Hearst said it plans to launch HomeNet, a family of interactive products covering home design, maintenance and decorating, later this year. HomeNet will appear first as a computer online service and CD-ROM collection and later as a TV-based interactive service.
Hearst also said it bought a minority stake in Palo Alto, Calif., software company Books That Work. Hearst and Books That Work will co-publish computer software that will be based on Hearst magazines and contain ads from Hearst advertisers. Books That Work products will also be distributed through HomeNet.
The two deals come on the heels of Hearst's January announcement that it would participate in Groupe Videotron's two-way interactive TV test in Chicoutimi, Quebec, starting next year. Hearst plans to offer HomeNet for that test, as well as directory and transactional services.
All three initiatives come under the purview of Al Sikes, who has been moving swiftly to bring Hearst into the interactive realm as president of the publisher's New Media & Technology Division.
Hearst's first software project with Books That Work is due out later this year and will be tied to one of the publisher's home magazines, Mr. Sikes said. Hearst's roster of 14 consumer magazines includes three home titles-House Beautiful, Country Living and Colonial Homes.
Mr. Sikes said the software publisher's work with interactive advertising caught Hearst's attention.
"We've had a number of advertisers who do business with Hearst who've talked to us in the last four or five months and said [they would] very much like to be part of interactive projects," he said. "So that clearly will be a part of what we do."
Books That Work has published two home improvement guides on disc, Design & Build Your Deck and the Home Survival Toolkit. Both contain ads from companies like Black & Decker Corp. and Kohler Co.
But convincing ad agencies to consider placing clients on computer software has been difficult, said Kelly Anthony Rodriques, the software company's VP-marketing and a former executive at Ogilvy & Mather, San Francisco.
"We have not sold one of these programs when we've talked to the agencies, and I don't think it's because the agencies know a lot more than the advertiser," Mr. Rod-riques said.
He said agencies got with the program only after their clients had signed on.
"It's almost like they become yes men," endorsing the interactive software medium only at clients' behest, said Mr. Rodriques, former western division director of Ogilvy's Interactive Marketing Group.
Hearst's existing relationships with ad agencies could help Books That Work negotiate that hurdle a little easier.
Mr. Rodriques acknowledges that a non-traditional medium like software advertising is hard to measure and sell. Books That Work charges $20,000 to $25,000 to advertise on all the copies of a particular title that the company ships in a year. Advertisers must also put up about an equal amount for promotions, consumer rebates or other marketing.
Ads appear as billboards on the corner of the screen, and users are invited to click for more information. One of the more ambitious efforts: An ad for Archadeck, a franchised deck builder, asks for the user's zip code and then searches a database to list a nearby dealer; the ad also can use the PC to calculate the monthly payment for a given deck.
Within a year, Mr. Rodriques said, consumers will be able to use a modem to order products seen in an ad.
Consumers who pay $30 or more for Books That Work software may be surprised to find ads. in the program. But Mr. Rodriques said they hold down the price and provide useful information.
The deal with Hearst is non-exclusive; Books That Work will continue to publish titles under its banner, and Hearst is considering forming similar relationships with other software developers.
As part of the deal, Hearst will provide marketing, distribution and development assistance, said Stuart Gannes, chief executive of Books That Work. The software company will get discount ads in Hearst publications and access to Hearst lists for direct marketing, he said.