A Clue...to Internet Commerce

by Dana Blankenhorn

For the Week of November 24, 1997

Volume I, No. XXXVIII

This Week's Clue: Managing Lists

As we discussed last week, every Web site that sells anything should have a list, especially if you're selling information. The technology is Web-cheap and becoming ubiquitous.

Managing information flows through that list is trickier. The list you're reading is a simple, one-way transfer of information. A Clue currently has 600 subscribers to its weekly bulletin (you are the self-chosen few), C|Net has over 850,000. To keep subscribers happy, you need a continuing flow of valuable information. In my case, that comes from reporting. C|Net editors have a process through which news about various C|Net sites flows to a central source, which compiles the weekly briefing. (Such sites as Hotwired and Manufacturing.Net also have valuable one-way lists for their users.)

The Web, however, isn't a one-way medium. To really deliver the power of the Web, you need two-way communication. I-Sales and Online Advertising are just two of the valuable interactive lists I belong to. They have a box for new posts, and an editor selects the best each day for a digest. While you may try to see every post (and those who post regularly to a list often prefer this) it's like subscribing to the Associated Press wire rather than getting a newspaper. It's for junkies.

One respected journalist asked me last week about liability. What if someone lies about someone else? If you pass it on, aren't you liable? The concern is valid, stemming from a New York lawsuit pursued some years ago against Prodigy by Stratton Oakmont, a Long Island stockbroker. Prodigy was held liable for a member's bulletin board posting because the service claimed to filter such posts. This has had a profound chilling effect on the willingness of big media sites to do interactive lists - or interactive anything. They don't want to be sued for distributing anything they haven't checked-out.

There are two related solutions for this. First, put in a disclaimer. Then, forget you put in that disclaimer and have journalists put together your digest. If they're unsure about something, they should check it out or leave it out. The result is a changed role for journalists. Instead of collecting big sources and delivering big truths from the mountaintop, you're putting your newsdesk in the audience.

The goal here is simple. Tomorrow's media properties will model the economic process engaged in by readers and advertisers. They'll help buyers get the data they need from the market, and help them figure out what it means. They'll extract the truth from sellers, and explain it in simple language. Instead of picking up tips from selling ads or subscriptions, they'll earn royalties from easing economic relationships.

C|Net realizes this, albeit dimly. Their software and, now, hardware sales sites link to their news and reviews databases. If Halsey Minor can harness the two-way communications powers of his audience (found in his registration and messaging databases), he'll eat the rest of his competitors' cheese. Companies like Ziff-Davis, International Data and CMP Media have one last chance to catch-up. I suggest they take it.

SSP (Shameless Self-Promotion)

It's our fall tour. In December we're speaking at Comdex Miami and then jetting to Internet World in New York. We'll see you there. I'll be wearing the beard and the gray fedora, as normal, and spending considerable time in the press room writing the next week's issue.

How do I afford such extravagance? 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). Look for coming features in 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...

WebTV or No WebTV?

The press room at Comdex last week was filled with nasty talk about WebTV, now part of Microsoft. They're finally releasing new product in January, and embedded in the offer ($19.95/month for all-you-can-eat access at 56 Kbps through your TV screen) are (get this) interstitial ads.

The idea is the chips in the WebTV box pre-load some banners, and while you're waiting for the next site to download it'll stick these on your screen. How'd you like to be heading for the GM site and get shortstopped by a Ford ad, the reporters ask? Isn't this just the kind of "roach motel" deal Microsoft sued TotalNews to stop?

Well, not exactly. WebTV has lots of rivals (like the RCA-Oracle NetChannel), the investment by buyers isn't large, and pissing people off with extra ads is a great way to send savvy buyers elsewhere. But what's really clueless is that the WebTV ads, unlike ads delivered by Web ad networks are mass-market. Since they're linked to the box, not the user, they can only serve a lowest common denominator, minimum CPM marketer. The big money lies in linking specific messages to specific people who want to hear them. These ads provide real service. WebTV's just adding to the noise. The word for that is Clueless.

Far more interesting are reports that all these devices will be pitched through multi-level marketing schemes, the same schemes that brought your e-mail box much of its Spam. In an MLM program, you recruit salespeople, who recruit salespeople, who sell to people, and you take a piece of everyone else's sales. (In this case, that's supposed to include their ISP charges.) There's a scandal a-coming, pardners. Just you wait.

No More Delays At The Gate (But Inside It's A Maze)

In terms of Internet access, the big news at this year's Comdex show was an agreement between Rockwell and Northern Telecom to develop "Consumer Digital Subscriber Line" (CDSL) chip-sets for delivery next year, offering cheap 1 Mbps access to the Internet.

I have no doubt these companies can do what they claim - DSL is proven technology. But before you redesign your Web store with streaming video, remember this. The problem with Internet access isn't in your modem - it's in the pipes themselves. Until faster switching systems are deployed by Lucent, Newbridge and others, replacing Cisco routers now playing Disgruntled Postal Worker, no one's going much faster than 40 Kbps, no matter how big their front door to the Net is. CDSL could, however, become BDSL (business digital subscriber line) when used in corporate Intranets, Extranets, and other Virtual Private Network (VPN) systems.

AT&T entered the VPN market in a big way at this show, and it's where much of the market will continue to stream until the bottlenecks in the public Internet are dealt-with. It's a business market because it'll cost you - AT&T will charge $3/hour for dial-up access to its VPN offering. But they're offering guarantees of bandwidth availability, and people who trust their businesses to a technology find that a fair trade. What it means is that those high-end streaming technologies will first have to prove their market worth in a business-to-business setting before they're loosed on the consumer. Which is not an entirely bad thing.

More Top Level Domains

Recently we reported on the .nu domain, from the island of Niue. (You don't have to host it there - you can host it "anywhere in the known universe" with Internet access, the Niue-bies told us.) Now comes word from TABNet , a domain registration service, saying it's lined-up the Cocos Keeling Islands (.cc) and Tonga (.to). They've signed $10 million in advertising deals with Excite , Infoseek , LookSmart and WhoWhere to publicize the availability of names in the .cc and .to domains.

Perhaps just as interesting, they're going to sell the domain registry in conjunction with something called the Web Site Garage , a suite of free (and not-so-free) services aimed at helping small businesses build their Web presence. Let me know what you think of all this...

Clued-in, Clueless

Clued-in this week is 3Com, makers of the Palm Pilot . After many walks on the Comdex (http://www.comdex.com) show floor, it's obvious that Microsoft has lost again with Windows CE. The lighter, simpler, more basic Pilot has swept the field, after beginning a last-gasp by the late Palm Computing, which was bought by USR, which was then bought by 3Com. IBM's decision to add voice mail to a Pilot-like device for delivery in 1998 should keep it ahead of Microsoft's latest piece of CE FUD, called Gryphon. (Of course, the best way to support voice on these things is to add a micro-cassette recorder you can then plug-into a product like Dragon Systems' NaturallySpeaking. Once you get there, you can just carry the recorder in your other pocket.)

Clueless this week is Masayuki Son, majordomo (for now) of the Softbank Empire. He let ZD head Eric Hippeau stage a coup against Jason Chudnofsky's trade show group, sticking the ZD name on Comdex and other shows. Rival publishers are pissed. He's already lost the entertainment, Apple, and Internet domains, now it looks like he's going for the rest of 'em. We predicted Son's house of cards would fail last year -- the numbers don't work, and the stock's down nearly 75% in 1997. Eric's now placed himself in perfect position to pick-up the good pieces for himself, in cooperation with an outfit like KKR. Eric gets the silver medal in our Clued-in derby this week.

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.