Microsoft will kick off in its hometown of Seattle during the first quarter and then expand to New York, Boston and San Francisco.
CUC International, Stamford, Conn., will have sole responsibility for local ad sales; it will use the sales force of its Entertainment Publications unit, which produces discount coupon books in 110 cities and has relationships with more than 100,000 local merchants.
The service itself will handle regional ad sales, such as key retailers. The sister Microsoft Network will court national advertisers, such as movie studios and airlines.
Rates aren't set, but deep-pocketed Microsoft appears more focused on long-term potential than short-term profits.
"This whole `learn with a leader-see what's going to be successful' is something that we want to encourage," said Richard Tait, group marketing manager for what has been code-named Cityscape. "Our pricing and our advertising inventory are really being designed to encourage participation."
Microsoft last week was still debating a name for the service; Cityscape is already in use by others.
`NOT TOO FAST'
Microsoft will invest in technology and editorial content, but it will "not try to roll out too fast," said Mr. Tait.
The service will be in "at least" the four announced cities by mid-1997, he said, but "we're just going to see how it goes" and "add more markets as we hire great people."
"We think this is going to be a marathon and not a sprint," he said.
Cityscape will focus on entertainment, targeting a 25-to-40-year-old group that Mr. Tait said accounts for about 60% of U.S. entertainment spending.
Michael Goff, founder of gay magazine Out, has come aboard as national editor in chief. But 70% of editorial content will be locally produced, with each site having a distinct look.
Eric Etheridge, founding editor of George, will be executive producer of the New York site. The Seattle site will be managed by former Seattle Times Arts & Entertainment Editor Jan Even.
Microsoft is developing the first site with partners-alternative paper Seattle Weekly and a producer of a restaurant guide.
It is seeking partners in other markets, Mr. Tait said, adding: "We're certainly not dependent on having a partner to enter a market."