"We have always known that Microsoft was going to come in with big guns. That is one of the reasons we came up with this early Web presence," Gena Maniscalo says. "Timing is everything, and we are ahead." Maniscalo, Executive Director of Boston.Com, a Web site built by the Boston Globe newspaper, is on the front-lines of an escalating info-war in cyberspace. I recently spoke with Maniscalo, along with interactive media directors at The Washington Post, Dallas Morning News and Sacramento Bee, along with representatives of AOL, AT&T and Microsoft, all of whom now find themselves in the same business. This fall, a war for our eyes and mice is poised to go public, arriving at a Web site near you.
With surprisingly little fanfare, a who's-who of media and communications in the United States has simultaneously decided that the "killer app" that will morph the Web from a novelty to a necessity is a simple metaphor, what some call "digital cities." Each player comes to the Web with a particular strategy, however all are vying for the same goal: to be the online resource for information about your city. AOL, AT&T, Microsoft, the Boston Globe, New York Times, Washington Post, over 300 daily newspapers to date, television stations, and radio stations are all online building variations on this go-local theme. At stake, according to the players, is the $66 billion spent annually on local advertising in the United States -- money that now goes to the "old" media -- television, radio and newspapers.
The money invested in these sites is huge -- a billion or so. Microsoft's project, code-named "Cityscape" is estimated to have a US $500M budget. America Online's "Digital Cites" project has $100M in capital. AT&T's "Hometown Network" has an undisclosed budget, which, according to industry analysts, falls somewhere close to AOL's budget. Tack on the 300 odd newspapers, with 5 to 10 new ones coming online weekly, each with budgets ranging from $100,000 to millions, along with local televisionand radio stations, and it's clear that an awful lot is being wagered on this city concept.
SINK OR SINK?
Newspapers are caught in the middle of this stampede -- damned-if-they-do, damned-if-they-don't. At the heart of these city strategies is a simple calculation. A lot of money is spent on advertising for local products. If people became accustomed to getting local information online, a portion of these ad budgets will migrate from the "old" media to the "new" media. U.S. Newspapers received approximately $36 billion in advertising last year, and 80% of that was placed by local vendors, as opposed to national advertisers. These local ads are sometimes referred to as "the newspaper's franchise." Consequently, newspaper publishers see these online ventures as a threat. They also recognize that computer networks are not a passing fad. They are here to stay.
The logical choice, at first glance, is for newspapers to jump into the Web, build a local site there, cross-fingers, and hope that somehow, someway whatever ad revenue is siphoned off into cyberspace will remain within their corporate balance-sheet. Newspapers, however, don't have particularly deep-pockets, and going online in style is expensive. According to Forrester Research, a Cambridge, Massachusetts, market-research f