In many ways, the rush to the Internet can be compared to the California gold rush in 1849. The people who made money were the ones who supplied the tools, the horses and the food. Today many of the people making money on the Internet are the ones providing the means to get online.
At least that's the philosophy of three entrepreneurs in Washington who have hatched a business plan to target Web casting, a niche industry that officials expect to be hot, as the World Wide Web enters its next generation. Web casting, also known as "push technology," is a direct broadcast of customized, Web-based information to a subscriber's desktop.
The entrepreneurs have formed Torso, a business with a product that is designed to allow companies to be content providers to any Web caster. For example, a company that sells cars can send new product information to a Web caster, which then transmits that information to its base of subscribers.
According to Jeff Hosley, a Torso founder, the current problem with Web casting is that each Web caster is coming out with an authoring tool for its own service but no one company has produced a product that serves as an authoring tool for all Web casters. Torso is attempting to solve this problem by being that link between any content provider and any Web caster. Hence the name Torso.
The Web casting market is expected to be reach $4.6 billion by 2000, according to the market research firm Yankee Group in Boston. PointCast of Cupertino, Calif., pioneered the market when it launched the PointCast Network, a service that broadcasts personalized news and information directly to a viewer's computer screen.
Torso's founders plan to provide a service for content providers that translates their data onto any platform and sends it directly to the Web caster.
The Torso founders are uncertain how much money they will make, how many potential clients they can attract or even how much they will charge for their service. But Dietze said any corporation that has a Web site is a potential customer. They do expect a large subset of companies with corporate Web sites to get into Web casting.
The three put together $100,000 of their own money to launch the company. They are now seeking $1 million in venture capital to continue development of the product. After a beta test in January, plans are to release a product in March. The Torso entrepreneurs will start selling the service to content providers and will later offer an off the shelf software product.
Their idea came about when Jamie Hamilton, the third founder, was working at Freeloader, a Web casting company based in San Francisco. He noticed a publishing problem between the Web casters and the content providers. Hamilton said that each Web casting company requires a different format for content providers to publish its information. For example, if a weather service wants to provide hourly weather forecasts to five different Web casters, the company may be spending between $250,000 to $500,000 to get the information onto each platform, according to Dietze.
PointCast, which was launched in February 1996 and makes money through advertisements, is free to its 1.7 million subscribers. Founded in 1992, the company has received $48 million from venture capitalists and media and technology companies for the service.
PointCast's content providers include news wire services, stock market ticker services, weather services and consumer watchdog reports. Each subscriber requests specific information from PointCast and receives it onto their hard drive. Subscribers may request hourly updates on company stock quotes or the latest weather forecast. Currently, there are about 15 Web casters similar to PointCast, either up and running or in beta testing, said Torso's founders.
Hosley said they have been talking to content providers and Web casters that are "excited about the idea." To Hosley, all of these companies are potential partners.
"[The Web casters] are excited because they see it as a loss if they have to develop authoring tools that only work on their platform," said Hosley. "Content providers have told us they felt hindered by the fact that it's not easy for them to publish on multiple platforms."
"They are hitting a key gap that's not there yet in Web casting," said Andrew Sinwell, an associate of Madison Dearborn Partners, a venture capital firm in Chicago. "They have a great shot."
"Conceptually, what they are doing is interesting," said Sunil Paul, founder and president of Freeloader. "It's just a matter of execution and how good the product is." Freeloader, founded in 1995, launched a service, comparable to PointCast, that automatically delivers off-line content to a viewer's desktop.
The founders of Torso knew one another from previous business circles. Dietze was previously with International Finance Corp., the private investment arm of the World Bank; Hamilton co-founded Freeloader Inc. and served as the vice president of software development; and Hosley was the director of business development and programming for America Online's Travel Channel.
"We all have a similar vision of where we think it's going to go," said Dietze. "We're pretty sure this thing is going to work. It's just a matter of time to see some return."