RealNames CEO Talks Back

jasoncart writes: "Keith Teare, former CEO of RealNames, has updated his homepage with his opinions regarding his the companies downfall. Obviously he's annoyed as he has lost his job, but he makes some good points about Microsoft's monopoly - 'Microsoft seems to be playing the role of the referee who decides whether any innovations succeed'"

Comments

Lay down with dogs

[mangu]

And wake up with fleas. What he tried to do was out-micorsoft Microsoft at their own game, which is changing internet standards in proprietary ways.

In Case it gets Slashdotted

[Anonymous Coward]

Its running a bit slow, so here is the text of his message: (I'm maxed out in karma, but I'd rather not be called a karma whore ;) )

This is my personal web site and all opinions here are my responsibility and mine alone.

Last Tuesday Microsoft informed me that it was not renewing RealNames Corporation's contract to resolve Keywords in the IE browser. When the current contract comes to an end on 28 June 2002 the service will be terminated.

I am no longer an employee of RealNames. Along with 79 others I was terminated on Friday 10 May, 5 years after starting the company.

I am sure that Microsoft will do an excellent job of misinforming the public about the reasons for this decision and so I want to put the record straight.

During the past 2 years Microsoft was GIVEN 20% of RealNames stock and $15m in cash guarantees during 2000-2001 (more than 100% of our revenue that year). We were due to pay another $25m in guarantees during 2001-2002 (more than 200% of our revenue that year) but with the bursting of the bubble (and thus no IPO) the second years payment was converted to a note. The note came due on May 2nd 2002.

RealNames proposed continuing the relationship and offered Microsoft the following:

1. $5m now as payment against the note.

2. $5m between July 1 2002 and June 30 2003 or 15% of revenues - the greater of. 3. Microsoft's rev share to be able to reach 40% in steps if our revenues grew sufficiently. The guarantees for the first 5 years of a new deal were $5m, $6m, $7m, $8m and $9m.

We valued a 5 year deal - if Microsoft would execute on all of the opportunities - at $200m to Microsoft. Far more than the guarantees. At their current PE of 40 that is worth about $2.4 billion post tax in a $100m year 5.

VeriSign had just committed to a plan to give every com, net and org customer 5 free promotional Keywords for 30 days. This would have resulted in widespread awareness and great revenue boost.

RealNames was succeeding. We had 3 quarters of growth behind us, we broke even on a cash flow basis in Q1 - for the first time. Usage was growing (500m resolutions in Q1).

The justification we were given by MSN was:

1. It isn't about money. Even if you paid we would not renew.

2. We do not believe in "Naming", we believe in search. This is because we control search 100% whereas we could never control naming. Some of us believe search results are a better experience than navigation through naming. Sure the URL and the DNS are broken, but to fix it is a big job with no clear reward for Microsoft.

3. The recent public discussion indicates that .NET initiatives which take the form of architecture are greeted with hostility if delivered by Microsoft. So, we could never own this. If it worked, and we liked it we still wouldn't do it. Therefore the plan to put 120m free Keywords out there is our worst nightmare. It would be "out of control".

So far as I can see this is a classic case of "not invented here". Microsoft dislike the product because they cannot control it. As this is likely to be the situation wherever infrastructure [which is by definition shared] is involved it also implies Microsoft is stepping back from its .NET commitments to build infrastructure.

In this case the widespread use of the browser and its absolute requirement for our system means that Microsoft's decision has resulted in innovation being stopped. The only naming technology in the world capable of allowing non-ASCII characters to be used as web addresses is being killed at birth - before it succeeds and becomes "out of control". A small private company is being denied an audience - not because of money - but because of fear of losing control. If Microsoft wants to become a major player in internet platform technologies it will have to overcome this fear. What is shared cannot be controlled.

As a former very vocal supporter of Microsoft (see http://www.realnames.com/body/pressreleases/pr_060 700.asp) I am bitterly disappointed by the lack of vision I encountered. I truly hope that the Chief Architect - Bill Gates - and the CEO - Steve Ballmer - are aware of the narrowness of the vision - the defence of search and the URL [ASCII based naming] against a truly global and multi-lingual naming platform with built in directory services. If they are not then a crime has happened under their noses.

Naturally I'm pretty unhappy about this.

Microsoft seems to be playing the role of the referee who decides whether any innovations succeed .

Microsoft only seems comfortable at the application level where they have control, not at the infrastructure level - and this ultimately keeps many innovations from happening.

Because of this they've just brought innovation in internet naming to a grinding halt - and the internet *really* needs innovation in naming.

RealNames will not be the only victim - there's a whole ecosystem that stretches all around the world that Microsoft is turning off. CNNIC in China, Forval in Japan and other companies in Belgium, Holland, France, Finland, Sweden, Denmark and Finland. There are more than 100 registrars of Keywords and they in turn have thousands of resellers. There are more than 100,000 customers including many well known ones like IBM, Xerox [who made RealNames partner of the year last year], EBay, Mattel - who have Keywords on every Barbie Box, and many more.

Now, Bill Bliss - who runs MSN Search and was until recently in charge of the RealNames relationship, has in the last few weeks been moved to "Natural Language Platforms" and is charged with developing a variant of our system. The browser is now back under Microsoft's control and it is possible that - having learned much from RealNames - it will develop its own version of our resolution service.

Re:Sour Grapes...

[Dominic_Mazzoni]

Geeks who speak English have little reason to need RealNames.

However, the same can't be said for average computer users whose native language can't be rendered in ASCII (i.e. most of Asia). RealNames made it possible for them to go to websites by typing in words in their native language, instead of words in a character set they may not be familiar with.

Re:If you choose to dance with an elephant...

[raju1kabir]

I take exception to Teare's comment:

The only naming technology in the world capable of allowing non-ASCII characters to be used as web addresses is being killed at birth

Also you might want to take exception to the lack of factual basis. Plenty of TLDs already support non-ASCII characters in DNS, and have for some time. Check out, for example, NUNIC's Worldnames project.

Google has several search language options

[marhar]

Go to http://www.google.com/preferences, and you can choose from among dozens of languages to search in, including 16-bit languages.

RealCEO with Unreal Expectations

[KFury]

If you don't want Microsoft to referee the success or failure of your innovation, then don't create innovations which depend on marketing and implementation deals with Microsoft for their success.

RealNames was a marketing ploy, taking advantage of Microsoft's dominance above actual internet standards, and exchanging that monopoly for material gain. The fact that it failed is a testament to the capability of standards over proprietary schemes, and is hardly an example of the evils of Microsoft's monopoly.

The evils of Microsoft's monopoly is the reason RealNames existed in the first place, not the reason it was torn down.