A Clue...to Internet Commerce

by Dana Blankenhorn

For the Week of November 10, 1997

Volume I, No. XXXVI

This Week's Clue: Help For Small Players

Contrary to everyone's assumptions, we mice have a better time on the Web than elephants. A recent story by PC World indicating half the Netscape users who downloaded Internet Explorer 4.0 still preferred their old brand proves, beyond doubt, that when given the opportunity, people make their own decisions. Small businesses usually give people more credit for brains than large ones, which usually feel they must manipulate to win. Mice can also change direction very quickly. We scare elephants, in other words, for good reason.

So what are the latest Clues for managers of small sites, or small businesses online? A review of recent trends, reflected in several mailing lists subscribed to by these folks, reveals some important trends:

Small sites may have short horizons, but they should see to the end of them. To get where you're going, you need a focus, and the smaller you are the narrower the focus should be. Admitting your small size, then taking a scattershot approach (we're small, try our mall), won't work. On the other hand, you and your friends may do very well running Mayberry ISP.

Small is also in on Web site design. Small menus with small buttons identifying major pages of your site. Frames, if you have them, shouldn't be visible. Colors should be basic - complex colors take more time to low than primary colors. Can't afford Active Server (.asp) or Java codes? Try Server Side Includes (.shtml) - great bang for the dollar or hour. Ad banners don't have to download before the text in your pages, and you risk losing users if don't progressively render them. Also, time is money - your money. Those are short attention spans out there, so don't overtax them.

Databases and online ordering - once exclusively a feature of large sites - are now inexpensive enough for anyone to implement. If you lack the skills your Web host or ISP may have them. If they lack the skills, it may be time to do some shopping.

Don't be ashamed to be small. Even a solo act can win with passion. But you need to be focused, you need to be disciplined, you need to be serious and realistic on your goals and your plans to succeed these days. It's no longer only the "cool" people who have Web access, after all. To reach the world, you'll have to compete with it.

SSP (Shameless Self-Promotion)

We're back and better than ever. This month starts our fall tour, with visits later this month to Comdex in Las Vegas, and next month to Comdex Miami and Internet World in New York. We'll see you there.

How do I stay in the know? Remember that it's Journalism -- checking the news, calling people, listening carefully, writing on deadline -- which keeps the clues coming, although I also handle consulting and commercial writing (ask about those rates via e-mail). (I've finally finished those features for NewMedia and Internet & Electronic Commerce Strategies ).If you're looking for excellent work -- like that found in my column at Atlanta Computer Currents or my regular work for Net Marketing magazine don't wait for the e-mail -- give me a call at 404-373-7634.

And now back to our show...

Social Justice

The big trend in law enforcement these days involves using social strictures, not just cops, to prevent crimes. That's why they're printing rapists' names in the newspapers, photographing johns hiring prostitutes, or conducting prayer vigils at drug houses and X-rated movie houses. It's the tolerance of the local community that makes the difference in what goes and what doesn't, and the assumption is the entire Web is one local community.

That last thought is Clueless. The Web, in fact, has as many communities as the real world. If you're running a Church-oriented Web site, you may get in real trouble for having www.penthousemag.com on your user logs while in other industries that would be called research.

The question for today is where does Yahoo live? Advertising Age reported recently they're getting in trouble serving X-rated ads when kids use a keyword like "butt" in their searches, but notes sent to the "Online Ads" discussion group indicate its walk on the wild side runs much-deeper. Knowing that AOL rose to prominence in large part on the strength of X-rated chat, Yahoo has actually advertised to win this business to its own chat service . Registered users of the service who say they're over 18 can get into the chats, which of course take X-rated ads.

Yahoo's under intense Wall Street pressure to continue the earnings momentum, and missing a quarter could kill it. So let's offer them a Clue. If you're going to walk on the wild side, don't use your real name. Time will tell whether that would still the critics. But before launching into this risky business, perhaps they should have bought a new URL (like, perhaps, Whoopee.com?)

The pressure to turn a profit is intense throughout the industry, and sex makes money. Ad Age reported recently some X-rated sites will spend $700,000 per month on ads, and Excite has even rated X-rated sites on its "lifestyle" channel. We're betting Microsoft's new search engine, like AltaVista and Lycos, won't take that business. And we'll be interested to see what develops. Will politics overwhelm economics? Stay tuned.

Internet II

Flame me if you like, but spammers, streamers, and IE 4.0 downloaders are destroying the Internet. If you want the bandwidth you think you're paying for, you've got to be on a Virtual Private Network (VPN), separated from the hoi polloi by firewalls and corporate policy. Concentric Network has been banging the drums loudest for these things, selling VPNs to game sites, to companies like Quicken, and for corporate networking.

Bernardo Huberman of Xerox' Palo Alto Research Center has said usage-based pricing is the only way out, based on his ongoing study of Internet congestion trends. (That might be why Gateway.Net is charging $12.95/month for 30 hours per month, and hourly rates after that.) Huberman's studies show the Web is becoming a network of inner-city freeways, prone to accidents, to rubber neckers, and to major slowdowns near major exits .

The Clue here is the brilliance of the market, as opposed to the brilliance of rhetoric. Tiered-pricing is coming, and those who accept it will get where they want to go. The rest of us will be stuck in traffic.

Selling Big Ticket Items

The best Web site doesn't always win. When you're selling something expensive, the business behind the site needs a Clue, too.

I was working on a book project recently when I visited AutoWeb.Com , Microsoft's CarPoint and Auto-By-Tel . I found the graphic look of CarPoint very attractive. I found AutoWeb very well organized. But I'd buy my car at AutoByTel. They have thousands of dealers who'll give me the same buying experience wherever I live, they offer financing with multiple carriers - they'll even offer insurance. (OK, they just have one carrier , but the others have none.) Links to unbiased information on cars are free, and tracked (although I prefer the way AutoWeb handles database calls for setting the price of your junker). The point is that if you're selling something valuable, concentrate on what's behind the screens, not what's on the screen.

The bigger the price tag, the more likely business models will get in the way of good Web development. The lifeblood of the real estate business, for instance, is listings, but since ReMax organizes these by office, you may have to search six sites to get what one company's offering in your neighborhood. Compare this to what an integrated company like Harry Norman can offer in a city like Atlanta - you're in-and-out much faster. While the National Association of Realtors is trying to organize a national listings database, few members are offering their content, so its value so far is minimal.

What's our Clue from all this? Matching big businesses with big sales to the needs of the Web is a much tougher deal than anyone previously imagined.

Clued-in, Clueless

Clued-in this week are the folks at LinkExchange , the second Web ad network (we previously honored DoubleClick here) to be given the honor. LinkExchange has succeeded in maintaining a niche among small, low-cost Web sites, then serving them as they want to be served. A recent Media Matrix survey showed its ads reach 31.5% of home-based Web users, a figure comparable to Yahoo and Netscape. It takes more than a Clue to make a dollar, and far more than a Clue to make a dollar with those who have a Clue. But profits start with Clues, and LinkExchange has proven its value.

Clueless this week is yours truly, i.e. me, Dana Blankenhorn . I agreed to chair a panel at Comdex Miami (mainly to boost this letter). I didn't count the cost. It turned out to be about $1,000 for the flight alone (if you can get one). Your Clue - look at all your invitations carefully.

A Clue...to Internet Commerce is a weekly publication of @Have Modem, Will Travel. It's sent free to a qualified e-mail list. Like Netscape Navigator, it carries a list price -- $49 per year. (Unlike Netscape, we don't expect you to pay it.)Subscribers can receive either a .txt file or an .htm file. The .htm version features links which become active when online with a browser, or an e-mail package like Netscape 3.0. (Let us know which you prefer.) To take your name off the list, simply write REMOVE as the subject, or content, of a message replying to this post. To request your free copy, write us at Dana Blankenhorn@worldnet.att.net. We're on the Web at www.tbass.com/clue and www.ppn.org/clue.