March 15, 2004 10:45 AM PST

Software start-up mines Explorer niche

Software start-up Onfolio officially launched on Monday and released its first product, a package of browser-based tools with which it aims to capitalize on the growing number of people conducting research over the Internet.

The content aggregation application, also named Onfolio, builds an extra pane into Microsoft's Internet Explorer browser. Web surfers can create a separate collection of bookmarks or folders in that pane, and then share and publish the information stored there, according to the company.

"Over the last three years, there's been a huge increase in online research, driven by more powerful search technologies such as Google," said J.J. Allaire, the founder of Onfolio. "Yet people are using the same kind of (browser) tools on the desktop that they had in 1995. People have some combination of bookmarks, or cutting and pasting, but we think this is a smarter way to organize information."

The Onfolio application is available in two versions--Standard Edition and Professional Edition--on sale directly from the company for $29.95 and $79.95, respectively.

Onfolio is looking to create a new niche for what it calls "search information management" software. The question is: How many buyers will be willing to pay $30 for a more powerful bookmark system? Allaire said he believes that demand will develop, as people are increasingly asked by employers to use the Internet to conduct research and prepare reports based on their findings.

The base of these so-called knowledge workers is expanding rapidly and includes students in every level of education, Allaire said. In addition, a recent America Online/Roper Starch Cyberstudy survey found that 91 percent of Web-using Americans conduct research on a regular basis, making it the most common online activity for consumers, he said.

"It's a myth that no one pays for software online, as there are already gigantic companies like Microsoft proving that consumers will pay to add new productivity tools," said Onfolio's president, Adam Berrey, a former Macromedia executive. "We don't think $30 is a huge barrier, compared to the level of functionality that's being offered."

The Onfolio software enables people to save images, documents, snippets of text, personal notes and entire pages found on the Web. Users can perform keyword searches on the data amassed, which they can't do in IE, according to its Cambridge, Mass.-based maker. The Professional Edition also offers a publishing tool designed to let users create reports and Web sites from any saved content.

Peter O'Kelly, an analyst at Burton Group, sees a chance for Onfolio to succeed where many failed in the late 1990s, when Web sites and software makers attempted to cash in on the growing popularity of the Internet by introducing online productivity tools.

"This isn't going to be the next blockbuster, but there is a potential for profit growth," O'Kelly said. "We increasingly see people moving back to the traditional model of buying software that can offer real benefits, and this could be a good example of a specialized market opportunity."

Another challenge for Onfolio could be Microsoft itself, if the software giant decides to build similar data organization and sharing capabilities into future versions of IE.


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O'Kelly believes that as Onfolio has designed its products tightly around Microsoft's .Net Web services architecture, Microsoft is less likely to aggressively pursue comparable functionality--but it's not a certainty.

"This is a specialized market, versus Microsoft, which wants to reach every user," O'Kelly said. "But you don't know. They will certainly pay close attention, and this sort of application could eventually get on their radar."

 

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