Strategic Computing and Communications Technology Group H: Standards Final Report
To the general public the Internet has emerged as a communications juggernaut, seemingly without any competition from other networks and service providers. However during the early 90's, it did face substantial competition from other proprietary networks backed by many large corporations vying for control over the coming network infrastructure. One example of this is the attempt made by General Magic of Mountain View, California.
In 1988 Apple Computer started the "Pocket Crystal" project to develop business opportunities in the field of computers and communications. General Magic was started in 1990 by Marc Porat and Andrew Hertzfeld (developers of the Mac operating system, Apple Hypercard, and members of the "Pocket Crystal" project) to develop Magic Cap, an easy-to-use communications program for hand-held devices such as personal data assistants (PDAs). It subsequently began developing a communications language called Telescript intended to provide intelligent agent technology for computer networks. 
Imagine that you wish to buy a television set for your new home. You want a 32" set with a certain set of features such as picture-in-a-picture and close captioning. In addition, you have a price range in which you are willing to spend for the television. However, you do not have the time nor patience to spend searching all the stores and magazines for the best deal. Enter the intelligent agent. You can give it the information about the item you desire and then send the agent off to buy it for you. The agent would travel the network, checking the price and availability at all on-line stores, determine the best buy, purchase the item, and report back to you the results of its work. During all this time, you and your computer would be free to do your work. The possibilities of intelligent agents are virtually endless. Other uses could be to automatically book airline reservations, monitor a specific stock for you and buy/sell if the stock reaches a specific price, and filter your email.
Intelligent agents are a step away from traditional network communication. The aim is to reduce the excessive and unneccessary transfer of information across networks which require the use of expensive bandwidth. If you were to buy a television on-line today, it would involve a large number of data transfers between your computer and the on-line service as you logged into various merchants' systems and waded through the many welcome pages and options screens. In some cases, the process could result in data being transfer between the two connections by as much as 30 times in each direction. The goal of the intelligent agent is to reduce this traffic by moving all processing and interaction to the computer where the information is stored instead of splitting it between two sites. The only interaction the user has with the network is to launch and retrieve the agent. It does all its work completely on its own.
Armed with what it believed were two powerful products (Telescript and Magic Cap), General Magic set out to gain a foothold in the network communications business. Marc Porat (CEO) formed a powerful and impressive alliance with major telecommunications, consumer-electronics, and computer companies, including AT&T Corp., Sony Corp., Mitsubishi Electric Corp., Phillips Electronics, Apple Computer, and Motorola Inc. General Magic envisioned an electronic marketplace (separate from the internet) built by AT&T and other telecommunications companies, and accessed by hand-held communicators. PersonaLink, a network with Telescript capability, was started by AT&T on September 28, 1994. On the same day, Sony Corporation began shipping the first hand-held communicators that could deploy intelligent agents on PersonaLink. The Internet's competition had arrived. 
On Friday, February 10, 1995, General Magic made an initial public offering of four million shares, initially priced at $14 per share. Demand for the stock prompted the company to expand the offering to 5.5 million shares. Total trading volume on February 10 was 6.8 million shares with the stock soaring 91% in its first day. 
Unfortunately for General Magic, their fortunes were short-lived. The company has reported losses annually since it was organized in May 1990. In 1994 it posted an operating loss of $21.5 million. According to its prospectus, it does not expect to become profitable until 1998 at the earliest. Today its stock stands at $1 per share, a 97% depreciation from its high of $34, and it has been forced to reduce its workforce from 300 to 138.  AT&T's PersonaLink network was not able to survive as well. "Frankly, PersonaLink did not find the market that we had hoped for, "AT&T PersonaLink spokesman Kevin Compton said.  PersonaLink was shut down on Aug. 30th, 1996. General Magic tried desperately to hang on by attempting to adapt its Telescript language to the internet and Magic Cap to Windows. It also opened up the Telescript language to software developers in other companies instead of attempting to keep the code proprietary as it had done from its inception. Unfortunately, the strategy was too little too late. In December 1996, General Magic's original corporate investors dissolved their founding partners' council. An announcement was also made that the company was abandoning Telescript for autonomous agent software, but would incorporate the basic agent technology in Java-based products. 
The idea of intelligent agents is certainly a good one that, if properly implemented, would be very successful and beneficial to network consumers. What then was the reason for the lack of success of General Magic's Telescript language and AT&T's PersonaLink network? The largest contributing factor was that Telescript was kept as a closed language only available on proprietary networks such as PersonaLink. "When you look at PersonaLink, it really was a closed system," Bob Kelsch of General Magic said. "It used proprietary protocols, and the only client that could get access to it was Magic Cap. Although it was a very innovative, interesting and even exciting mail system, the world is really going to the Internet."  General Magic deliberately did not port Telescript to the internet in an attempt to keep control.
In contrast, the Internet is not a proprietary network but an open one allowing software developers to easily create products that work well within the system. Sun made Java freely available to software coders as well. Both became open standards which gave them a competitive advantage against the closed, proprietary products of AT&T and General Magic. "Java was the standard even before it became commercially available," Alexis de Planque, senior analyst for the Meta Group Inc., stated. "Java has become a standard quicker than RS-232 and SQL [Structured Query Language]," says Paul Cubbage, a veteran industry watcher and former director of Dataquest Inc. of San Jose, California. 
The mistake that General Magic made was in attempting to keep Telescript proprietary while still competing with the Internet and Java. In the case of Verilog vs VHDL, Cadence recognized that if Verilog remained a proprietary language, it would lose out eventually to VHDL, an open language. Therefore, in 1991, Cadence opened Verilog which holds 50% of the hardware description language market today. General Magic went the other direction and failed. Tom Redmond, former director of AT&T PersonaLink Services, stated, "I guess the best way to put it is that it's a technology that came to the market at the wrong time. It came with a proprietary network as the market moved to open standards. But everything that we're trying to do is slowly coming out now as Web-based services. So the concept of PersonaLink Services, I think, was correct. But the execution of it - the timing of the market, the move to the Internet - all those factors contributed to why as a proprietary-based system we were unable to continue."