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Industry Insight

March 2000

Jim Machi The Ultimate Portal

BY JIM MACHI


When people think about the Internet, I doubt they're contemplating the complex network it really is. Typically, what they're really thinking about is how they actually look at the Internet -- and that's via a portal. And a portal means different things to different people.

The day is coming -- soon -- when portal sites will offer voice services as a value-added differentiator. Which means it may be time for the PC-to-Px phone call to step up to the next level.

THE FIRST STOP
So what exactly is an Internet portal? A portal can be the first place a user goes online -- for example, the default "home" setting in the user's browser. It can be a search site, or maybe a Web page bursting with advertising -- typically dynamic advertising that makes MTV's "movement" style of TV look downright "last-millennium." Maybe this Web page is the only tangible product of some multi-billion dollar market cap.com company, or of a company that provides all kinds of Internet services.

When we use this definition, the Netscape and Microsoft sites become huge Internet portals, since so many people don't bother to change their default browser setting. AOL is also a portal, since that's many consumers' first stop when they get onto the Internet. Sites like AltaVista, Yahoo!, and Excite are also prototypical and well-known portals, providing both the search site and, increasingly, informational services.

THE ULTIMATE ACCESS POINT
For illustrative purposes, I've structured a way to look at the Internet via the types of services and infrastructure they provide. The Internet is really the ultimate layered network. Starting at the bottom, we see that ISPs (Internet Service providers) provide the access point to the Internet. (Accessing this point -- be it via DSL, cable, or something else -- is itself an interesting topic. In fact, we've written about it in this column, and will continue to do so from time to time.) The IXCs (Inter-exchange Carriers) provide the backbone. The ASPs (Application Service Providers) are increasingly providing more of the core services.

The portal is where the content and applications reach the consumer. In other words, the portal is the ultimate access point -- where the competition for the consumer takes place. That's why most of the money raised by the .com IPOs goes into marketing. Getting consumers to the portal sites is the most important goal. For instance, we see clever advertisements on TV offering "free money" for switching from your favorite portal to a new one.

ADDING VALUE
Is this kind of promotion justifiable in the long term? I can't say. But I do expect we'll see the portal sites try to differentiate themselves by offering better services. And since I'm writing in INTERNET TELEPHONY´┐Ż magazine, it's only prudent to say that voice services via Internet telephony will likely be one of the new value-added services portal sites offer in 2000.

I expect we'll see all kinds of different offerings. For instance, some sites may offer free phone calls but charge for voice mail. Others may offer free voice mail via a unified messaging application, but charge for live phone calls. Still others may offer free local calls but charge for long distance. The portal companies are creative. They'll come up with all kinds of clever ways to entice consumers onto their sites.

If you're skeptical, consider this. Last June, Excite issued a press release announcing consumers could receive their voice mail, e-mail, and faxes all at a single location with the launch of Excite@Home. Excite isn't including phone calls just yet, but it's certainly shown it sees the light by trying to offer value-added unified messaging services. Net2Phone is also aggressively talking about voice being integrated into almost all Web sites.

HOW WILL IT WORK?
Let's consider a typical scenario. Two people at their separate homes are connected to the same portal site. We'll assume each user has a single phone line into the house and has chosen to be online using a dial-up modem. Since their only phone line is tied up, the users can't make or receive phone calls. What kinds of interactions can these two people have with each other? Since they're on the same portal site, they can send e-mail, play interactive games together, chat, or look at their respective personal Web pages. But they can't make voice calls or use voice mail.

If the portal site was to offer the ability to handle voice, the users could speak to each other. It's not such a new idea. When I first got out of school, I used a VAX with VMS. The system had a feature, which I guess would now be called chat - if you were logged in, someone could "ping" you. You could both could type in messages for an interactive "talk." I wasn't really into this, so if it was that important, I would invariably type in "what is the closest phone number" so I could simply call the other user. This is a primitive version of what it would be like to add voice to the chat feature -- instant messaging, if you will. It would be a powerful value-added feature, and a solid differentiator.

CONSIDER THE CALL CENTER
Much has been written about how "push-to-talk" button capability would enhance service for a consumer browsing on a Web page. Today, most Web pages are really set up for self-help. The company saves money, since they can cut down on the number of agents they need. The company can also accurately serve more customers in a given amount of time. Consumers in the U.S. like helping themselves over the Web, since it usually saves them time.

However, a company's Web page can really be considered a business-to-consumer portal. Just as in the consumer-to-consumer example above, adding voice services to this portal is a way to differentiate the portal site. Looking at this as a portal enhancement and differentiation opportunity is simply a different way to look at the problem.

TAKING IT TO THE NEXT LEVEL
What this all means, of course, is a renaissance for the PC-to-PC phone call. In the January 2000 issue of INTERNET TELEPHONY´┐Ż, Lior Haramaty, in his VoIP Connections column, explains why PC-to-Px calling makes sense. The entire Internet telephony industry started by making phone calls via PCs. Today, the industry is driven by rate arbitrage. Internet telephony is simply part of the infrastructure, with the end points still standard telephones. But Internet telephony applications are coming. And when the portal sites offer voice services as a value-added differentiator, it may just be time for the PC-to-Px phone call to step up to the next level.

Jim Machi is director of product marketing, Internet Telephony, for Dialogic Corporation (an Intel company). Dialogic is a leading manufacturer of high-performance, standards-based computer telephony components. Dialogic products are used in fax, data, voice recognition, speech synthesis, and call center management CT applications. For more information, visit the Dialogic Web site at www.dialogic.com.







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