(FORTUNE Magazine) – One reason following technology is so much fun is that every once in a while a really exciting product comes along to sweep everybody up in a collective enthusiasm. People start talking about it as if it were a second coming. The hype's so intense that when you finally get your hands on the product, you feel like a pioneer taking another small step in the race to improve the lot of mankind. It's a local version of landing on the moon and stepping off the ladder onto that dusty frontier. Everybody's happy.

So then the competitors line up, and that's when the real fun begins: Will the people who made the original product turn out to be as smart as they seemed when they had no direct competitors? Will the market be big enough to support more than one product? How quickly will the originators be able to match the cool new features the competitors introduce? The game is on.

PointCast is the latest product to inspire this kind of fervor. This software embodies a fundamental insight into the nature of the Internet: If our computers are wired into the Web, then why do we have to enter an address and request information? Why can't information just come down the wire so it's ready whenever we're ready to view it?

If you haven't done so already, log on to www.pointcast.com and download the free software. PointCast serves as a combination screensaver and news-retrieval service. First you indicate what sorts of news, financial data, weather forecasts, and sports scores you want. Then PointCast goes out at regular intervals and collects the stuff from its own servers, displaying it on your monitor either as a screensaver that's constantly changing or as a table of contents you can click on for full stories. The program is especially great if your PC is always connected to the company network and the company network is connected to the Internet. Most people ask PointCast to report on their five or six favorite stocks, whose current prices it then shows on a ticker display running across the bottom of the screen. It's like watching television but having the set tell you only what you want to know.

PointCast is such a sexy concept that the company, which is headquartered in Cupertino, California, gets away with distributing what's really a horrible piece of software. The thing is a 16-bit program--meaning that it works best on the last version of Windows, works okay on Windows 95, and doesn't work very well at all on Windows NT. What's more, writing versions of PointCast for other computers, like Macs, is a drag--which explains why that version hasn't yet gone past the testing stage.

Nevertheless, for most corporate users PointCast works just fine. And the basic insight it represents--a customized news dump into software that you have to program only once--is so appealing that nearly two million users adopted PointCast in less than a year. That's a much more solid usage statistic than most cited on the World Wide Web, because after the program gets copied to the user's computer, it contacts PointCast's servers regularly. So the company really knows how many people are using its software, information most Website operators can't even pretend to match.

Because of PointCast's remarkable, measurable popularity, the company has managed to sell a serious amount of advertising. It won't comment on revenues, but compared with most Websites, the variety and number of advertisers it is attracting are unusual. That so impressed companies like Compaq, General Electric, and Knight-Ridder that they put $36 million into PointCast in July, just six months after it delivered its software. That's on top of $12 million in venture capital the company had raised earlier. (None of that money, unfortunately, comes from my partnership.)

This kind of success breeds imitation. IFusion Com, Intermind, and BackWeb Technologies, startups with ideas for delivering data to computer users, have raised significant venture capital. In July, Individual, a company in Burlington, Massachusetts, that for years has delivered customized news to subscribers via fax and E-mail, paid $38 million for FreeLoader, a small company with a product that transfers Website content to your PC's hard drive. Meanwhile, Berkeley Systems, the king of screensavers, has been scrambling to avoid being elbowed off the world's screens by PointCast; in October, Berkeley introduced a way for customized news to be delivered automatically to its product.

What do all these PointCast wannabes offer users? Well, FreeLoader (www.freeloader.com) was designed to let you download Web data to your PC so you could read it later off-line, thus saving money on connection charges. The program reached the market in May. But the first version of FreeLoader was cumbersome, to say the least. It has since been redesigned, rendering it easier to use and a more direct competitor to PointCast. The refinement makes FreeLoader much more valuable to Individual, which plans to offer it to subscribers.

Berkeley Systems is the rival with the most to lose: Much of its $28 million in 1995 revenues derived from screensavers like After Dark. You've seen this product; when a computer sits idle, After Dark is the software that displays all kinds of whimsical animations--including its famous flying toasters--on the screen. Berkeley's problem is that as soon as people download PointCast, they quit using After Dark.

So Berkeley recently introduced After Dark Online (www.afterdark.com), a free program that displays Web information as it arrives, including a ticker tape of stock prices and sports scores, and content from USA Today, the Wall Street Journal, ZD Net, Sports Illustrated, and DBC Financial News. Berkeley isn't giving away the store: While After Dark Online does work on its own, if you want the flying toasters and so on, you still have to pay.

Intermind offers a way for you to receive automatically updated information right in your World Wide Web browser. If you visit the company's Website (www.intermind.com), you can activate Intermind by downloading the program free, adding it to your browser, and then selecting a feature known as Hyperconnector, which monitors different vendors' Websites. Anytime the content on a site is updated, Intermind alerts you to the changes. Sounds great, but Intermind's information vendors aren't so well known, and the service seems oriented more toward telling you about product updates than providing real-time news and information.

Two other startups, BackWeb (www.backweb.com) and IFusion (www.ifusion.com), have introduced PointCast-like systems. Both employ a broadcast analogy: Users select "channels" according to the kinds of information they want. BackWeb has a slight edge because it has already released a test version of its software. But for now, the content it provides is tough to love: It has signed up computer-magazine vendors such as CMP's iWorld and Ziff Davis's ZD Net, the Clinton-Gore campaign Website, and General Motors. IFusion, which has yet to deliver software, says it has agreements with information vendors that appeal to a broader audience, such as USA Today, the Weather Channel, KPIX, and Epic Records.

It's true that each competitor offers something unique. But their marketing spiels owe everything to PointCast's success; the buzzword is personal broadcasting. PointCast's influence has spread beyond these direct competitors: Any company that previously defined its business as searching for, organizing, or delivering information is beginning to claim that it has some way to personalize the material.

PointCast's competitors all like to imply that PointCast is toast. PointCast has old software. Its software is crummy. It forces you to get information from the vendors it chooses. You have to suffer through the advertising on its site. It doesn't work on every platform.

These things are all true. Unfortunately, none of them has stopped nearly two million people in less than a year from seeking out the software. In other words, the objections didn't really matter. The only criticism that could conceivably make a difference is the one about limited sources of information-- people probably do want the ability to choose their own sources. I, for instance, would much rather get my business news from the Wall Street Journal (After Dark Online) than from Reuters (PointCast). But PointCast is about to add CNN and, even better, has begun signing up local newspapers.

The truth is, displaying the information in a screensaver is more gimmick than insight. The real value is getting useful information delivered to your computer automatically, and PointCast did that first. After Dark Online is a fine product. But you can use only one screensaver at a time (since most of us have only one screen, on one computer). And since After Dark Online doesn't represent anything really truly new, there's no reason for me to go to the trouble of trashing PointCast and installing After Dark--unless I'm addicted to flying toasters. I'm not.

PointCast's insight is so powerful, and its marketing so far ahead of that of its competitors, the company has attained an enviable state known as "inertia." In technology, at least, inertia is a wonderful thing--it's a condition in which a company sits atop the heap regardless of logic or reason. This doesn't mean that the people who run PointCast can be saved from any stupidity they might display. But it does mean that they have to be aggressively stupid to lose their position as the leader in a new category of software.