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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 |

Wednesday, June  6, 2001

TOP GROKS:
* Napster Is Dead, Long Live Napster
* Will Lucent Cut From the Middle?
* If It's Wednesday, That Must Be Traveling Music

MORE NEWS:
* Napster Signs With the Major Labels
* Lucent to Ax an Additional 5,000 Jobs
* Amazon Looks Forward to 2002
* Sega to Enter Chinese Game Software Market in June


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TOP GROKS
~~~~~~~~~
Napster Is Dead, Long Live Napster

We haven't heard this much talk of legitimacy since we read "Bastard
Out of Carolina." Napster has signed with MusicNet (the
pay-per-download service to be launched by three of the five major
labels), giving Napster that much-discussed legitimacy at last. That's
good, right? Not if Napster as we know it is already six feet under,
said some reporters.

The Globe and Mail said MusicNet "relegates (Napster) to a pale
imitation of its former self." The alliance is "another step backward
for the once-proud file-swapping service," added News.com. There was
much talk of the supposedly valuable Napster "brand," but The Register
argued, "Say Napster to someone, and the first reaction will most
likely be 'failure.'" Either that or "pig Latin."

Since Napster nailed down its filtering technique, there's no arguing
that its membership has dropped. But by how much? The New York Times
reported on "Napster's more than 70 million users" (maybe that refers
to anyone who has ever tried the service), a MusicNet adviser
elsewhere mentioned "6 million music fans," and a Webnoize report that
measured only simultaneous users counted a drop from 1.5 million to
840,000. "Users are still there," insisted a Webnoize analyst.
Probably not 70 million of them, however.

Napster is still getting sued by members of the MusicNet consortium,
believe it or not, and a Napster-MusicNet service won't go live until
Napster works out some more copyright-related details. Meanwhile,
Wired News reminded us that "Thomas Middelhoff, Bertelsmann's
chairman, has repeatedly claimed that Napster's new secure service
would be launched by no later than July." Tick tock, Tom. - Jen
Muehlbauer

Napster Signs With the Major Labels
http://www.thestandard.com/article/0,1902,26900,00.html

Napster Service Gets Legit
http://www.wired.com/news/mp3/0,1285,44322,00.html

MusicNet snags Napster's 6 million fans
http://seattlep-i.nwsource.com/business/26189_napster06.shtml

Napster Near Accord on Music Sales
http://www.nytimes.com/2001/06/05/technology/05MUSI.html
(Registration required.)

Napster Signs Deal to Offer Music From Record Giants
http://www.washingtonpost.com/wp-dyn/articles/A26643-2001Jun5.html

Napster cuts deal with majors
http://news.cnet.com/news/0-1005-200-6198507.html

Napster signs deal with MusicNet
http://www.siliconvalley.com/docs/news/svtop/napstr060601.htm

Napster strikes deal with foes
http://www.globeandmail.ca/servlet/RTGAMArticleHTMLTemplate/D,C,C/20010606/w
napsdeal?tf=RT/fullstory_Bus.html&cf=RT/config-neutral&vg=BigAdVariableGener
ator&slug=wnapsdeal&date=20010606&archive=RTGAM&site=Business&ad_page_name=b
reakingnews-business

Napster nears deal with music industry
http://www.theregister.co.uk/content/6/19455.html


-------------------------------


Will Lucent Cut From the Middle?

Hey! Everybody! Lucent says it's turning itself around! Buy Lucent!
Buy tech stocks!

Not so fast.

Though Lucent boss Henry Schacht made some optimistic comments on
Tuesday that helped send the Nasdaq north, it also surfaced Tuesday
that Lucent may try to sweet-talk at least 10,000 high-paid managers
into early retirement to help with that promised turnaround. (Is
"retirement package" some new code for "severance"?)

For analysts and investors, that may still be good news. Lucent hasn't
cut nearly as many jobs as it promised in January, and some observers
have started to squirm - though not as much as Lucent employees.

How many bosses could prematurely hop in their RVs and head for
Florida? Reuters said Lucent would offer buyouts to "several thousand"
managers, the New York Times cited "more than 10,000," and the Wall
Street Journal said "up to 15,000." The Financial Times' source said
5,000 managers, but that's on top of 10,000 jobs already on the
chopping block. The Times may have summed it up best: "It is not clear
how many managers will receive or accept buyout offers." We suspect
the trouble-free loss of even a few thousand middle managers would
support many cube-dwellers' opinions of their supervisors' usefulness.

Nor does anyone know what the early retirement package would include.
Both the Journal and the Times heard a calculation that if half the
managers in question accept the buyout, Lucent could save $100 million
- but neither outlet seemed willing to bet the house on that number.
Sources did seem to agree that middle management, not execs, will get
the buyout pitch. After all, Lucent is having enough trouble finding a
permanent replacement for the CEO it ousted in October. - Jen
Muehlbauer

Lucent to Ax Additional 5,000 Jobs
http://www.thestandard.com/article/0,1902,26922,00.html

Lucent to offer management buyouts (Reuters)
http://investor.cnet.com/investor/news/newsitem/0-9900-1028-6198480-0.html

Lucent to Offer Early-Retirement Packages To 15,000 Managers, Reaffirms
Guidance
http://interactive.wsj.com/articles/SB991747862792871939.htm
(Paid subscription required.)

Lucent Is Said to Be Ready to Offer Buyouts to 10,000
http://www.nytimes.com/2001/06/06/technology/06LUCE.html
(Registration required.)

Lucent Technologies to shed 5,000 more jobs
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3ITBM2MNC


-------------------------------


If It's Wednesday, That Must Be Traveling Music

Trent Lott is officially out of the loop today, and so is Priceline's
Jay Walker. But while the ex-Senate leader crankily steps down, Walker
is probably whistling a happy tune as he exits. The man who insisted
Priceline was a stroke of brilliance has cashed out of the biz. What
does Walker's move mean? Most media outlets switched on the muzak.

According to reporters, Hong Kong businessman Li Ka-shing scarfed up
25 million shares of Priceline on Tuesday. Added to the 35 million he
bought in February through two conglomerates he controls, the
billionaire - pegged by Reuters as Hong Kong's richest man - now owns
30 percent of the former Net darling. He also now controls three of
Priceline's 11 board seats, the Financial Times said.

But don't expect the $110 million investment to enrich Priceline.
According to Reuters, the shares are a private sale by Walker. He
still owns 14.9 million shares in the company, but the media were
unclear on what will become of them. The Associated Press reported
that Priceline said Walker has sold the shares, or plans to. The
Financial Times countered that Walker's remaining stake is subject to
complications such as "options, forward contracts or other private
agreements with investors." So the sale to Li Ka-shing effectively
reduces Walker's stake to nothing, as the peach paper put it.

Doesn't it look bad when a company founder cashes out? Not to a
Priceline spokesman who gamely spun the deal as a positive one that
increases the involvement of two strategic partners, Reuters reported.
The wire service's coverage of the sale provided the best context for
the deal by offering an explanation of the two companies' businesses
and their potential plans for the investment. Cheung Kong and
Hutchison Whampoa are multinationals with holdings that range from
hotels to Internet operations, according to Reuters, and Priceline's
spokesman said the idea is to begin talks with Asian investors to plan
"Priceline-type services" for that market.

Last week Lott famously wrote in a memo that a plurality isn't a
majority. Then again, like the Senate, Net companies aren't always
democratic. - Deborah Asbrand

Hong Kong's Biggest Tycoon Ups His Stake in Priceline.com (Reuters)
http://www.thestandard.com/article/0,1902,26918,00.html

Hong Kong Tycoon Gets 30% of Priceline
http://www.nypost.com/business/31971.htm

Cheung Kong, Hutchison Whampoa Increase Their Stakes in Priceline.com
http://interactive.wsj.com/articles/SB991774702675956266.htm
(Paid subscription required.)

Hong Kong Tycoon Boosts Priceline Stake to 30%
http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3OAYYHMNC&live=true&tagid=FTDDMJNIFEC

Priceline founder to sell own 30 percent stake (AP)
http://news.cnet.com/news/0-1007-200-6199387.html


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MORE NEWS AT THESTANDARD.COM
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Napster Signs With the Major Labels
By Michael Learmonth
The deal will give the song-swap service access to tunes from BMG,
Warner Music and EMI - and ups its odds for survival as a subscription
service.
http://www.thestandard.com/article/0,1902,26900,00.html?nl=mg

Lucent to Ax an Additional 5,000 Jobs
By  IDG
The troubled telco equipment maker may offer buy-outs or early
retirement to a swathe of mid-level managers, on top of the 10,000 job
cuts announced in January.
http://www.thestandard.com/article/0,1902,26922,00.html?nl=mg

Amazon Looks Forward to 2002
By Miguel Helft
Offering its first guidance for next year, the e-retailer says it'll
be 'well-positioned' for pro-forma operating profits. Many analysts
shrug.
http://www.thestandard.com/article/0,1902,26908,00.html?nl=mg

Sega to Enter Chinese Game Software Market in June
By  Reuters
The Japanese company behind "Sonic The Hedgehog" hopes to revive its
fortunes by capturing 10 percent of the Chinese gaming market in one
year.
http://www.thestandard.com/article/0,1902,26925,00.html?nl=mg


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MORE LINKS
~~~~~~~~~~
Internet Lottos Prized By Web Surfers
http://www0.mercurycenter.com/local/center/weblot0606.htm

Tech Doubter Gets Aboard
http://washingtonpost.com/wp-dyn/articles/A26650-2001Jun5.html

Branson and NTL Try to Sell Virgin.net
http://tm0.com/sbct.cgi?s=24677699&i=350665&d=1444474

Amazon Expanding Into Computer Sales
http://seattletimes.nwsource.com/html/businesstechnology/134303327_amazon06.html

Plaintive E-Mail Outrages Israel (Reuters)
http://www.wired.com/news/culture/0,1284,44303,00.html

Survival Of The Losers
http://www.salon.com/tech/feature/2001/06/06/darwin_s_web/index.html

A Helping Handheld for the Disabled
http://www.businessweek.com/bwdaily/dnflash/jun2001/nf2001066_171.htm

Microsoft ends free support for Office 97
http://news.cnet.com/news/0-1003-200-6196458.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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