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I. Executive Summary

In the past 2 years, the the Internet has become a major focus
for the the community.  Although the Internet has been around
for over 15 years, it was primarily a research network used by
engineers and scientists at leading universities, government
agencies, and military branches.



II. Why is the Internet important to S&P


More than anything else, the Internet represents Communication,
Powerful Relationships, and Opportunity.  This is true for
users, information providers, access providers, and carriers.
The internet is a carefully balanced set of agreements or
de-facto "standards" established and maintained by a series of
public specifications known as Requests For Comment (RFCs), and
Freely Distributable Reference Source Code (FDRSC).  Although
most of this code was written for variants of the UNIX operating
system (once FDRSC itself and avialable in FDRSC variants),
several commercial vendors have ported this code to Windows and
OS/2.  Currently this "unsupported" software is supported by
over 200,000 engineers and MIS professionals.  It is very
popular with Value Added Resellers, Consulting Services, and
Large corporations because they don't have to "build from
scratch", yet they can diagnose and correct problems more
quickly than "vendors".  Because these corrections are
contributed back to the internet, support is generally quite
good

Currently, there are an estimated 60-80 million E-Mail users and
an estimated 10 million users of the World Wide Web (the Web).
There are over 4.5 million registered "Web Pages", each
averaging about 25,000 hits (uses) per week.  Quality Commercial
content can go as high as 25,000 hits per day.  The Web provides
an easy to use interface that requires a minimal amount of
expertize to use.  Most commercial Web Browsers are very easy to
set up.  Dial-up users need to provide a phone number and 2
"addresses".  Each address is 4 numbers between 1 and 256, for
example 192.131.34.7 this information is provided by the access
provider.

As an advertizing media, the Web provides content providers the
opportunity to provide advertizing to highly qualified
customers.


A. What if we ignore the Internet

The internet is growing at a rate of nearly 20 percent/month.
There are a number of metrics being used to estimate the
approximate number of users using the different types of access,
but nearly all indicators are that people are connecting at an
an exponential growth rate that exceeds 10%/month.  In some
segments (Web users) the gowth rate exceeds 20%/month.
There is already a significant presence on the internet.  The
economics in terms of band-width efficiency and low switching
and link costs (largely due to FDRSC) has caused the internet to
displace traditional on-line "self contained services".  Lexus
and Nexus are now on the Internet, as is Dow Jones.  There are
several government databases (Edgar) which are provided in a
"raw" format in delayed databases.  The on-line services are
also now providing access to the web and other internet services
and finding themselves able to leverage outside data.

Since MCI first started carrying the internet traffic in 1991,
the combination of large amounts of research data, interactive
communication (e-mail, bulliten boards called "news groups", and
real-time Internet Relay Chat (computer conference calling) have
lured users into first suplimenting their on-line service
(America OnLine, Prodigy, or Compuserve) and eventually subscribing
to a more direct full service direct access provider.
On of the more significant factors is the integration of
corporate enterprize networks and the Internet.  Historically,
the internet was primarily corporate lines which were "donated"
in exchange for access to research and development information.
Today, fire-walls and routers provide a means of providing
secure access using protected common carriers.   The invisible
"commercial internet" is also growing at exponential rates.

Trying to ignore internet is like trying to ignore the train
that is coming down the tracks.  It is better to be standing on
the platform than between those tracks.  AT&T resisted the
Internet for years and lost a significant market share in the
process.


B. How it fits with an overall online access strategy

The Internet is rapidly becoming commercialized and is now
accessible by nearly anyone in the world.  There are several
different protocols and services which facilitate access.
Bullitens and clip files can be sent via e-mail, real-time feeds
can be sent using IRC.  Finally, we can provide high-quality
services with uniform interfaces whether provided at a national
site, or in the local corporations.  For example, customers with
high demand could receive a ComStock feed and have the same Web
interface on their local system.

Providing Internet access would provide access to all Prodigy,
Compuserve, AOL, Delphi, and Direct Access internet customers.
Proprietary strategies could give us only a small segment of the
market at best.

By adopting the open standards of the Internet, we can also provide
high-quality low-cost "enterprise servers" which can combine comstock,
internet (for retransmission of lost sattelite records) and LAN access
for high-performance "Web Servers" within local corporate fire-walls.

C. What are our real expectations

There are several sources of revenue available.  Web pages are
now earning as much as $7000/line when they are relatively busy.
The important factor on the internet, especially WEB advertizing
is that the reference can be placed such that very highly
qualified customers are actually intentionally requesting the
advertizing with the intent of making a purchase decision
within moments of starting to browse.

The information consumer market (people willing to pay for content as
well as access) is also growing exponentially.  It is not unusual to
have an average of 200-600 simultaneous users on a popular site.  For
several types of information (news, financial data, classified
searchable advertizing...) they are willing to pay s much as $1.50/page
(Meade), or as much as $100/month (Dow Jones).  Generally there is a
wider acceptance of "bulk purchasing" - 500 pages/month for $5.00/month
(the equivalent of a copy of Byte magazine).  Again, this figure was
for a local Newspaper offering it's news and some secondary databases.

Even at a mere penny per page, it is likely that we would be capable of
earning $60,000/day at only 60 pages/second.  A 5 segment stock report might
actually be 40-50 different pages.


III. Significant Issues

If we wish to be on the internet, there are some issues we need
to manage.  In order to reach the widest range of customers, we need to
manage compatibility.  In order to protect the value of our content, we
need to manage security.  We also need to provide convenient mechanisms
to receive payments for our content.  We also need to provide ways to
get the customer hooked on our content and have them return regularly
by providing "free samples" while not giving away everything.

A. Compatibility.

We must first be aware of the Open Standards.  This is
the key to wide-spread user acceptance.  Unlike vendor controlled
environments where "revolutionary" releases are shipped once or twice per
year, the Internet is a more "evolutionary" with innovations being
available as much as a few years prior to general acceptance by the
entire user community.  It is important to be aware of these
innovations, even to provide demonstrations, but it is risky to
implement features that exclude clients.  The customer who is
greeted with a message like "The server refuses to accept your
connection" will become a regular customer of the competition. 

B. Security and copyright

There are two sides to the security issue.  One is protecting
our data from unauthorized access and modification, the other is
overcoming the misinformation that has been proliferated lately.
The WEB uses a communications protocol called the HyperText
Transfer Protocol (HTTP) which provides much of the session
layer management.  The Web also uses an application protocol or
"language" called the  HyperText Markup Language (HTML).  The
latest browsers, including Netscape and Mosaic 2.0+ provide
security features such as the "Secure Sockets Protocol" (SSP)
and the "Secure Hypertext Transfer Protocol" (SHTTP).  The SSP
is patented and has must be licensed for commercial use.  The
SHTTP is available under FDRSC which assures a wider acceptance
and reasonable licensing costs.

The secondary issue is that of copyright.  The individual user
who posts a single story once/month  probably does more to
advertize our product and service (they need to be guided
through an explanation of attribution).  The big concern is the
user who routinely clips documents and starts passing them
around in news-groups.  Generally, those people should site the
URL instead of quoting the full article.  A 2 paragraph summary,
or the first 2 paragraphs should be reasonable.

C. Commercial -- how do we get paid

Until recently, commerce on the net was a bit challenging.  The
risk of having your credit card and related information
intercepted by someone who would use your card to buy their
computer was too high.  Recently, relaxation of resrictions on
RSA and DES encryption have reduced the risk of casual
interception (something like looking over your shoulder
electronically).  Several companies including First Virtual
Holdings, Digicash, NetCash, and First Boston offer "push-button
checks".  The set-up fees range from $10 (First Virtual), to
$2500 (Visa), and are likely to go up rapidly as leaders emerge.
They collect commissions ranging from 39 cents to 6 percent.

There are several charging strategies.  The simplest, from a technology
standpoint would be the "charge per hit" or the "bulk rate
charge per hit".  The concern here is that each user might have
to contract with 2000 providers and each provider has to deal
with 2 million customers.  There are several companies which
provide a "One fee buys thousands of servers".

These systems let you delegate authorization to them and at the end of
the month, you tally up the number of accesses you submitted and
collect a percentage based on that proportion (1 to 3 cents/page).
Users who are information hungry will be very likely to use this
service.  Companies that provide this include the NewsShare
corporation, the Author's registry and the CopyRight Clearing house.
In addition, many ISPs are including royalty charges to one or more of
these services.  Examples of this include NewsShare, Copyright Clearing
House, Folio, and the Author's registry.


C. Content strategy -- how much free

There are several strategies for managing free vs commercial.  A
simple strategy is to combine the "puppy dog close" (try it out
a few weeks, if you don't like it, you pay nothing), and the
health club plan (get them on for a year plan so that they feel
the must come back).  In addition, we may want to work out bulk
rates for access providers (1,000,000 pages/month at 2
cents/page).  The unused or excess pages/month will be factored
into the next month's rate.

We may wish to become a payment recipent who supports several
copyright clearing houses.  In effect, we would collect the payment
and the clearinghouse would credit our "pool" and allow the users we
put into the pool access to ours and other publishers information.

IV. Actual Recommendation

What follows are several reccomendations, with alternates where
desired.

  A. The Home Page

In addition to the usual copyright and "more about us", we should
also provide lines which point to search engines (Wais, Folio, Lycos...)
Another line should link to a Marketscope "Menu".

We should also include Payment options, first for payment directly to us
for private and consortium data.  We should offer them "apply buttons"
for each of these cards.  We should at least support First Virtual,
Digicash, and NetCash.  The goal is to make it as easy as possible to
turn them into a paying customer.

All content pages should contain links back to the S&P home page.
Specifically a hierarchy like:

	McGraw-Hill, Standard & Poor's, Product (Marketscope...),
	Topical (Company profile information), and "previous".
	The intent here is to guide customers who recieve our pages as a
	result of search hits back to company oriented product.

  B. Product offering

  - Content


  - Presentation

  - Pricing Model

The "low-budget" customers would be given access to a delayed (batch
update) feed on a very generic server.  The "High end" customers would
receive real-time updates and rapid response times.  Corporate
customers should have the option of a web-server interface to
Comstock/Marketscope data.

We can also point links to "premium" services and invite them to upgrade
their levels after a certain number of "Samples".  After they've seen
10 consensus reports within a week, they know what it is and can
determine whether they consider it worth the extra payment.

In either case, advertizing is a definite possibility.  The "random
spot" is generally disliked by internet users, on the other hand,
relevant information, such as a link to company home-pages or targeted
catalogues can be very worth-while.  Often, corporate users search
content as buyers looking for suppliers.  By the time they press
the "See advertizing" page, they are highly qualified and very
interested.  Some of the most successful internet commerce servers are
little more than "Classified Advertizing".

We will probably want to create "Company Profile pages" which function
as a "table of contents" for a group of products, including prospectus
and advertizing "buttons".

  - In house vs. outside development (system operator)

We want to leverage as much of the available technology as possible.  It
is important to have source code, to know that that source code is
available to others, and to participate in the supporting news groups.
This will reduce the development effort and at the same time assure a
higher probability of rapid resolution of problems.

The internet is a global network.  We need to be aware that just about
the time New York Closes, Hong Kong is opening.  When England opens,
it 3:00 AM.  It can be very useful to be able to get a response from
support group members in England, New Zealand, Australia, and
California.  As good internet citizens, we should monitor these groups
and contribute where answers are available "off the cuff".  Often, the
bug we fixed yesterday will be discovered by 3 others tomorrow.

  C. Other uses

Most of the focus has been on "The Web".  The internet also provides
e-mail, news-groups (public forums, many technical and business
oriented), and archives (ability to search nearly 1 billion (mostly
text) documents in a matter of seconds) using "front-ends" which
interface to web browsers.  We want to be able to serve these needs as
well.

The internet is a natural form of customer feedback, discussion groups,
and free-lance support.  As the commerce market increases, there are
more business oriented forums as well.

We should use the "Standard" products.  There are about 20 mail
interfaces to Windows, all but the "commercial" packages support
internet standards transparently.

There is also the possibility of providing encrypted feeds through
the internet, or using the internet to provide "retransmissions" for
Comstock Sattellite feeds.  Both can provide access to the small "branch
banks" and "Certified Financial Consultant" who can benifit from the
combination of Feed and Internet products.

  D. Development timetable

The actual development should be rather rapid.  Availablilty of code and
support for Unix on platforms ranging from 386/SX PCs to 1000 Processor
engines can provide the ability to grow at the 10-20% rates.  The
modular structure allows us to "tune" the network based on shifting
demands.

Prototype servers, and related engines can be configured in a few weeks.
I was able to load and start a web server for Ultrix in about 2 days.
A development infrastructure using BSDI UNIX or Linux can be set up
in about 2 weeks.  The logistics of coordinating with network
administrators and managing the flow of traffic over the "fire-wall"
may add some additional delay.

We will also need to negotiate licenses with some companies.  The "list
price" on a netscape server using a Sun/Solaris engine can run as
high as $300,000 per year.  The hardware runs about $100,000.  This
will serve about 1 million hits/day (700 pages/minute).

The smaller, loosely coupled servers provide a very high degree of fault
tolerance as well.  This technology has been used on Directory
Assistance Systems for about 25 years with down-times averaging 15
minutes/year.

A BSDI or Linux PC, configured with an NCSA server (Mosaic), runs about
$3000/year and serves about 200 pages/minute.  Methods of delegating
work to other low-cost servers can increase this to over 800
pages/minute.  This is sufficient to service a pair of T1 links.

The BSDI and Linux hosts are also used as the building blocks for
Routers, Fire-walls, Database servers, and File servers using freely
redistributable source code provided on CD-Roms with quarterly or
monthly updates.

We will also need to negotiate licenses for payment schemes and possibly
encryption.

Since much of are content is either fielded data or SGML tagged data, it
will be fairly easy to adapt it for use on the web.  The Edgar content
can be converted to HTML using unix utility languages that can cut
development time by 80% compared to regular C development.

In effect we can return a substantial NOI at 200 pages/second ($4 to
$10/second) on increments of $10,000/server.   As resource intensive
functions are identified and specialty needs are singled out for
optimization, they can be migrated to performance specific platforms
such as Pyramid, VMS, or RS-6000.

The major development effort will be the development of Menus and
artwork.  This can be done in house, or through free-lance designers
at $20-200/page.  The interaction is similar to a game.  We will need
someone who can design an interesting dialogue.

Consistent with the "Evolutionary" nature of the internet, we should
work toward getting the first "Easy" products (market-scope, Edgar)
onto the web within 90 days.  We can add the various componants of
stock reports within 3 to 5 months.  Many of the tools for rapid
protoyping and development are provided on the reccomended platforms,
the remainder can be loaded.

The other major effort will be negotiations.  There are ways to
structure systems so that "simultainious users" can be reduced to a
very small number (under 200 oracle licenses for example) while
serving several thousand "browsers".  We do want to make sure that
we do not find ourselves irrevocably committed to paying royalties
based on each individual user coming in through the "Pool" or through
through subscription.  This could easily be a number in the millions.

  E. McGraw-Hill coordination

This cooperation needs to occur at several levels.  First, there is the
development logistics.  There have been problems with the Heightstown
routers, fire-walls, and address/routing management.  We need to have
coordination between the different systems such that we can add new
connections to our side within a few minutes, and can add accounts to
the outside within a few seconds.

The potential value of a McGraw-Hill "Pool" raises the possibility of
providing access to all McGraw-Hill publications on a "Bulk purchase
plan".  Users could purchase "Books" of a few thousand pages (remember
web pages are very small) for $30-50 and be able to access those pages
repeatedly without extra charges.  Supplementing them with dynamic
content such as S&P and PR News-Wire can manage a steady flow of
return business and new "book" purchases.

V. Resource requirements

We should begin with a prototyping system (Linux or Unix, basic service)
and a series of phased enhancments.

Prototype phase:
	A. Pentium CPU as prototype server, Linux or BSDI OS.  $5000
	B. Configure servers, routers, fire-walls.  2 Staff Weeks
	C. Httpd web server porting and configuration.  3 days.
	D. Billing system configuration - 5 days.
	E. Oracle and WAIS front-ends.
	F. Convert Marketscope menus to Web Pages - 4 hours/page.
	G. Convert Marketscope forms to Web Pages - 4 hours/page.
	H. Royalty Negotiations.
	Dependencies A:B B:CD C:FG D:H E:G
	Conversion of marketscope forms may be automatable.

Phase 1 beta:
	Stock Reports text to HTML.
	Stock Reports Graphics to JPEG and GIF.
	Royalty negotiations with 3rd parties.
	Start Billing.

Phase 1 production:
	Promotion.
	Inclusion on other databases.
	Inclusion links on strategic web pages.

Phase 2 beta:
	Edgar SGML to HTML parser.
	Edgar EDI to HTML parser.
	MarketScope Alert to HTML driver.
To: "Annie Abrams" 
cc: "CHARLES HUMPHRIES" , "REX BALLARD" ,
    reb

Subject: Re: nj tmlp project  From: Rex Ballard  Date: Thu, 29 Jun 1995 17:32:19 -0400
How the Web Was Won
Subject: Re: nj tmlp project 
From: Rex Ballard 
Date: Thu, 29 Jun 1995 17:32:19 -0400

In-reply-to: Your message of "Wed, 24 May 95 14:01:00."
             <199505241940.PAA29571@dialup.oar.net> 
--------

Annie,

Let me know if you get this.

	Rex

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