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Lopez MAMMOTH MEETS THE POST CD-ROM DEVELOPER FINDS NICHE IN PUBLISHER'S NEW-MEDIA STABLE

By Published on .

Multimedia publisher Mammoth Micro Productions is parlaying its link with Washington Post Co. into opportunities to develop new CD-ROM titles.

Flush with cash from the Post's acquisition last month of 80% of the company, Mammoth is working with a second publisher to develop a CD-ROM consumer magazine that will include advertising.

In an arrangement that preceded the Post's investment, Mammoth also is taking over all production duties for Newsweek InterActive, a quarterly CD-ROM based on the Post-owned magazine.

"There are very few people in new media who can talk intelligently about advertising and publishing and really understand what it takes to make compelling products," said Ralph Terkowitz, VP-technology of the Washington Post Co. "That's part of why we worked with them at Newsweek InterActive."

Michael Rogers, managing editor of Newsweek InterActive, concurred: "The key element in Mammoth is the same regard for quality and the same understanding of and appreciation of editorial excellence that we have. That is something not found in all software publishers."

Mammoth was founded six years ago. Chairman Tom Lopez, 51, came from Microsoft Corp., where he was VP in the CD-ROM unit, which had acquired a company involving Mr. Lopez and Mammoth co-founders Bob Ogdon and Frank Johnson.

Their multimedia encyclopedia eventually evolved into Encarta, Microsoft's CD-ROM encyclopedia.

Mr. Lopez had previously worked in account services at J. Walter Thompson USA, handling Sprint and Activision. Although most Mammoth operations are in Golden, Colo.-where Mr. Ogdon likes to ski-Mr. Lopez chose to remain in Seattle after leaving Microsoft.

"We were approached last year by several major media companies," Mr. Lopez said of the Post acquisition. "We decided that over the long term, the [multimedia] industry would shake out as other industries based on intellectual property have-books, records, video and movies.

"We decided we would really be better off aligned with a major company rather than play it on our own forever," he added. "We were looking to gain stability."

Mammoth enlisted investment banker Hambrecht & Quist, San Francisco, to find a partner, but in the end opted for the Post, which it had known through work on News- week InterActive.

Mammoth, which previously produced a version of the Newsweek disc for Sony Corp.'s multimedia CD players, will produce one disc that works for both Windows and Macintosh PCs. The next issue will appear in September.

That issue will feature a new ad format and more advertisers than appeared on previous discs. Business Manager Hans Widler said the number of advertisers has not been determined, but the ads will be more visible and easier to access than before.

Charles Schwab & Co. and General Motors Corp.'s Chevrolet advertise on the current edition, while AT&T and Ford Motor Co.'s Lincoln-Mercury division appeared in earlier issues.

Both sides insist Mammoth, with 50 employees and plans to double that by yearend, will operate independently.

The alignment also will let Mammoth publish its own line of multimedia titles. Mammoth's credits include annual reports for Oracle Corp. and R.R. Donnelley & Sons, multimedia Yellow Pages for U S West and a consumer product catalog for Sony Corp.

It's now working with Turner Home Entertainment on a game called Pagemaster, to be released this fall in conjunction with Turner's $35 million animated and live-action film of the same title, starring Macaulay Culkin.

"Mammoth Micro has ongoing relationships with Turner and other companies," said Mr. Ogdon. "We intend to evolve and have deeper and longer relations with our customers."

Mammoth is interested in linking CD-ROMs with online services, including the Post's new Digital Ink Co. electronic publishing subsidiary.

"We're looking to build in an online component so advertisers have feedback for market research, transactions, names and addresses," said Mr. Lopez.

For its own publishing efforts, Mammoth will produce a line of products, rather than single titles.

"The retail channel needs to be able to expect a continuing flow of quality products. It takes major resources to pull that off," said Mr. Lopez, who anticipates doing magazines as joint ventures with publishers, perhaps later this year. "It could be print first, or it could be a TV magazine."

He's also shopping for how-to and entertainment titles.

"We would be looking at products that would be somewhat heuristic, that would adapt to your responses throughout. They would infer from your actions-if you like a romantic character, it would have a greater role in the story line. Everybody could have different experiences with the products."

Mr. Lopez said he hopes to have an entertainment line on the market by the end of next year.

The Post Co. sees synergies between its print properties and Mammoth's software skills.

"Fundamentally we think that Mammoth provides some of the needed skills for us and offers us opportunities for moving beyond that of our traditional print franchise," said Mr. Terkowitz. "We've found they understood far better than most software companies what it means to produce quality editorial content that tells a story, integrates advertising well and can be delivered on deadline."

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