Where Webcasting, conferencing meet

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Webcasting has been something of a disappointment in the past year. Some Webcasting companies simply couldn’t make a business of it. The failure of and the problems at iCast Corp. seem to indicate there is little demand for the Internet as TV. Yet one version of that technology is finding a real home in the b-to-b market.

Lewis Ward, senior research analyst at Collaborative Strategies L.L.C., a market research firm in San Francisco, calls this boom market “Web conferencing.”

Web conferencing is similar to Webcasting in that participants can view audio and video. But with Web conferencing, participants can share data files and pass control along from one person to another. The difference might be equated to an audience watching a stage (a Webcast) and a group sharing information around a table (a Web conference).

"It’s not TV and it’s not radio," Ward said. "You’re live with other people. You can co-edit documents, pass the baton" and thus control of the conference, interacting as thoroughly as if you were in the same room.

By combining browsers and thin client software—software that adds a thin layer of functionality—from companies such as WebEx Communications Inc. of San Jose, Calif., and Placeware Inc. of Mountain View, Calif., dozens of firms are building a great new market, he said.

There are many ways to do this, Ward said. WebEx acts as an application service provider that hosts meetings through its servers. Placeware sells software but also hosts some conferences through its site.

Microsoft is missing

This is a market Microsoft Corp. seems to be missing.

Ward said Microsoft’s NetMeeting software, which is part of Windows, requires too much bandwidth, has problems with firewalls and won’t work with earlier versions of itself. While it has millions of users, Ward said, its use is limited to "grandparents using it for free long distance to the kids."

Web conferencing should be a $1.9 billion market this year, and it had 18.6 million users in 2000, mostly in businesses, Ward said. That’s smaller than the $5.4 billion to be racked up by video streaming in 2001 or the $3.2 billion to be spent on audio conferences, but "it’s growing at 74% per year," he said, faster than the other segments.

In 2003 Web conferencing should be a $4.5 billion market, the same size as audio conferencing. Vendors are seeing growth of more than 70% per year and resellers who help with system integration are growing at more than 90%.

Web conferencing can combine several different technologies. It has aspects of groupware, it often uses project management software, it can make use of instant messaging tools and it can be delivered directly through ASPs. Content streaming and voice over Internet protocol technology may also become part of the mix.

A Web conference is truly interactive, Ward said. Computer files are shared and annotated in real-time. "It can be used for collaboration within an organization, for training, for sales demonstrations, academic distance learning, for technical support and in project management," he said.

Most data conferences actually take place on the public Internet, in paid seminars and on corporate intranets, Ward said. That should change as more businesses acquire the necessary tools and bandwidth.

Saturation could also bring marketers more directly into Web conferences, predicted Austin Whitehead, research director for b-to-b markets at the Gartner Group Inc., San Jose, Calif.,

"One thing we’re looking at is what is the applicability of some of that technology, and where does it play in advertising, promotions or providing market data," he said. "There’s still the question of how to use it" in marketing.

Savvy marketers will start finding answers to those questions now.

Dana Blankenhorn is a free-lance journalist who specializes in Internet issues. He is publisher of the Web site

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