Here's a merchandising idea that has yet to be tried. Use computer technology to bring the goods of a lot of small shops together. No one shop will have to scale fulfillment beyond its capacity, and you can still get a lot of volume. (No, this is not a "Web mall.")

A search site must find things. It's not a destination. It's a utility. Its success depends on volume, and concentration upon the service it provides. If you want to add other services on top of search, those services must compete on their own.

There are a host of great services, like search, that have yet to be fully exploited online. Concentrate on one, use computers to deliver it well and deliver it efficiently, then scale those systems (computers scale - stores don't) and you can still win the game.

There's really no such thing as a portal. A portal is a way of building on entropy, on the reluctance of people to change habits once they're ingrained. But just because people are slow doesn't mean they're stupid. America Online is losing market share, and it has been losing share for years. The same is now true for Yahoo. Lycos has the right idea - it has been building a network of services that each stands on its own in the market, rather than throwing its name around.

Everything else on the Internet is built on these basics. Your site offers content, commerce or a service. Community is just a series of additional services built on content. In the end, the content sites will win that battle, but publishers shouldn't be sanguine, as the ClickZ example illustrates. Services can trump what rival content provides, and if those providing services expand into content, they can take the market away if their content is better.

When the California gold rush was over, the mining industry had just begun. When the oil prospecting at Spindletop was over, the oil industry was just being born. When the crash of 1907 took away hundreds of cereal makers, that industry was just in its infancy. These are still early days. Those who are serious and keep their eyes on the basics can build profitably. The rest can go somewhere else.

I'm in San Diego this week, speaking and writing at the Information Edge conference sponsored by Greenfield Online. I'll also be launching a weekly column soon at Workz, and if you're in the broadband access business I want to talk with you for a Boardwatch feature.

You can join the A-Clue.Com discussion by joining I-Strategy, a new e-mail list that replaces the discussion section here at a-clue.com . I-Strategy covers your future and that of the Internet. It will be lively, take just a few minutes to go through, and provide a host of voices other than my own. Please subscribe to it .

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I write daily for ClickZ. I write monthly for  NetMarketing and Boardwatch. I've been in Advertisi000ng Age and the Chicago Tribune . Once every other month I'm in CLEC Magazine. Twice each month I'm at OneChannel.Net  and I've recently joined the staff at ISPWorld. You can always buy my book . Subscription instructions are at the bottom of each issue.

Remember that it's journalism that keeps the Clues coming...

Takes on the News

The Four Horsemen

The continuing failure of PC-related stocks to recover has bullish stock analysts claiming the death of the "big four" that drive the economy and the birth of a new "big four."

The old "big four" were Microsoft, Intel, Cisco and Dell. The new four are Oracle, Sun, EMC and Cisco . Underlying this is the idea that you can find some certainty, some sure things in an uncertain stock market.

You can't. Every company must be evaluated on its own, while all investments must be evaluated against the general background of the market. Microsoft, Dell and Intel are being punished for a perceived over-reliance on PC revenues . The new "horsemen" are, unfortunately, simply a speculative replacement. All four are doing well (Cisco is doing less well) and together they represent a "story," namely that networks are replacing PCs as the building blocks of the Internet economy. The story is true, and all these stocks play into it, but there's no assurance the new horses will race as well as the old did.

What we're seeing are the stories bulls tell during bear markets. Bear markets may or may not precede actual recessions. Whether a recession happens depends more on the Middle East peace process than on anything else. War is not healthy for markets and other living things.

AOL Reneges

As quietly as possible, AOL is trying to renege on promises it made months ago as its merger with Time Warner was announced, to allow open access to its cable lines and open access for its customers to the wider Internet.

The cable renege was first detailed by ISPWorld . More troubling remains the fight over Interactive TV, where cable carriers seek payments from Web sites before they'll let users access them over a "free" service. Since they're not calling it Internet, they're claiming Interactive TV isn't Internet, but as Leo Hindery (most recently) of Global Crossing told @d:tech last year, Interactive TV is the only Internet access most poor people will ever get. AOL is also an investor in NTT Docomo , whose wireless "Internet" system also limits access to those sites that pay for carriage. Headlines that continue to call AOL an ISP (like the one in the above link) are just wrong.

There is a pattern here. AOL is not an Internet Service Provider. It re-sells MCI access to its walled-off online service, a service that includes an Internet gateway. Heavy marketing (and an ignorant press) causes people to think an AOL account gives them Internet access. (It doesn't.) AOL then charges every side of every transaction - content, commerce, and consumer - for access to its walled garden. AOL's business plan is to create similar walled gardens in cable and wireless.

This should not be an issue for the government. It should be an issue for the press and the marketplace. A little honesty from the media about what AOL is (and isn't) would go a long way in helping the market adjust.

Who Runs the Web?

I've been scratching my head over why the Internet hasn't been a factor in the U.S. elections. A recent New York Times story gives the answer. Internet users have given their proxy to big business, and big business is "happy happy" with both major parties.

This, however, is unsustainable. The interests of large and small businesses often diverge - regulation can be a barrier to entry for small businesses and a protection for larger businesses that can survive close scrutiny. The interests of businesses and individuals also diverge, in many areas, most especially those of privacy.

These differences are currently being papered-over, but when the economic crunch comes they'll explode. Unless there are structures to channel most of this energy constructively, the explosion will take the Internet with it, because the Net (unlike other media) depends on the goodwill of its audience for its continued existence. We forget that at our peril.

Clued-in, Clueless

Clued-in is Infonautics' Sleuth.Com, a great way to combine public information sources into "inside" information. It's not just a corporate resource, either - they also handle sports teams and celebrities.

Clueless is Circle.Com. There's no human contact information on the site, and it crashed my system completely. I don't need sites that give me a headache, especially sites written by marketers.

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