Shrinking to grow large

AOL goes small to stay big The future of the Internet isn't as the desktop-driven beast of today-and America Online is bracing for it. The next generation of service will be much smaller, running off everything from Personal Digital Assistants (PDAs) to cell phones to digital watches. AOL's new software is inching in that direction with version 5.0, which allows users to adapt some features, such as a new interactive calendar, for use on portable devices. CEO Steve Case says he wants to change the way people approach the online world-to one where email and the Web are available "no matter where you are, no matter what you are doing, no matter what device is near you." AOL, which has a preview version now available, will roll out new features over the next few months. For example, users will be able to check their email via Palm organizer and telephone (with a digitized voice "reading" each message). By being more flexible, the online service, which has more than 18 million subscribers, can help ensure its survival in an uncertain future. For those who use AOL on normal PCs, version 5 is a lot like versions 3 and 4. Some tweaks may come in handy. A feature called "You've Got Pictures" lets users drop off film for developing, then download the pictures on their computer sans scanner. AOL won its dominant position promoting itself as the simplest way to get online. As the Net keeps changing, the service will have more to prove. TV Guide: from paper and ink to bits and bytes TV Guide isn't really a magazine anymore; it's an online database. The publishing Goliath is quietly deemphasizing its print publication, moving toward on-screen programming guides and Web directories. Now TV Guide is taking the ultimate leap by selling itself to Gemstar, the company that makes the VCR Plus+ device. The two companies have been vigorous competitors in the race for electronic programming guides. With such a product programmed into a cable box or satellite receiver, viewers can surf their TVs in the same way they surf the net. A searchable index allows viewers to find when Perry Mason or Monday Night Football comes on. Such features are a remote control user's dream and have many observers wondering if this will kill off the printed TV Guide eventually. Viewers can also flip through an on-screen menu and look for a show to watch. For channel-flippers, windows pop up showing the channel name, program name, and TV rating. Capsule reviews are even shown for movies. Right now, Gemstar licenses its services to online power players America Online and Microsoft. Those companies may strike out on their own if they are faced with a Gemstar/TV Guide monolith. Once more and more users can log on to the Internet on their TVs (a la Microsoft's WebTV service), Gemstar/TV Guide can expect a hearty competitor to rise up. TV Guide made a huge move from print to electronic media when United Video Satellite Group bought it from Rupert Murdoch News Corp. for $2.51 billion in March. Its "Prevue Channel" and company name were renamed after this pre-Gemstar deal. The power of high-tech is dwindling the print product; readership is down to 11 million compared to 17 million in 1988. All this is another example of how distinct media like TV, magazines, and the Internet are coming together. The great convergence could spur a great shakeout in corporate America with some brand names staying alive and many others falling by the wayside. TV Guide aims to be one of the survivors. MCI/Sprint: alliance for the digital revolution MCI WorldCom and Sprint want to get hitched. Now regulators will have to speak soon or forever hold their peace. The proposed new WorldCom company combines the No. 2 and No. 3 long-distance leaders and will control 36 percent of the market if the $115 billion union succeeds. The merger likely will turn up the fire under the feet of dominant AT&T with its combined package of wireless phone, paging, and online services. The MCI/Sprint deal is the largest merger ever, bigger than even the still-pending $82 billion merger of Exxon and Mobil. Right now, MCI/Sprint is under the scrutiny of the FCC, Congress, and the Justice Department. FCC chairman William Kennard attacked the deal, remarking that the companies "will bear a heavy burden to show how consumers would be better off." Regulators have stopped mega-mergers before; a proposed merger of AT&T and SBC Communications was nixed back in 1997. What does all this mean to the consumer? Nothing, right now. For one thing, phone rates are at historic lows. For example, online offers like the AT&T One Rate 5¢ Plan and Qwest Communicator tout round-the-clock long distance for only 5¢ per minute plus a $9.95 monthly fee. Don't expect the logos to change to just "WorldCom" for several months. Little will happen to Sprint and MCI customers until next year because of the hurdles in completing the merger. The merger itself reflects how the telecommunications industry has changed in just a few years. Long distance isn't the cash cow it was in the mid-1980s, when MCI and Sprint were grabbing for Ma Bell's throat. What matters now is technological reach as the great digital convergence carries on: The lines between TV, radio, telephone, and Internet service are blurring.