For the Week of August 19, 2002
Trying to re-boot an industry after a recession is a bit like trying to start a campfire after a thunderstorm. (Doing it after a depression, which is what hit the Internet industry, is like trying to start a campfire after a flood.) You have to be smart, you have to be careful, and you have to go slowly.
One way to start is by looking at what has worked through the bust. According to a new McKinsey report it's not the Amazons that are making the Web work, it's the niche players. They have higher conversion rates, and bigger sales per visit. They also spend more, per-visitor, for marketing and maintenance.
Clear out the mumbo-jumbo and the Direct Marketing Association "wisdom" (spend more on marketing) and you get to a very interesting conclusion. The Web, right now, is best for targeted, niche marketing.
A lot of stuff can get dumped permanently in the wake of the last few years' experience. There's no value in intrinsic targeting. You buy the sites where your targets go instead of buying your targets' visits to other sites. Those complex, busy pages that "direct" users where you want them to go - fuhgetaboutit. Simpler is better, usability is all. Hits, pageviews, site visits - worthless. The quality of your list, the percentage of your target it reaches, the number of people who come to your site and do what you want them to do - priceless.
Right now the Internet is primarily a direct marketing medium. Your site is your store. Your advertising and e-mail bring in the customers. So you'd think usability - making the site easier for your customer or prospect to navigate - would be a top priority.
You would be wrong. Not only are too many site managers thinking first of how they can control their users, and how their site looks to company insiders, but they're expecting bureaucratic committees to come up with answers that should be based partly on research, and partly on artistic feel. It's like having the corporate board of directors make the movie - you need Spielberg.
For most of a decade very smart folks like Jakob Nielsen (and acolytes such as myself) have been hammering on managers to consider the users first. We've had very limited success, and here's why. We've been making the same mistakes we accuse sites of making. We should be looking at site change from the point of view of our customers, the bureaucrats who control the sites.
What's the purpose of the site? Who's really the customer and what do we want from them? Do we have multiple purposes, so we need multiple sites? We don't know. We only know the site sucks, that it doesn't deliver a buying experience, and we say so, loudly. We call management "clueless" and go on our merry way.
Well, if you were a customer (or prospect) and someone came by selling change, but you didn't buy-in right away, would you be more likely or less likely to buy if the salesman called you names?
Rather than fight City Hall, or bring in a whole bureaucracy to fight a bureaucracy (the strategy of everyone from IBM to EDS to Accenture) Mike Robertsadvocates a new approach. Take your own medicine, he tells consultants. Look at the problem from your customer's point of view, from the seat of the bureaucrats and their imperatives. Then develop a process that will lead this team to the goal of a design that accomplishes their customer's goals without compromising the company's. That's how you effect real change - you roll up your sleeves and work.
There's a lot of humility in the air right now, which Roberts reflects well. On the consulting side we've learned that you can't create change from the outside, that you have to get in there and dig in order to make change happen. On the company side we've got nearly 7 years of experience showing that bad Web sites suck, along with two years of lay-offs among companies with bad Web sites (and some among those with good Web sites).
A Web site designer has to know what they're selling. The site has to be oriented to the user's individual needs, and it has to get the j-o-b done. It can't waste prospects when it has just one chance to do its job (and it does). That sounds like a brochure-ware view of the world, but it's also a personal motto known by every salesman and every beauty pageant contestant. You only get one chance to make a first impression.
So consultants are going to have to work harder to get their feet in the door, and they're going to have to work harder once they get in there, not just spouting their views but creating a process through which those they're spouting to can change themselves for the better.
The difference between a good consultant and a bad one isn't what they say. It's what they leave behind.
SSP (Shameless Self-Promotion)
I have opened two new markets. GlobalPOVhas taken a piece I wrote on identity cards and why Americans won't take 'em. Marketingprofs has taken an occasional column similar to work formerly done at ClickZ. I'm presently negotiating with Corante to do a blog based on my upcoming book "Moore's Law for the Above Average." But I'd love more work, and I'm waiting for your e-mail.
To join the review team of the "Moore's Law" book just ask . If you'd like to help market the book as an agent or publisher, the address is the same. My current books include "Boom, Bust & Beyond: The Best of Dana Blankenhorn," , "The Time Mirror," and "Living on the Internet".
I still write for Boardwatch, Boardroom and BtoB. I still produce I-Strategy for Adventive
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Takes on the News
Ending Deep Linking Arguments (Without Lawyers)
The silliest thing about the whole "deep linking" controversy is how unnecessary it is for lawyers to be involved. Every dollar they've taken, from whomever they've taken it, has been a dollar stolen.
The fact is that it's very easy for a site - any site - to limit who links to its pages, and how they come in. A few server-side scripts will handle the job quite nicely.
You may choose to push every link to the site - no matter where it's heading - to your home page or some other page. You may check for a cookie and push those page requests that don't respond positively to a registration page (or a cash register). You may let those who go through registration (or sign-in) through to their destination, or just hose them and put them back on your home page. You may even choose to have exceptions to an exclusion, allowing either some sites who pay you, or have license agreements with you, or those sites whose managers you just happen to think are cute, to link to inside pages - everyone else goes to the home page or (again, if you prefer) a registration page.
All this takes is a basic knowledge of HTML, maybe some calls to a database (if your lists get too big). No lawyers are needed. No press releases are needed. Repeat, NO lawyers are needed. This is a job for software.
I don't happen to like this aspect of HTML. I happen to think that denying links, or re-directing them, violates the spirit (and intent) of the Web. I happen to know that users resent it, and avoid sites that do this to them often. When newspapers do it, I happen to think it sucks big time. But it's something anyone with a half a brain can do, and do easily.
So now it can be revealed. Most people at the top of the journalism business don't even have half a brain.
World Wants Out of Internet
A Register editorial by Bill Thompson (best-known as the BBC's cyber-columnist) drew the expected fire from Americans. Most criticism was of the "how dare he" and "what do you expect from Eurotrash" variety.
Thompson does, however, reflect a growing European frustration with the U.S., one many Americans share. This U.S. government has pursued a unilateral policy in many areas, including online. ICANN has become profoundly undemocratic, Hollywood's "property rights" arguments are making technology illegal, and Americans (as usual) are tone deaf to their critics.
But while Thompson writes "damn the Constitution" (because it fails to protect his liberty) the result of his argument is "damn the Internet." Many nations already work to give him what he claims he wants, balkanizing the Net to imprison their own people. China has done it, Vietnam has done it, and Saudi Arabia has done it. Australia has made a start at it. Even in Europe, France and Italy (among others) have extended the reach of their laws beyond their own borders, attacking cyber-citizens and U.S.-based sites for violating local laws. Thompson seems to feel this is just fine, that it "allows them to express their own values, respects their own laws and supports their own cultures and interests."
In the case of Europe this may be true. But dictators don't stand for election. They express only their own values, their self-made laws, their self-imposed culture and interests. Over half the world today lives under dictatorship - Chinese, Muslim, African. Washing our hands of this won't work - those hands won't come clean.
Still, Thompson's argument would resonate further had U.S. democracy not been stolen in late 2000 by the Supreme Court. There's no question that the forces of George W. Bush did steal Al Gore's victory, in the American tradition of J.Q. Adams (1824, selected by the House after finishing second to Jackson) and Rutherford B. Hayes (1876, a deal with southern electors to end Union occupation and beat Samuel Tilden). (Republicans might also argue for John Kennedy (1960, questionable votes in Illinois) but at least Kennedy won the popular vote. Adams, Hayes, and Bush didn't.)
The question is whether Americans will be permitted to take their nation back when the time comes. If the next election is stolen in the Zimbabwean way, Thompson will prove a seer, not a cynic.
Intel's Useless Exercise
The decisions by Intel, Cisco and a few others not to expense stock optionsis Clueless, worthless, and doomed.
They're right, it is hard to value an unexploited option. But you can make a stab every quarter. Calculate the difference between the option's strike price and the stock price at the end of the period, and multiply by the number of options held. Even if Intel and Cisco don't do this analysts following those stocks will, and the numbers will be reported.
Some honest tech leaders are taking this stand because most of their options go to ordinary employees. The calculation is necessary because so many have proven profoundly unworthy of trust. There's no question that many raped their companies, plundered their stockholders and destroyed their employees - in the case of Worldcom its phony profits also ruined competitors, forcing them into useless strategies to compete with air.
When "free money" is given to talent in exchange for stock, or options, that grant is designed to maintain their loyalty and their long hours of work. It's compensation. It's compensation that will, at some point, dilute the holdings of public stockholders.
The bad guys have now forced the good guys to do something they don't like, but it's a very old story. When my son's grade-school class acts up they all lose privileges, even those who were good.
Clued-in were Hutchison Whampoa and Singapore Technologies Telemedia Pte, which stole Global Crossing's network for $250 million less than they originally offered . In time this will prove one of the steals of the age and an enormous loss to the U.S.
Clueless is this analysis claiming backhaul prices will rise due to the bankruptcy of fiber owners. Debts are wiped-out in bankruptcy, allowing those companies to return with lower costs. Conventional analysis that works on a 30% glut won't work, either. Since Moore's Law works for fiber, supply will remain far more flexible than demand for decades to come. Anyone's higher prices - even a cartel's higher prices -- could be easily undercut simply by one fiber owner changing electronics. Bandwidth prices in fact are plunging toward zero. (That's how the Asians were able to steal Global Crossing, see above.)
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