Friday, July 30, 1999

The Cyber Scene in Austin ~ By Will Kreth

This week in Austin saw the long awaited launch of, the furniture and home furnishings site that Starbucks just put US$20million into. Headed up by iChat/Acuity veteran Andrew Busey, it's estimated that there are about 120 people practically "living" over at Living. At the last CyberScene event in Austin, I asked V.P. of Marketing Stephen England if was, in effect, "a Pottery Barn on the Web?" England replied that "yes, one could call it that" - which is kind of funny, when you consider that Pottery Barn is owned by Williams-Sonoma, another company that Starbucks CEO Howard Schultz has had his eye on, as he seeks to diversify beyond roasted beans and barristas. (Nothing like a comfortable chair to curl up in with a copy of "Joe" and a tall, skinny Mochaccino, is there?) Hey Andrew, could you sell me one of those cool chairs that Dr. Evil has in his Space Needle/Starbucks World H.Q.?

Pay the Doctor, and Call Your Broker in the Morning
In other Austin "Internet play" news, CBS agreed to take a 20 percent stake in the privately-held - in exchange for US$37.5 million in advertising and promotion inventory. Continuing a trend in "ads for equity" - this one of a handful of similar deals CBS has worked of late. Currently selling brand-name over-the-counter health, wellness, and vitamin products, will begin selling prescription medicine sometime in late 1999. Over at, they're grooving on both their zooming IPO and their latest four-year, US$89 million deal as the sole health care [information] provider across all the AOL brands. Paying for the privilege of being on AOL - well, I hate to sound like an old Net fart, but I can remember when it used to be the other way around. Of course, the amount of money AOL paid companies to be "on" AOL was nothing like the sums we've seen flowing the other way of late.

Not Just a Boxy Town Anymore
Beyond the fact that all this paper wealth is changing hands lies the reality that Austin is starting to shed the "hardware-centric" label that the phenomenal Dell years have unconsciously bestowed upon her. Certainly, the software success of local old-timers such as Tivoli and Trilogy (with their legendary "Vegas-style" employee recruiting efforts) are well-known in high-tech circles - but today, there are dozens of "Internet-play" companies in the Austin area, and a raft of them are less than two years old.

With more reports continuing to come out that show Austin poised for great success in new Net businesses, it's a little surprising that CEO Tom Phillips decided to move his company from Austin to NYC late last year. However, exemplary of a countervailing trend was's recent success of landing Shawn Holliday, former managing director of Guinness Ireland, for their CEO post. Welcome to town, Shawn! Perhaps we could discuss our new city over a pint at Courtney's local soiree next week. %^) And that's all this week from Austin, where both the weather and the people are always warm, sometimes hot, but never, never cold!