This Week's Clue: Super Mario Grows Liver Spots 

Summer Travel Season 

Untold Stories From Big ISPs 

You Need A Personal Encryption Key (But You May Not Get It) 

Objects Coming 

Clued-in, Clueless

 The video game industry spent the recent E3 show in Atlanta in heavy spin mode, like the White House after a bimbo eruption. The Big Lie in this case was summarized by DataMonitor, a British market research firm, predicting that online gaming will spur the industry to new heights . 

It's a lie because it's already failed. Internet sites charging hourly for advanced, multi-player gaming simply failed to break through. One reporter  gave me the industry line that demand will explode with more bandwidth - News Corp.'s Kesmai unit and Microsoft certainly hope so - but I'm no longer so certain. While nearly every E3 exhibitor this year has a Web site, most are virtual trade booths, with demos, press kits and downloadable wallpaper. The most successful gaming sites are news bureaus or adjuncts to existing CD-ROM products . 

Throughout the industry console makers are losing power to software publishers. The biggest press conference at this show spotlighted Squaresoft, a Japanese game maker, and Electronic Arts, a U.S. game maker, translating and distributing their products in each others' markets. The "big three" of Nintendo, Sega and Sony have also reshuffled - it's now Sony, Nintendo, and Sega - and there was little talk of 64-bit replacements for products like the Sony Playstation. Sega took the hardest fall, failing to develop compelling PC software while its game player turned obsolete. 

The problem is most games involve, as my six-year old son John put it, "shooting and running away." As a result the playing public is aging, and my kids aren't interested in replacing them. Even if you're "playing" someone else, you're really playing against the screen, trying to manipulate a sprite based on rules imposed by buttons. Unless you have the bandwidth to put the kid you're playing against right next to you, in other words, you haven't added much. Even the "force feedback" feature first found in the Microsoft joystick, now common on game consoles, is just a joy buzzer - it pales quickly. The news is worse for the makers of kids' learning games - schools have learned that Microsoft Office and a Web browser represent the best bang-for-the-buck as learning tools, even when prices drop under $10 per CD. 

The most promising trend is the rise of "girl's software" by independent publishers like Purple Moon . They've used the Web right, as an interface with their kiddie customers, who ask questions of characters like "Rockett" and get answers that help in their own growth. Beyond that small island, even this category is a wasteland - Barbie Makeovers, Cosmopolitan Makeovers, Essence Makeovers. The whole category needs a makeover. 

Here are your Clues. The PC has won. Fast-twitch button pressing is looking more and more like work, and for the Internet, that's a very important Clue indeed. 

It's summer reading season for you, summer writing season for me. Last summer I created a little ditty called "The Time Mirror: Or What Can You Do With a Pentium II" and we've got it posted here . We're also going to serialize the sequel, dubbed "Time Stands Still," continuing the adventures of Rice University  professor Richard Smalls. Hope you enjoy it, and if you think it's worth killing trees over let me know. 

You can now subscribe (or cancel your subscription) to A-Clue.Com automatically by emailing us at a-clue@list.mmgco.com or (if you prefer the .txt version) aclue_textonly@list.mmgco.com. Just put the magic word "subscribe" (or join, if you prefer) in the body or header. If you don't get service, of course, feel free to drop me a note at dana.blankenhorn@att.net. And we want your feedback  as well, always. In time you'll also see an ad in this space (or very near it) to defray our higher costs. (You won't mind, will you?) 

As usual, I'm also talking to lots of new publishers, including Boardwatch  and the Chicago Tribune  and you can be one of them. Remember that it's Journalism -- checking the news, calling people, listening carefully, writing on deadline -- which keeps the Clues coming, although I also handle consulting and commercial writing (ask about those rates via email). If you're looking for excellent work, as found in Atlanta Computer Currents , at PlugIn Datamation  or in Net Marketing magazine , among other locations, don't wait for the email -- give me a call at 404-373-7634. 

And now back to our show... 

Summer Travel Season  

My next-door neighbor, an Emory MBA candidate, has taken a summer job with a travel agency, charged with delivering an Internet strategy. Before he left for work, I offered him these Clues. 

This is a troublesome world for everyone involved. Airlines are cutting commissions, so agents either impose surcharges or (more likely) go under. Sites aimed at using the Internet to cut costs  face direct competition from the airlines , which own the underlying reservation systems as surely as Microsoft controls the PC desktop. Microsoft's own willingness to cut its commissions  has only spurred the airlines further toward crackdowns -- and heavy net competition. 

In the U.S., the supply-demand equation this year favors sellers. There are fewer good deals, according to Best Fares , and increasingly they're only on the airlines' Web sites , with direct connections to inventory databases and complex "yield management" software that adjusts prices immediately. The best advice for travelers is to stay flexible and try auctions . 

So what should our neighbor do? While he said his agency's most interested in the consumer business, I suggested he go instead to his biggest business customers, delivering online ordering integrated with the clients' accounting and control systems. Concentrate on the businesses, not the travelers, giving them good reason to centralize booking with his agency-employer and keep executives from doing-it-themselves, which they're prone to do. Finding the new bargain hunting tools and training agents to use them will also save the clients money, I suggested, capturing savings without costing clients the time spent looking for them. Protecting the big business will give agents time to improve their online offerings to smaller clients - and the Clues derived from big clients can always be applied down-market. 

Untold Stories From Big ISPs  

The big story in the sale of MCI's backbone network to Cable & Wireless isn't whether it works for the trustbusters (it probably does) or whether it's a good deal for C&W (it undoubtedly is). It's the untold story of what this really means for Worldcom  and its future. 

Put simply, Worldcom has put all its chips on a nag - John Sidgmore of UU.Net . The key Clue here was the launch of a major (and Clueless) ad campaign, on UU.Net's behalf, right after the C&W deal was announced. The fact is MCI had a better network, and better marketing, than UU.Net ever dreamt of having, but you can expect most of those top people to move on now. Instead, Sidgmore will try (unsuccessfully) to turn his backbone market share (and the fine print in the C&W deal) into a stranglehold against smaller ISPs. It's a shame he won't take a lesson from his corporate spokesman, Michael Jordan - playing hard, playing smart, and getting the most from those around you is what wins titles. 

Meanwhile, Sprint  has bet the company on a "Fast Break" strategy, in which $400 xDSL boxes at customers' sites measure megabits, and per-minute pricing (even for voice) disappears. Forgotten in the hubbub concerning voice-over-IP is that existing voice players can use it as well as start-ups can, and Sprint has now put $2 billion  (bypassing  major equipment suppliers like Lucent ) to do just that, with a persistent connection based on xDSL technology. But this won't roll to residential customers for at least a year. This gives the regional Bells  time to lock-in their monopolies before consumers learn they have choices. Unless Sprint can pick up some major account wins in the next year, this will be a technology trend and not a business story (although what a big trend). In other words, all AT&T needs to do needs to do is make this a half-court game, then press, to keep its title. 

You Need A Personal Encryption Key (But You May Not Get It)  

A Digital ID can be a wonderful thing, but if the FBI continues getting in the way you'll never have one. 

The National Automated Clearing House Association , which helps set the rules for the banking system's payment networks, has launched a test of personal Digital ID technology with, among others, Verisign, Citibank  and Bank of America. Verisign and its rival, GTE's CyberTrust  hope to sell you an "Internet Credit Card" claiming to offer more security, but actually providing more protection to merchants, than today's SSL technology. 

What's in it for you? Without a Digital ID, the Social Security Administration  can't really provide access to your account because it can't be certain that's you on the other side of the line. Same thing with your hospital and your medical records, or any other form of e-commerce where proving that you're you is critical. The keys must be available so merchants can validate your identity. 

The technology is becoming a no-brainer, and the business case is compelling, but it may never happen because FBI Director Louie Freeh is bound by his agency's bureaucratic inertia. While the White House and Justice Department - even many Congressional Republicans , support strong encryption, the FBI won't let it happen unless it's guaranteed it'll get the keys whenever it wants. Like it or not, that won't happen, and no amount of "summiting", which Freeh plans to engage in this week, will change that. Even if he does twist Bill Gates' (for example) arm into giving him access to your digital keys, he can't make me (or you) get a digital key under those rules. It's a tough political nut to crack - both parties are divided on the issue - and it's likely to crack only when our trading rivals start reaping the benefits of this technology without government interference. 

Objects Coming  

Objects are a key technology for the future because you can't hand-write big applications. You've got to build them from big hunks of code or the cost eventually becomes prohibitive. 

It's a problem for all software companies, and all Web stores that want to compete. Now NetObjects  has taken a step toward offering true object compatibility, along with Breakthrough Software  and iCat . NetObject Fusion objects will integrate with the latter two companies' offerings. If this gets just a few big wins , it could prove to have been the biggest story this week. 

Clued-in, Clueless 

Clued-in is Hotbot , the first portal to figure out that commerce means more on the Web than advertising. Wired Digital has just one or two quarters to make money or attract capital, now that Conde Nast has bought the magazine, and this is the direct route. The HotBot Shopping Directory includes a number of online commerce partners and a price-comparison feature, HotBot Shopping Bot, developed with technology from Junglee Corp. 

Clueless is the National Football League , which signed a three-year contract worth just $10 million under which Disney's ESPN  will continue to produce the league's Web site. If Starwave, as expected, integrates ticket and merchandise sales onto the site, it'll have the biggest rights steal of the decade.