A Clue...to Internet Commerce

by Dana Blankenhorn

For the Week of December 22, 1997

Volume I, No. XLII


This Week's Clue: A Week Ago, The Road Ahead

Now that you've had some time to digest the latest Internet World, let'ssift through its Clues for what might happen next year.

First, forget Comdex, N+I, ComNet or SuperComm. If you're in this space,you go to Internet World. That doesn't make Alan Meckler the next SheldonAdelson, however. Major vendors like Netscape, General Magic and Exciteeither had tiny booths or no booths, preferring press cubicles and standsin others' booths. That should be enough - it's what's online that counts.(An exception was Open Market ,which had a huge booth - guess they didn't get the memo.)

Instead of booths, online companies buy PR. This turned Niehaus,Ryan's CyberSchmooze into a smarmy display of attitude (black for her,green for him and no ties). There is more money than brainpower in theInternet space, it's just the money's going into different places thanit did in the PC era.

What else did we learn? While 1997 was the year of branding, 1998 lookslike the year for bots. The best bots will pick their spots, making marketplacesrather than serving just buyers or sellers. They'll live on servers, notclients, and for the next few years they may live mainly underground, incorporate Intranets and high-dollar business-to-business specialties. Whenthey're really ready for mass consumption, it will be too late to get intothe market, so make your play now.

Bots automate marketplaces, so 1998 will be a year for things like LinkShare, which shows commission offers to sites seeking ads. Publishers arestarting to grok commissions, so the race is on between start-upsand big-money outfits to completethe feedback loops and really serve readers' buying interests. In time,the best marketplaces will have a powerful editorial focus, and a transparentlink between credible (news, views) and biased (ads, stores) information.They'll model the way readers buy, rather than the way stores or anyoneelse sells.

In the world of impulse buying, I saw alot of online couponing solutions- they'll have their day and guesswho wins that battle? Merchants thatsell this stuff , meanwhile, willcontinue to scale, but it's those that putthe money into marketing that will reap the short-term rewards.

Internet telephony will break the stranglehold of international tollrates in 1998 - I heard a great demo in the Lucentbooth of 9.6 Kbps audioconferencing supportable by any H.321-compatiblesoftware (like Microsoft's NetMeeting). I also saw lots of new search techniques,like Tetranet's Wisebot ,aimed at giving the new marketplaces, which chairman Don Pare' calls "knowledgeboutiques," their own fast, specialized, efficient Yahoo-capability.

One final word. AOL has solved manyof its problems in its Release 4.0 and AOL.Com announcements. As usual,the solutions will eventually create new problems.

SSP (Shameless Self-Promotion)

Here's the deal. We're going semi-pro for 1998. JohnAudette will host the e-mail editions of A Clue, and we hope you'lljoin the discussion and help us build a digest of Clues we can share. (TheWeb version stays with Sean Cafferkyand Tommy Bass.) To pay forall this, we'll add a weekly ad in January. I figure on calling it shameless promotion, running along this SSPwe've always done.

Still, it's Journalism -- checking the news, calling people, listeningcarefully, writing on deadline -- which keeps the Clues coming, althoughI also handle consulting and commercial writing (ask about those ratesvia e-mail). If you're looking for excellent work, as found in AtlantaComputer Currents , on AccessAtlanta or Net Marketing magazine andInternet & Electronic CommerceStrategies don't wait for the e-mail -- give me a call at 404-373-7634.

And now back to our show...


Making the MultiLingual Web Work

For 1998 the fast growth, albeit on a small base, will be on the overseasWeb. But how do you support users in languages other than English?

Well, it'll cost 'ya. If you host overseas, you may be building disparate, autonomous organizations - potentialrivals if the relationship sours. The alternative is to host everythingcentrally, and if you have something valuable and you're scaledfor big Web business , this can pay-offbig-time .

Your biggest problem, however, is synchronizing your content and translatingon-the-fly. Global Sightand Alis Technologies offer solutions,but they'll cost big - maybe $50,000 in Alis' case. And then you have todecide how to translate. Machinetranslations are available, but they're pricey, too, and not very accurate.Human translators can cost 30 cents a word - this week's issue is over$500 already, per language. So you'll need to go through your site, anddatabases, deciding when to use what kind of translation - human, machine,or machine-assisted.

Is it worth it? The folks at Alis say the most popular languages beingWeb-translated by U.S. companies today are Latin-American Spanish, Latin-AmericanPortuguese, German and Japanese. Chinese, the Scandinavian languages, andsome Eastern European tongues are coming-on . The best Clue is to go atthis market-by-market, and decide where you need to be before you investa thing. Then fight hard for that market, because the locals surely will.

Sex

Here's a Clue for Monty Python fans. The struggle between business andgovernment is a what struggle...a what struggle. If you answered "apolitical struggle," go to the head of the dialectic. You're clued-into "sex on the net."

This "industry" caters to a high income, highly motivatedclientele. (We call these folks early adopters.) It's an object lessonin how any government can move against anything it deems threatening, therebyincreasing the threat. If you're not fighting the evil (as defined by politics),you must favor it, right? The principle that "thought wants to befree" and the principle that "capitalism is always OK" liesin opposition to this basic political impulse. If you believe in the firsttwo, you better be against the guvmint - or your "principles"are just flags of convenience.

Seen in this light, software filtersare simply political tools. That's why it's dangerous to have a filterforced on you (by the boss) or your children (by the school board) - it'ssomeone else's politics they're laying on you. If you do it to the kids,at least it's your politics they have to follow...they can accept or rejectit when they're grown.

How do we know this is all about politics, not business and not morality?If there were some mutual trust, all content problems could disappear ata stroke. You would simply put all sites that discuss sex (regardless ofwhether they're pro or con) into a new top-level .sex domain. (You couldalso put all political discussion into a .pol domain, religion into an.rel domain, and news sites like this into a .news domain.) Filtering thenbecomes simple. But in a political struggle all sides prefer confusion-- it lets them nurse a sense of political grievance.

Megalomania

The best argument against monopoly is the megalomania of the monopolist,their tendency to confuse their own goals with the greater good. HenryFord not only built the Model T, but a great social compact with his workers.In later years he became an isolationist and fierce union-buster. DavidSarnoff built RCA and the NBC network, but in his later years he stolethe patent for TV from its American inventor and tried to re-write historyon behalf of his own Russian licensee. William Randolph Hearst...the namesays it all.

So now we come to Citizen Gates. The contemptuous way he dealt withthe unfavorable decision in his anti-trust struggles over Explorer speaksvolumes, and it doesn't speak well for the future. If you have MS Officeand Netscape Navigator, but lack Explorer, Office will find Navigator andintegrate well with it. You can get support for ActiveXthrough a plug-in . The claim Windows has to be re-written to complywith Judge Jackson's wishes is bogus.

Why piss-off a judge for short-term advantage? Why ignore the fact thatJustice (and the states) can, at any time, launch new, more costly, more-protactedanti-trust actions of their own? Why ignore history, and the lesson thatsettling benefitsshareholders? The truly great don't build Xanadus - they stayin their old homes and hometowns. It's really sad for all of us - we may be dealing with this Microsoftanti-trust story for decades.

Tracking The Shakeout

The Internet shake-out predicted here months ago continues to gain steam.Let's see who's winning and who's losing.

DoubleClick is a winner, witha $30 million public offering, high-profilerivals from its "home" industry, and lots of technicalalternatives , enhanced alternativesand wannabes . Meanwhile, reality bitMark "the Internet is like TV" Kvammein the assets. Quick justice is why I love covering this business.

The same thing's happening in the editorial wars, where the clued-inRobert Hertzberg won big in the latestMecklermedia re-organization. Hertzbergneeds the big budget and "Internet World" name to compete withIDG's Infoworld and Ziff'sZDNet . Now he's got a fighting chance of winning the war. Alan, yourClue is to make sure this man doesn't get recruited away.

Clued-in, Clueless

Clued-in is NetPerceptions, which seems to have won the high-end of the personalization spacewith its GroupLens "recommendation engine." It's nice to seesome Minnesotans beat those California Yahoos at their own game.

Clueless is IBM which continuesto let Greg Kinnear ask "what's an e-business?" (or was it "whathappened to my career?") instead of giving us solid examples of e-businessesit's helped build . It's too-late to tell me what you're gonna do -tell me what you've done.


A Clue...to Internet Commerce is a weekly publication of @Have Modem,Will Travel. It's sent free to a qualified e-mail list. Subscriberscan receive either a .txt file or an .htm file. The .htm version featureslinks which become active when online with a browser, or an e-mail packagelike Netscape 3.0. (Let us know which you prefer.) To take your name offthe list, simply write REMOVE as the subject, or content, of a messagereplying to this post. To request your free copy, write us at DanaBlankenhorn@worldnet.att.net. We're on the Web at www.tbass.com/clueand www.ppn.org/clue.