New Venture Delivers Home Networking

Given: Linking your refrigerator to the Internet is still a ways off. Such a reality check is necessary after the deluge of hype about home networking that came out of a boisterous CES earlier this month--courtesy of Cisco, Sony and Microsoft. It was in stark contrast, then, that Lucent-backed startup Home Wireless Networks introduced itself and its first products at a small press conference in New York's financial district late last week.

The announcement came with limited fanfare, but a clear vision, which centered on telecom. "Microsoft and Intel will always dominate the high-end PC business. But new devices? Probably not," says John Taylor, Ph.D., chairman, president and CEO of the Norcross, Ga.-based startup. The statement gave voice to an underlying theme of how current dynasties are threatened by the emerging arena where voice and data converge.

"We were struck by the potential consumer flash point," says Gerald Butters, group president of Optical Networking at Lucent Technologies, explaining why Lucent invested in the company on whose board he sits. With the company's technology, a user could, for example, send a fax to a printer in another room from a wireless handset as easily as from a roaming notebook PC. Previously, much of home networking products from the likes of 3Com

and Intel-backed ShareWave involve modems or other devices that connect a PC, receivers and printers with the Internet. These products typically eliminate the need for traditional cabling between devices but make a PC the central, controlling device.The central device from Home Wireless Networks, meanwhile, is a "controller" that creates a wireless network between outside sources and its handsets or any device connected to a "jack."

connected to voice devices such as a fax outlet or data devices such as a PC. A typical home solution might include a controller, two wireless handsets, a voice jack for a fax machine and two data jacks for PCs--all for less than $1,000. A small business might employ a larger system supporting more jacks and handsets for under $3,000. Consumers, telecommuters and businesses with less than 15 employees all want the expanding array of services such as Internet access and PBX-like voice services like call forwarding and caller ID, says Ramesh Barasia, vp of marketing and a former Lucent executive. So far, though, cost and complexity have been stumbling blocks, he says.


"Customers want simplicity. They want it all but they want it hassle-free," Barasia says. Marketing for now will focus on "priming the pump," Barasia told MC. Efforts will depend on PR and word-of-mouth. Advertising began only with a single ad in the Atlanta Constitution. Later this year the company will begin advertising on the Net and in publications targeted at small businesses. Barasia and Taylor both stressed the quality of presenters at the event as a hint at what kind of distribution/marketing partners HWN will be courting: the likes of SBC and British Telecom. For now, though, the only way to get the product is through HWN's own e-commerce site.


Yahoo! Gets Foxy!


Yahoo! has joined hands with Rupert Murdoch's News Corp. in an aptly timed marketing agreement that will kick off Super Bowl Sunday. In exchange for a national media buy, News Corp. has agreed to give Yahoo! exposure through nine of its media properties, including Fox Television Station Group, Fox Sports Net and Twentieth Century-Fox Film. Although Yahoo! is no stranger to television advertising, aligning with News Corp. will give the company its first shot at Super Sunday. What's in it for News Corp.? Well, the company doesn't exactly connote Net savings. Perhaps this agreement will change that. "We think that News Corp. is an innovative media company [which has] strong brands in an offline environment," says Nancy White, marketing manager for Yahoo!. The portal will run promotional spots and commercials throughout Fox's pre- and post-game Super Bowl programs.


In exchange, Fox's new series "Family Guy"--which will debut after the game--will receive prime promo space and banners on Yahoo!, which will also host a chat with the series creator. "[We're] helping to generate awareness and drive viewership in the program," White says.


Terms of agreement were not disclosed and White would not comment, but MC sister Adweek publications pin the deal in the $20 million range with an estimated $15 million dollar media buy. White was adamant that Yahoo! is still an independent company, squelching any speculation that News Corp. might invest in the portal. "We don't see the relationship evolving into something like that. It's a smart business and marketing relationship that we're leveraging." Maybe so, but as it stands independent portals are becoming somewhat of a rare species: Excite just teamed up with @Home, Snap joined hands with NBC and Disney has a large stake in Infoseek. What's the Yahoo! valuation at these days anyway? Maybe Yahoo! is just testing the waters to see if it wants to buy News Corp.

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Yahoo Takes New E-commerce Tack with Viaweb Buy

In a move that could herald the next front in the online shopping wars, the portal prodigy Yahoo yesterday unveiled a budget-priced, do-it-yourself online storefront service aimed at small and mid-sized businesses. The Santa Clara-based web "portal site" announced the pending $49 million acquisition of e-commerce startup Viaweb, whose technology and customer base fuel the new service at Like a GeoCities for entrepreneurs (in fact, GeoCities itself is trying the same thing), Cambridge, Mass.-based Viaweb lets businesses lacking in Net-savvy create and maintain their own online storefront from a standard web browser; the Viaweb Store, now called the Yahoo! Store, hosts the site and handles security and transactions, starting at $100 a month for sites carrying up to 50 items. "A lot of people don't realize we're the marketshare leader in e-commerce software," says Viaweb president Paul Graham, who claims that with 1,000-plus client sites his company eclipses better-known e-commerce outfits such as iCat. For Yahoo, the buyout represents a new direction in its e-commerce strategy, which has thus far been characterized by high-profile cross-branding deals with major consumer names such as Visa and vendors such as CDnow and "It doesn't mean were not doing big deals anymore, but we saw it as an opportunity for a new revenue stream," says Ellen Siminoff, vp of business development for Yahoo.

And though she says revenue will be significant down the road, Siminoff concedes that an even bigger impetus may be sustaining e-commerce momentum with the new vendors and audiences that Viaweb will bring in.

"Our real goal is to build marketshare and integrate the service," she says. "We think it's a really important extension. I wouldn't be so arrogant as to step into our competitors' shoes, but this really makes Yahoo the centerpiece for small merchants."

Naturally, the Yahoo association also adds value for Viaweb users, although for the time being a client of the Yahoo Store doesn't receive prominent placement (or even an automatic listing) in Yahoo's regular directories. "

We only launched today; you have to give us a few weeks," says Siminoff, adding that the new service would be promoted within Yahoo, but that she wasn't yet sure what outside marketing efforts would boost the store.


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