoft's. Another version claimed that Microsoft wanted AOL to sign
an exclusive deal to use its Media Player, locking out rival
RealNetworks, the media solution now used by AOL. The Post's reporter
was skeptical of both explanations of why the talks tanked.

Today's stories all noted that the talks had resumed over the weekend.
The Wall Street Journal explored some of the nuances in the giants'
relationship with an explanation of how Microsoft is changing what it
means to be "on the desktop." It seems the company's new Windows XP,
to be released in the fall, will boot up initially without the
familiar scatter of icons on the desktop. Users will be able to add
icons, according to the Journal, but a new program called "the
sweeper" will ask them periodically if they want to remove the less
frequently used ones. Microsoft's detailed control over the user's
experience prompted AOL to tell lawmakers recently that Windows XP is
"anti-innovation, anti-consumer and anti-competitive," according to
the Journal.

Writing in the New York Times, John Markoff updated the story with the
help of his own anonymous sources, who told him that Microsoft had
been "trying to persuade AOL to agree not to lobby against Microsoft
in current or future court battles," but that AOL is "holding open the
possibility of pursuing (antitrust) action" against Microsoft if the
talks break down. No-namers inside AOL told Markoff that the media
giant has grown increasingly concerned of late over Microsoft's
Dot-Net strategy and its plans for Hailstorm, a technology intended to
aggregate consumers' personal information and transactions. Markoff
concluded with a review of the Internet appliance that AOL had once
planned to introduce. Markoff quoted another no-namer who said that
AOL has "backed off on that and decided not to compete and to come in
through the living room instead." - Keith Dawson

Microsoft, AOL Back in Talks on AOL in Windows XP
http://www.thestandard.com/article/0,1902,26858,00.html

Microsoft, AOL Suspend Discussions to Renew Deal
http://www.washtech.com/news/media/10202-1.html

Rivals' Talks on Online Deal Falter; Windows XP May Lack Link to AOL
http://interactive.wsj.com/articles/SB991606402955752823.htm

Microsoft and AOL Discuss Linking Products
http://www.nyt.com/2001/06/04/technology/04SOFT.html

Talks between Microsoft and AOL underway again, software giant says (AP)
http://www.siliconvalley.com/docs/news/svfront/030534.htm

Microsoft, AOL resume Windows XP talks (Reuters)
http://news.cnet.com/news/0-1005-200-6168880.html

Microsoft's new IM takes aim at AOL
http://news.cnet.com/news/0-1003-200-6176378.html

A new song ... and the same old dance
http://www.boston.com/dailyglobe2/155/business/A_new_song_and_the_same_old_dance+.shtml

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Wal-Mart Wants You to Surf Like It's 1999

A number of outlets ran an AP story by Chuck Bartels about Wal-Mart's
much-delayed introduction of its own branded online service. The
offering results from a 1999 partnership with (who else?) AOL. It will
be based on the CompuServe online service, which has long since been
acquired by AOL. Bartels reported that it will be priced below $10 per
month.

Bartels questioned the wisdom of introducing a bargain ISP service at
this point in the tech slump, noting that other "experiments to offer
free or low-cost Internet service have been largely unsuccessful." The
reporter quoted a Gartner analyst who "questioned the buying power of
those consumers that Walmart.com is aiming to reach." A Wal-Mart
spokesman responded with this spectacularly mixed metaphor, "We can't
back off on growth. The ball's on our shoulders."

Wsj.com's Melinda Patterson Grenier compared the planned Wal-Mart
Connect service in detail with its rival Kmart's bluelight.com, which
has offered three-tier Internet service since December 1999. By some
odd coincidence, this is the same month that saw the announcement of
the Wal-Mart-AOL deal. Grenier raised more questions about Wal-Mart's
business model by pointing out that bluelight.com had recently changed
its terms of use to charge users who are not buying anything from the
site. Wal-Mart has no plans for such a tie-in.

SatireWire gets the last word on Wal-Mart Connect. Here's how the
site's brief story sets the scene for the retailing giant's
announcement: "Emerging from the deep, isolated cavern where its
executives apparently have been hibernating for the past two years,
Wal-Mart Friday proudly announced ..." Boy, it's bright out here. -
Keith Dawson

Walmart.com set to offer cheap unlimited Internet access (AP)
http://www.nando.net/technology/story/19821p-339111c.html

Wal-Mart to Offer Low-Cost Web Access As BlueLight.com Extends Its
Access Plan
http://interactive.wsj.com/articles/SB991355964290760596.htm
(Paid subscription required.)

Earth to Wal-Mart ... Retailer Thinks Low-Cost ISP a Good Idea
http://www.satirewire.com/briefs/walmart.shtml

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Every Net Company Needs a Textbook Publisher

Guessing Vivendi Universal's next move in its alleged march to Net
domination could become the next office betting pool. On Friday,
Vivendi - which has already cobbled together a music company, a
Hollywood studio and a Euro digital-TV outfit - forked over $1.7
billion for publisher Houghton Mifflin. What's next? Pick a square:
Women's clothing? How about fast food?

No matter how much Vivendi spends to transmogrify its business into a
Net-age dynamo - and you'll recall it just forked over $372 million
for MP3.com - reporters feel compelled to mention its low-tech past.
Several outlets mentioned that Vivendi has nipped and tucked its way
to 25 acquisitions over the last five years or so. Despite the
cosmetic enhancements, the New York Times noted that Vivendi is
"traditionally a water-treatment company." At least the Washington
Post's Paris-based correspondent explained that it "started out as a
water utility before becoming a multimedia empire." The Los Angeles
Times even invoked its sewer utility past. Ooh, the indignity.

As for Houghton Mifflin, if your response was "Houghton who?" you
weren't alone. Vivendi ponied up $1.7 billion, mostly for Houghton's
textbook business, but in the publisher's hometown of Boston,
newspapers skipped that angle to focus on Houghton's smaller but
historically glam nonfiction division, which brought us everyone from
Mark Twain to James Carroll to that more recent literary coup, "The
Wind Done Gone."

One gloomy Bostonian even wondered whether the sale was somehow an
extension of the Curse of the Bambino. The Red Sox haven't won a World
Series since they traded Babe Ruth to the hated New York Yankees in
1918. Given Wall Street's skepticism over Vivendi's makeover and the
severity of the curse - the BoSox's championship drought is the
league's second longest - Grok wonders whether the French gave this
angle its due.

Reporters didn't, but they turned thumbs-down on the deal anyway,
scratching their heads as to what Vivendi chairman Jean- Marie Messier
was thinking. The juiciest rebuke came from the Guardian, which
knuckle-rapped Messier for "reading from last year's new-economy
script." Enough with the trophy transactions, the Brit daily
tsk-tsked. It's time to "start proving that this extraordinary
corporate entity can actually make substantial profits." In other
words, batter up, Vivendi. Oh, and don't choke. - Deborah Asbrand

Vivendi Universal Will Purchase Houghton Mifflin for $1.7 Billion (Reuters)
http://www.thestandard.com/article/0,1902,26827,00.html

Vivendi to Acquire Houghton Mifflin In a Cash Deal Valued at $1.7 Billion
http://interactive.wsj.com/articles/SB991399666932519014.htm
(Paid subscription required.)

Vivendi Will Acquire Houghton Mifflin for $1.7 Billion
http://www.nytimes.com/2001/06/02/business/02BOOK.html
(Registration required.)

Vivendi to Pay $2.2 Billion For Houghton
http://washingtonpost.com/wp-dyn/articles/A10350-2001Jun1.html

Houghton writes end to a chapter
http://www.globe.com/dailyglobe2/153/nation/Houghton_writes_end_to_a_chapter%2b.shtml

Houghton Mifflin acquired by Vivendi
http://www.boston.com/dailyglobe2/153/business/Houghton_Mifflin_acquired_by_Vivendi+.shtml

Houghton Mifflin is sold
http://www.bostonherald.com/business/business/book06022001.htm

Deal ends Hub chapter in publishing
http://www.bostonherald.com/business/business/last06022001.htm

Vivendi to Buy U.S. Publisher
http://www.latimes.com/business/20010602/t000045927.html

Now for profits from deal-a-month Messier
http://www.guardian.co.uk/business/story/0,3604,500286,00.html

Vivendi buys US education publisher
http://news.bbc.co.uk/hi/english/business/newsid_1366000/1366206.stm

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MORE NEWS AT THESTANDARD.COM
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
A Call to Arms By Kristi Essick The demand for cell phones and
computer chips is helping fuel a bloody civil war in the Democratic
Republic of Congo.
http://www.thestandard.com/article/0,1902,26784,00.html?nl=mg

Microsoft, AOL Go Back and Forth on Windows XP By  Reuters The two
giants are back at the bargaining table after talks broke down late
last week.
http://www.thestandard.com/article/0,1902,26858,00.html?nl=mg

UAL Corp. Unit to Acquire Mypoints.com By  Reuters The Internet
subsidiary of United Airlines offers $113 million for the online
direct-marketing firm.
http://www.thestandard.com/article/0,1902,26860,00.html?nl=mg

Cypress Semi Sees 2nd Quarter Revenue $175M-$185 Million, Below
Year-Ago By  Dow Jones First-quarter revenue at the semiconductor
company was $262 million.
http://www.thestandard.com/article/0,1902,26863,00.html?nl=mg


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MORE LINKS

~~~~~~~~~~

Casualties of a Shakeout
http://washingtonpost.com/wp-dyn/articles/A8834-2001Jun1.html

PSINet Heads to Bankruptcy Court
http://washingtonpost.com/wp-dyn/articles/A10331-2001Jun1.html

Timezone cheats using Net for exams
http://www.thetimes.co.uk/article/0,,2-2001190449,00.html

Analysts Set To Give Bezos The 3rd Degree
http://www.nypost.com/business/31776.htm

Did AnnaK Kill J.Lo Virus?
http://www.wired.com/news/technology/0,1282,44230,00.html

It's liftoff for Orbitz
http://news.cnet.com/news/0-1007-200-6179186.html

Nevada casinos eye their piece of the Net pie
http://www.zdnet.com/zdnn/stories/news/0,4586,5092022,00.html


STAFF
~~~~~
Written by Deborah Asbrand (dasbrand@world.std.com), Michaela
Cavallaro (mcavalla@maine.rr.com),Keith Dawson (dawson@world.std.com),
Jen Muehlbauer (jen@englishmajor.com) and David Sims
(davesims@sonic.net).

Edited by Jimmy Guterman (guterman@vineyard.com).

Copyedited by Jim Duffy (jduffy@thestandard.com).

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