Sizing Up the Competition: News of Microsoft's CityScape

By: Steve Outing

Microsoft has finally opened up a little about "CityScape," its ambitious online city guide effort that has made newspaper publishers -- and rightly so -- more than a little nervous. What we now know, after months of silence from Redmond, should make publishers breathe a little easier. But make no mistake, what Microsoft is planning will impact newspapers' business.

Here's what Microsoft is willing to tell us about its CityScape ambitions (which are rumored to be in the hundreds of millions of dollars range):

* The first CityScape will launch in Seattle in the first quarter of 1997, followed by New York, San Francisco and Boston. Many other cities are targeted, not just in the U.S., but the company isn't saying which ones. Plans call for 10 to 15 cities to be operational by the end of 1997. Those first cities will become battlegrounds between some of the major players in the online city guide business.

That's just entertainment

* The focus of each CityScape will be primarily entertainment. The good news: Microsoft says it does not plan to offer a news component in its city operations. The bad news: Its entertainment offerings will out-do many newspaper entertainment sections, and CityScape is likely to pull away ad dollars from newspaper entertainment sections and local entertainment publications, as well as newspaper Web services.

CityScape's new editor-in-chief, Michael Goff, who most recently was president and founder of Out Magazine, says the idea is to go "2 inches wide but 5 miles deep." He says that what local consumers really want is a trusted guide to entertainment in their communities, which can get to know their likes and interests and suggest events that they might enjoy. They don't need a broad-based service offering a little bit of everything from entertainment to news to sports to classifieds, but nothing of depth and substance, he says.

This entertainment focus seems to separate CityScape from its chief competition -- CitySearch, which has a strong community focus (as well as entertainment), and Digital City, which seems to be building broader city sites offering news, weather, sports, tourism information, etc., as well as entertainment.

* Partnerships will be part of some CityScape local ventures, but they are not a key part of the strategy. In Seattle, the Seattle Weekly/Eastside Weekly alternative newsweeklies will contribute entertainment reviews and calendar listings. But Goff says such partnerships are not an essential part of the CityScape scheme. They'll be considered when they make sense and when a cooperative media partner is found; otherwise, Microsoft is willing to go it alone, thank you very much. "We are not in the content aggregation game," says Goff. (It should be noted that word in newspaper circles suggests that Microsoft has been rebuffed by most large dailies it has approached.)

* Editorial talent is very much a part of this project. Goff, who is an editorial start-up specialist, is the top dog in Redmond, overseeing and assisting the editors of each City project. Hired to head the New York CityScape editorial operation is Eric Etheridge, who has worked as an editor at Rolling Stone, 7 Days, and George magazine. The top Seattle editor is Jan Even, former arts and entertainment editor of the Seattle Times. And Lisa Allen, former director of editorial opertions for AT&T New Media Services and an Emmy-winning TV reporter, is the top editor in Boston. Each city has a general manager and an executive producer, the latter being the title for the top editorial job.

Goff emphasizes that local editors will have much automony, with Redmond in a role to provide guidance and technology. The project is about local editors interacting with the local community, not about the corporate culture in Redmond dictating what's seen in the local CityScape, Goff says. Where Goff's Redmond team will come in is in providing coverage of national entertainment stories, which can be leveraged by all the sites.

Staff at the local sites will be a mix of individuals from the online, print and broadcast worlds. The idea, says Goff, is to put these people together with Microsoft's technical talent, so that professionally generated content is married to the latest personalized electronic delivery methods.

Microsoft does not seem to be skimping on editorial talent (some of it lured from newspapers themselves), and it is making it clear that CityScape will not rely on existing media for content. This should make newspaper publishers nervous, because Microsoft is gunning at their entertainment sections with some serious editorial talent and a commitment to technology development that newspapers can only dream about. Publishers faced with Microsoft coming to their towns are well advised to shore up the entertainment portions of their online services, because this is serious competition.

No classifieds, for now

* I said at the outset that the news from Redmond is not entirely bad from newspapers' perspective. Where publishers can breathe a sigh of relief: Classifieds advertising. Microsoft has said that it will hold off from seeking classified ads for CityScape, which was one of the project's most controversial elements.

CityScape PR manager Gayle Troberman says that that decision was based on a desire to focus narrowly on entertainment coverage and not be distracted by trying to do too much, rather than out of deference to newspapers. The business model is advertiser driven, and Microsoft believes that will allow CityScape to succeed.

Microsoft's primary rival, CitySearch, has also said it will not seek classified advertising on its own in its markets. CitySearch's chief executive has said that his company won't compete with newspapers, putting classifieds online only if it acquires a paper's cooperation.

* The CityScape advertising strategy employs CUC International of Stamford, Connecticut, which has 1,200 sales representatives in 100 U.S. cities and relationships with 100,000 merchants, according to Goff. This "instant" sales force will be selling online ads to, for example, restaurants; an ad for an eatery near a stadium might pop up when a user requests information on the local basketball team schedule.

CUC is known for its work with local merchants in developing books of promotional coupons. These ready-made relationships with local businesses should give CityScape a good advertising base. Publishers should worry about merchant ad dollars flowing off the printed page and onto the local CityScape. Actually, I don't think this is a matter of "if," but of "how much" of an impact will there be.

* The technology behind CityScape will be worth watching. Goff says that personalization technology will allow editors to filter content and tailor recommendations based upon a user's personal interests and location. "We'll have as many front pages as we have users," he says.

Home Town Network -- Not

As reported in the Wall Street Journal earlier this week, AT&T has killed its Personal Online Services Group and with it the "Home Town Network," yet another online city guide project that was rumored to be envisioned as a $100 million venture. Home Town was being beta tested in Sacramento, California, with the Sacramento News & Review alternative newsweekly as a beta partner. An AT&T spokesman said that it was decided that it would take too much effort and expense to roll out the network nationally.

It's not hard to imagine that AT&T executives looked at the online city guide scene and saw the landscape just a little too crowded. Not to mention, they probably realized that this is not their game, hence the decision to focus on the Internet access and hosting business, where the company has some competencies. (Or, as an AT&T employee wrote to me yesterday, perhaps they just figured out that there was no way to make money in this business -- which shouldn't cheer publishers trying to do exactly that.)

Earlier this summer I tried to learn move about Home Town Network, but was rebuffed by an AT&T spokesman who said the project was not far enough along to talk about publicly. The rug could be pulled from the project before it saw the light of day, he suggested, so he wasn't going to tell me anything. How prophetic!

AT&T still has a place in the online city guide business, however. It is a major investor, via its AT&T Ventures division, in CitySearch.

Steve

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This column is written by Steve Outing exclusively for Editor & Publisher Interactive. Tips, letters and feedback can be sent to Steve at steve@planetarynews.com

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