Message-ID: <12323902.1075845213252.JavaMail.evans@thyme> Date: Wed, 30 May 2001 09:27:10 -0700 (PDT) From: thestandard@boing.email-publisher.com To: mediagrok@thestandard.email-publisher.com Subject: MEDIA GROK: Oh, Lucent, You Tease Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: "TheStandard.com" @ENRON X-To: Media Grok X-cc: X-bcc: X-Folder: \Lewis, Andrew H.\Lewis, Andrew H.\Deleted Items X-Origin: LEWIS-A X-FileName: Lewis, Andrew H..pst ===================================================================== THE STANDARD'S M E D I A G R O K A Commentary on What the Press Is Reporting and Why ===================================================================== | http://www.thestandard.com | Wednesday, May 30, 2001 TOP GROKS: * Oh, Lucent, You Tease * Here Comes MyPlay the Bride * Switch Behemoths, Save $1.95 MORE NEWS: * Lucent and Alcatel Call It Off * Sun's Outlook Doesn't Look Bright * For Lucky Few, DoCoMo's 3G Makes Japan Debut * Battle of the Acronyms: MSN vs. AOL /=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= advertisement =-=-=\ Save time and $$$. Enroll in Hertz' Business Account Program http://click.email-publisher.com/oaaacjqaaP8GobVAtCeaaaacSb/ \=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=/ TOP GROKS ~~~~~~~~~ Oh, Lucent, You Tease After keeping coy for weeks, Lucent and Alcatel finally confessed that they've been talking about a merger. But in the same breath, they said the deal was off. And after AT&T and Agere already bought their bridesmaid outfits ... Not 24 hours before the companies bailed out, respectable news outlets worldwide ran headlines like "Alcatel purchase of Lucent seen near." What happened? The most common explanation - given by anonymous but talkative sources to just about every journalist who asked - was that Lucent wanted a "merger of equals," not a takeover. "The two sides had made significant progress after a weekend of negotiating at a chateau outside Paris," said the Wall Street Journal. (The New York Times added that the talks "extended into the nights over dinner and bottles of excellent wine" - tough life.) Alcatel and Lucent appeared to have ironed out every possible merger issue except the composition of the post-merger board of directors. Lucent chair Henry Schacht wanted an even 8-8 split of directors; Alcatel wanted to give itself 8 and Lucent 6. "So the sticking point for what was to be a $23 billion deal comes down to vanity," said The Register, adding that Alcatel deserved the upper hand, "considering the cash-crunching mess-up on the pavement created by Lucent's management." Investors gave a cheer as the deal was canceled, and shares of both firms rose. That "reversed the slide of recent weeks as talk increasingly cast Lucent as a sinking ship and Alcatel as a reckless savior," said TheStreet.com. Telecom competitors probably aren't as psyched, said CBS MarketWatch, since a long Alcatel-Lucent merger hassle might have given rivals a chance to convert some customers. The non-merger probably won't put the hurt on Alcatel, but it doesn't look good for Lucent and its debts, predicted the New York Times and the Chicago Tribune. "Alcatel was by no means the only prospective merger partner Lucent courted," explained the Times. "But it was apparently the only company that expressed a real interest." Sorry, Agere, you'd better hope you can return the dress. - Jen Muehlbauer Lucent and Alcatel Call It Off http://www.thestandard.com/article/0,1902,26746,00.html?nl=mg Why Rivals Rue Alcatel-Lucent Outcome http://cbs.marketwatch.com/news/story.asp?guid=%7BD3A3D62E%2D920A%2D4B00%2DBA30%2DA1CBE68DEE1A%7D Alcatel, Lucent End Discussions For $22.8 Billion Telecom Merger http://interactive.wsj.com/articles/SB991157931659734175.htm (Paid subscription required.) Alcatel and Lucent Call Off Negotiations Toward a Merger http://www.nytimes.com/2001/05/30/technology/30LUCE.html (Registration required.) Lucent, Alcatel Merger Fizzles http://www.chicagotribune.com/tech/news/article/0,2669,ART-52092,FF.html Lucent's Hits and Misses http://news.cnet.com/news/0-1004-200-6078084.html Scuttling of Alcatel Deal Puts Spotlight Back on Lucent's Turnaround http://www.thestreet.com/tech/scottmoritz/1444604.html Lucent Merger Talks Collapse http://www.washingtonpost.com/wp-dyn/articles/A93580-2001May29.html Lucent Jilts Alcatel at the Altar http://www.theregister.co.uk/content/7/19282.html --------------------------------------------------------------------- Here Comes MyPlay the Bride Everyone's a little weepy as MyPlay heads to the altar with rich German sugar daddy Bertelsmann. Sure, the two companies let it slip to the media that Bertelsmann is buying MyPlay for $30 million, and the news took off like a pair of honeymoon pajamas. But a report in Los Angeles Times makes you wonder whether MyPlay is really marrying up. Bertelsmann has big plans for its new division, to be launched July 1 and called BeMusic. According to outlets, BeMusic would include MyPlay, CDNow, BMG Music Service and eventually Napster - if Napster can go legit and Bertelsmann can convert its loan to the company into an ownership stake, the New York Times added. After leaking the deal to the media, Bertelsmann and MyPlay officials went mute, apparently saving their sound bites for today's official confab. That left most reporters dusting off the well-worn template, "this is the latest example of," to serve as analysis. (The fill-in-the-blank answer, by the way, is that the deal is the latest in a string of unions between the major labels and online music companies.) News.com, however, offered the fullest explanation, pegging the recent shotgun marriages as examples of the music labels' submit-or-die tactics. "More critical minds in the startup and analyst community have speculated that the labels deliberately starved the online companies of music to minimize the potential competition," wrote Jim Hu and John Borland. Then again, given the collapse of the Net music market, startups and analysts have an ax to grind, no? And what of MyPlay? Most reporters seemed to know little of it, other than the vague notion that the $30 million sale price made it a poor man's MP3.com. Several outlets reported that Bertelsmann had considered buying MP3.com but passed because of that deal's $372 million price tag. Webnoize recalled that a year ago, MyPlay, too, had been in the nine-digit club when it was reportedly in talks to be acquired by Yahoo for $200 million. Maybe MyPlay just couldn't cut it in Internet time. While the Financial Times quoted its Bertelsmann source as applauding MyPlay's "proprietary technology," the Los Angeles Times pegged it as the company's main problem, requiring a glacial 20 minutes or so per song on the average dial-up modem to transfer a home's music collection into a locker. Even MyPlay threw up its hands, according to the L.A. Times, having changed its focus in March away from consumers and into developing online music-distribution services for other companies. If MyPlay is feeling emotionally unavailable, that's probably just as well. Its new partner isn't one for sharing, according to the L.A. Times. On Tuesday, Bertelsmann finally agreed - listen closely and you can hear its arm being twisted - to share some of its $20 million in proceeds from its MP3.com lawsuit with the artists on its record labels. - Deborah Asbrand Bertelsmann in Deal to Buy Music Start-Up http://www.nytimes.com/2001/05/30/technology/30MUSI.html (Registration required.) Bertelsmann to Buy MyPlay.com for $30m http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3WTO70CNC&live=true&tagid=IXL5PIPSW8C Bertelsmann's eCommerce Group Acquires Web-Music Firm MyPlay http://interactive.wsj.com/articles/SB991184696712205889.htm (Paid subscription required.) Bertelsmann to Buy MyPlay http://news.cnet.com/news/0-1005-200-6093589.html Bertlesmann to Acquire Locker Service MyPlay http://news.webnoize.com/item.rs?ID=13201 Bertelsmann Buying Net Service MyPlay http://www.latimes.com/business/20010530/t000045121.html Bertelsmann to Share Award in Online Suit With Artists http://www.latimes.com/business/20010530/t000045119.html /=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= advertisement =-=-=\ **Standard U -- Executive Education for Today's Leaders** Lead by the faculty of Stanford Graduate School of Business and top industry leaders, Standard U is designed to equip Sr. managers with the skills they need to prosper. To get more information and apply: Call 800-945-0880 or visit http://click.email-publisher.com/oaaacjpaaP8GlbVAtCeaaaacTb/ Mention special tuition code, TISCCC and get 25% off tuition. \=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=/ Switch Behemoths, Save $1.95 If you have anything to say about the following information, you're doing better than most journalists: Microsoft is launching a $50 million campaign to lure AOL customers to MSN. Maybe reporters were still hung over from Memorial Day barbecues; most of them phoned in this one. MSN's selling point is AOL's upcoming price increase from $21.95 to $23.90 for a month of unlimited access. Microsoft will offer AOL converts three months of free MSN access and a locked-in $21.95 per month rate until Jan. 1, 2003 - but only if you're a new subscriber. We wonder if that means existing MSN users might see a price hike of their own in 2002, but apparently we're the only ones. As of Grok's press time, few writers seemed to remember that ISPs other than AOL and MSN even exist. The AP and the Washington Post did mention third-place provider EarthLink. (The Post's Alec Klein provided further much-needed context by describing the "long-standing rivalry" between Microsoft and AOL.) Nobody seemed to recall EarthLink's 1998 "Get Out of AOL Free" campaign, which targeted AOL members the last time AOL raised its price. It took a confessed Microsoft shareholder, Rex Moore of the Motley Fool, to blow MSN's free media ride. MSN's rate "is no bargain," said Moore, since AT&T's WorldNet service costs the same, EarthLink is cheaper, and "there are ISPs that offer dial-up access in every state for less than $15 a month." Picky, picky. - Jen Muehlbauer Battle of the Acronyms: MSN vs. AOL http://www.thestandard.com/article/0,1902,26752,00.html?nl=mg How Sweet Is Microsoft's Counteroffer? http://www.fool.com/news/2001/msft010529.htm?ref=foolwatch Microsoft Tries to Woo AOL Users (AP) http://www.austin360.com/shared/news/technology/ap_story.html/Technology/AP.V0500.AP-Microsoft-AOL.html Microsoft Seeks to Profit From AOL Hike http://www.washingtonpost.com/wp-dyn/articles/A94434-2001May29.html EarthLink Offers Online Users A Chance To 'Get Out Of AOL Free' http://www.earthlink.net/about/pr/aol.html /=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= advertisement =-=-=\ GET 4 FREE ISSUES OF THE INDUSTRY STANDARD The Industry Standard is the only weekly newsmagazine devoted to covering the New Economy--and you're invited to sample 4 issues--absolutely risk-free! Click on the url below to order today. http://click.email-publisher.com/oaaab7saaP7YtbVAtCeaaaacUb/ \=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=/ MORE NEWS AT THESTANDARD.COM ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Lucent and Alcatel Call It Off By Jason Krause Dreams of a trans-Atlantic telecom powerhouse fade when the companies kill merger talks, after more than a week of rumors. http://www.thestandard.com/article/0,1902,26746,00.html?nl=mg Sun's Outlook Doesn't Look Bright By Mark Boslet The computer maker says it will miss 4th-quarter expectations because demand in the U.S. and Europe is still sluggish. http://www.thestandard.com/article/0,1902,26748,00.html?nl=mg For Lucky Few, DoCoMo's 3G Makes Japan Debut By Reed Stevenson - Reuters Despite delays, the Japanese wireless giant's new service gets an enthusiastic reception. http://www.thestandard.com/article/0,1902,26756,00.html?nl=mg Battle of the Acronyms: MSN vs. AOL By Terry Lefton Microsoft is spending a cool $50 million to market its ISP in hopes of luring America Online customers faced with higher prices. http://www.thestandard.com/article/0,1902,26752,00.html?nl=mg --------------------------------------------------------------------- MORE LINKS ~~~~~~~~~~ Blair Under Fire After Microsoft Presentation http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3SQPU7CNC Sun Reduces Expectations on Earnings http://www.nytimes.com/2001/05/30/technology/30SUN.html (Registration required.) Hormel Is Resigned to Use of 'Spam' in Net Slang (St. Paul Pioneer Press) http://www.siliconvalley.com/docs/news/svfront/026425.htm Amazon Likely Made Deceptive Statements On Privacy Policy, Federal Regulators Say http://interactive.wsj.com/articles/SB99117466275010670.htm (Paid subscription required.) Terra Lycos' Davis Says Company Won't Buy EarthLink or CNET http://www.inside.com/jcs/Story?article_id=31861&pod_id=13 Insurer Drops Web Service http://www.jsonline.com/bym/tech/news/may01/wausau30052901.asp Tax Bill Has Provision for Computer Writeoffs http://www0.mercurycenter.com/business/top/007362.htm Laid Off - Got Mail? http://www.wired.com/news/infostructure/0,1377,43873,00.html Disney Setting a Mousetrap to Lure Buyers to Its Castoffs http://www.latimes.com/business/20010530/t000045086.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), Lori Patel (loripatel@hotmail.com) and David Sims (davesims@sonic.net). Edited by Jimmy Guterman (guterman@vineyard.com). Copyedited by Jim Duffy (jduffy@thestandard.com). GET THE MAGAZINE ~~~~~~~~~~~~~~~~ 4 RISK-FREE issues at this URL: http://click.email-publisher.com/maaacjAaaP8GLbVAtCeb/ GET MORE NEWSLETTERS ~~~~~~~~~~~~~~~~~~~~ The Standard newsletters cover the media, stock market, e-commerce, music, law and more. To SUBSCRIBE to other newsletters, click here: http://click.email-publisher.com/maaacjAaaP8GMbVAtCeb/ To unsubscribe, click here: http://thestandard.email-publisher.com/u/?bUrKAM.bVAtCe ADVERTISING INFORMATION ~~~~~~~~~~~~~~~~~~~~~~~ For more information on advertising in The Standard Newsletters, contact: Erik VanderKolk (evanderkolk@thestandard.com) FEEDBACK AND PROBLEMS ~~~~~~~~~~~~~~~~~~~~~ Send letters to the editor to letters@thestandard.com. Please contact us with any problems that arise: http://www.thestandard.com/service customerservice@thestandard.com You can also contact us via phone or mail: Standard Media International, Customer Service 866-776-9890 (phone) Copyright 2001 Standard Media International