Portals on new search

If much of the Web's future is headed toward television, as many believe, what will become of today's Internet portals?

Executives at Yahoo, America Online, Excite, Lycos, and other top portal companies are bullish on this new market potential, looking to expand their brands beyond personal computers. As more household appliances get wired, portals could become more mainstream, they say.

But questions remain whether the Internet heavyweights of today will be the controlling forces in the onset of a next-generation digital boxes and other devices combining television, phone service, high-speed Internet access, and myriad other features. Although portals have become almost synonymous with the Internet, the short life span of their industry has been directed at personal computing, not television or telephones.

"People who make TV sets, people in the cable industry--they don't think in the same way that computer players do," said Josh Bernoff, an analyst at Forrester Research. "The computer power base walking into the TV space will find they're in a foreign country."

As it stands today, the Internet landscape is dominated by many companies that began as search engines and have expanded to become a one-stop shop for a broad range of services and features, including free email, chat, instant messaging, communities, and news headlines.

Outside the PC industry, however, the notion of a portal can take on an entirely different form. Companies that make cable television set-top boxes are developing electronic programming guides that could serve as a combined PC-TV portal, for example, and broadcast networks have begun developing interactive screens that link to the Internet.

Some analysts believe that TV viewers want to receive information in a more passive, simple format with rich audio, video, and graphics. That's why high-bandwidth access may be one the first crucial steps for the Internet to appeal to the TV viewer with information that is not based mostly on text.

"With television, life gets more complicated. The fact that it's so ubiquitous means there may be more opportunities to get access through them to other things," said Ron Brachman, research vice president for AT&T Labs. He also sees fundamental differences in the ways the Internet and television are used.

"On the Web, it seems, most people are creatures of habit--they go back to the same places and probably don't change their home page too much," he said. "But think of cable television in a hotel--a converter box resorts you to the hotel screen first. The fact that you and I find that aggravating means that we might find alternatives."

Even before the widespread acceptance of so-called convergence devices, the Web portals are facing a critical challenge from such services as @Home and and Time Warner's Road Runner, which have teamed up with cable television systems to provide Net access using high-speed modems. Analysts expect cable Net technology to outpace its main competitor, copper phone connections known as digital subscriber lines.

Providing connections more than 100 times faster than the standard 28.8-kbps dial-up lines, these cable modem companies have begun to use their own interface based on these high speeds--essentially creating their own portals and bypassing their Web counterparts.

That would certainly put a damper on expansion plans such as the "AOL anywhere" campaign that aims place its interface in every Web-enabled device in a household, from appliances to television sets. All of these gadgets will link to one broadband connection that America Online will also supply, according to Barry Schuler, president of AOL interactive services.

"We think people want one service that takes care of all their Internet needs and have access to their services from many different platforms," Schuler said.

It is true that subscribers to these cable services can simply change the default home page to another Web portal. The question is: Will they?

"I don't think the main portals are providing the services that mainstream consumers need," said Richard Gingras, @Home vice president and editor in chief. "I don't think they, in their present states, are offering the services that a set-top user may want to use."

Publicly, portal executives express confidence in their desktop business model. "We still see the PC as being the primary access device for folks," said Jeff Mallett, Yahoo chief operating officer. "We will be the one to evolve from the dial-up market."