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Few Net surfers use RealNames' keyword service

After three years on the Web, few people actually use the company's Internet keyword service despite an affiliation with Microsoft and positive analyst sentiment.

Ever used a RealNames keyword? If you're a typical Web surfer, the answer is probably no.

Despite a recent security fiasco and a scuttled initial public offering, the Internet keyword company RealNames still has the aura of an Internet darling, enjoying the benediction of Microsoft and the momentum of an apparently good idea for simplifying Web addresses.

But after three years on the Web, comparatively few people actually use its service.

"The average Joe surfer does not know they exist," said Peggy O'Neill, analyst with NetRatings.

O'Neill's assessment doesn't even get an argument from RealNames.

"That's exactly right today," said RealNames chief executive Keith Teare. "That's entirely because of our business-building strategy, which will soon make it so that you begin to see Internet keywords in advertising and through our relationships with customers."

The San Carlos, Calif.-based company provides a database of keywords it suggests could take the place of the lengthy Web addresses (URLs) that denote Web pages today. In RealNames' example, the URL "http://www.fordvehicles.com" for Ford Motors' online showroom can be replaced by the RealNames keyword "Ford Explorer."

RealNames collects a license fee for putting keywords into its database and charges a $100 yearly fee per keyword. It also gets a bonus for driving traffic to a site.

The ambitious keyword company has had a manic-depressive few months, careening from the heights of Microsoft's hefty 20 percent investment and major customer wins to the depths of an embarrassing database hack and a scuttled IPO.

RealNames filed in October to raise up to $80.5 million in an IPO, and withdrew that bid on May 11.

Teare said RealNames pulled the planned IPO because of market conditions and because the company had enough cash on hand that the offering didn't make sense until the market improved. The company still intends to go public, he said.

Executives say RealNames is poised to proceed with several initiatives aimed at integrating keywords into Internet navigation and raising its profile among average Web surfers.

Teare said the effort within the International Engineering Task Force (IETF) to craft an industry standard for Internet keywords was progressing swiftly.

First proposed in October 1998 by RealNames and Network Solutions, the specification achieved draft status in February. The IETF may consider that draft at its August meeting in Pittsburgh and is expected to pass judgment on it by the end of the year, according to RealNames.

In addition, Teare promised a "very major relationship" in the next several weeks that will bring media consumers face to face with RealNames keywords "many times a day." Within six weeks, Teare said to expect the company's advertising campaign promoting the alternative addressing system.

An agreement announced this week with Panasonic will add a whopping 10,000 keywords to the RealNames database, adding to the current total of 1 million keywords. Terms were not disclosed.

Meanwhile, RealNames keywords are not lying completely fallow. Deals with major portals put the keywords at or near the top of search engine results, providing more than 50 million such results daily, according to the company. Ten percent of those linked keywords on search results pages earn their owners a "click through," or visit.

But those click-throughs are a far cry from the company's ultimate vision, which looks forward to a day when people routinely type RealNames keywords instead of traditional URLs to get where they're going on the Web. RealNames estimates that only about 10 percent of its keyword resolutions are typed; the company is shooting for 50 percent in the next 12 months.

Even while the general Web public remains largely ignorant of the company and its system, NetRatings' O'Neill and other analysts remain bullish about RealNames' prospects, pointing out that the company's multitiered fee schedule for companies registering keywords--comprising licensing fees, keyword fees and traffic bonuses--bodes well for success.

"I've seen many worse business plans," O'Neill said.