Challenging MSNBC   

Bill Gates, the cofounder of Microsoft, is æhe wealthiest man in the United States and a household name. Paul Allen, the other cofounder of Microsoft, is the third wealthiest man in the United States, and few people outside of the Pacific Northwest have ever heard of him.

Gates and Allen went to Lakeside High School in Seattle and together formed Microsoft in 1975. But Allen left the company in the 1980s when he was stricken with Hodgkin's disease. After he recovered, Allen created his own business, purchasing the Portland Trail Blazers basketball team, Ticketmaster and a chunk of America Online, which he sold for a huge profit. He also collected rare automobiles, jammed with local rock musicians and in 1993 created Starwave (www.starwave.com), one of the hottest companies on the World Wide Web featuring online publications about sports, entertainment, recreation and parenting.

Soon the former high school friends and business partners could be rivals in a high-profile, high-stakes battle in cyberspace. In April Starwave, in partnership with ABC, plans to launch a major competitor to MSNBC, the online news site and 24-hour cable channel Gates formed with NBC.

"I was anticipating the birth of something," Allen, 44, says about his decision to launch Starwave. "We placed our bets in a number of different areas, not knowing exactly which would mature."

Unlike Gates, who controls many aspects of Microsoft, Allen tends to delegate more to a team he trusts. At Starwave, the team has grown from eight to nearly 300 people in the past four years. So far, Starwave has spent an estimated $60 million and has not earned a profit. But the company expects to be in the black soon. And Starwave is hardly his only cyberspace venture. In all, Allen has invested more than $1 billion in a variety of companies to create what he describes as the "wired world."

Mary Bruno, a former Seattle reporter, is the managing editor of the project. "The news in the U.S. is delivered from the top down," Bruno says. "It's like only four things happened in the world and the only difference is what order they're delivered. I can't believe that's all the news. We want news to bubble up from the bottom with local news being as important as what's going on in Washington, rather than news trickling down from the top."

Starwave's news would include the staples – national and international coverage, science, business and lifestyle stories, plus chat groups, polls and news quizzes. But Bruno is also considering the possibility of having nontraditional reporters – a librarian, a barber, a coffee shop owner – providing local news. "The wonderful thing about the Web," she adds, "is this edgy, funky, raw quality."

Tom Phillips, Starwave's senior vice president, acknowledges that the company's foray into news "can't replace Peter Jennings. People still want the comfort of that image and that voice. We can't do thoughtful editorial like the New York Times or action imagery like CNN." But, he adds, "what we can do is integrate print data, images, audio and even some video."

Phillips and others are buoyed by recent research studies showing that many computer owners – an upscale audience between the ages of 20 and 45 – are turning away from television and newspapers and relying more on the Web for news and information. In addition, the number of users keeps growing. About 10 percent of all American households now have modems to access the Internet, and another 40 percent of the public has access at work.

«o far, Starwave has been attracting millions of users to its current Web offerings. SportsZone, a partnership with ESPN, is its best-known site and its biggest moneymaker (from advertising). Another venture, Mr. Showbiz, focuses on entertainment. Outside Online offers a vast array of information on outdoor activities from backpacking to canoeing. Family Planet is aimed at parents and children. Starwave also coordinates sites for professional basketball, auto racing and football, including the official Web page for Super Bowl XXXI.

Wired magazine once described Allen as the "accidental zillionaire," a suggestion that it was Gates, not Allen, who made Microsoft the dominant software maker in the world. But it was Allen, not Gates, who discovered the Internet early on. Now the question may be whether one of them or both of them will chart the course of a new news medium.

Christopher Harper teaches journalism at New York University. He wrote about the Chicago Tribune's online journalism in our December issue. His book, "And That's the Way It Will Be: News in a Digital Age," will be published in September by NYU Books.