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March 20, 1996

Company to Launch National Web Development Chain

If a company wants to build a Web site today as a marketing and sales tool, it generally turns to a boutique that specialize in Web development. The boutique, in turn, hires out graphic and systems designs and network access to other concerns, most of which are also small businesses, locally operated.

One company is gambling that the medium has now outgrown that sort of cottage-industry approach to site building and is ready for a turnkey Web site developer that can operate on a national scale.

The USWeb Corporation, a tiny startup with a large cache of investors, is setting up a nationwide chain of Internet service centers in an attempt to provide one-stop shopping for businesses that want to set up their own Web site.

Gambling on the notion that medium and large corporations will quickly outgrow the collection of small, entrepreneurial companies that are often their only option today, the USWeb Network will provide a standardized set of Web services nationwide, including consulting, management, training and design, and will even serve as a host for companies' sites.

It's a familiar model for business customers, and one whose arrival was just a matter of time, said Joe Firmage, a former Novell executive who is chairman and CEO of USWeb, which is based in Santa Clara, Calif. Business customers prefer to do business with a national network of suppliers, much like they do for other services, like information systems and publishing, he said.

"We'll be providing a service that has existed in every other prior media," Firmage said.

Financed by $17 million in venture capital, the company is a joint venture with Ziff-Davis Publishing, the computer publishing company owned by the Softbank Corporation of Japan. Sheldon Laube, formerly the lead technology executive at Novell and a former Price Waterhouse executive, recently joined the company as chief technology officer.

Many industry analysts agree the idea a chain of full-service Web site development centers is a sound one.

"The argument that business customers will want someplace to go besides a Cybersmith cafe is pretty compelling," said David Yockelson, vice president at the Meta Group, a market research and consulting company. If the company succeeds in establishing enough centers with the right kind of expertise, Mr. Yockelson said, "I think they'll get people knocking down their door."

But first, the company faces a formidable task of setting up such a chain at a time when the Internet business is evolving quickly and new competitors are appearing constantly.

Ted Julian, Research Manager for Internet Commerce at IDC in Framingham, Mass., pointed out that traditional information systems consultants are eyeing the same business and that many entrepreneurial companies have already built successful businesses selling their services to corporations.

Julian added that telecommunications vendors that offer Internet access, like Sprint and MCI, could conceivably move into the Web consulting services as well.

To get up and running more quickly, USWeb will ally itself with established Web service providers, including designers and trainers, rather than start from scratch developing an entirely new business, a plan that Julian said would be key to the company's success.

Firmage said that USWeb Network will grab a head start by being the first to offer companies a single contact for every aspect of Web site development, including access and hosting.

"We want to provide a single answer to the question, Who are you going to call?" Firmage said. He added that the company would set up shop in locations not currently served by high-quality Web service providers.

Firmage said his goal was to have at least 65 franchisees by the end of the year, eventually expanding to between 200 and 300 centers nationwide.

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