A Clue...to Internet Commerce
by Dana Blankenhorn
Volume II, No. XII
For the Week of March 23, 1998
The failure of such 'zines as Word and Charged to succeed in the market has people like Ken Glaser wringing their hands and The New York Post's Mary Hunn jumping for joy. The point they share is that innovative content, freed of "traditional media shackles," in Ken's words, has no place on the modern, Fortune 500 Web. "If they're not mainstream enough, the likelihood that they'll either thrive or even just survive is nil," writes Hunn (who probably wouldn't know a real Clue if it bit her on the bum.)
Let's take a reality check. Content by itself is not a business. Not all businesses with great products win. Winning businesses also innovate in their marketing, and in the way they do business. Relying solely on advertising for revenue, when the Web is capable of so much more, is Clueless. Good business sense, in other words, could have saved both these 'zines, and could still save others.
Content builds a community, which in turn does commerce. Call these the "Three C's" of the Web. You read this content and interact with me. I use that community of interest for a commercial purpose, to get freelance journalism assignments. That's my business model. Word and Charged didn't even have that. So instead of doing an autopsy, let's look around and see if other news stories provide Clues you can use for turning a profit.
Simutronics, a games company that started life on the old Genie service, signed revenue sharing deals with Excite and Planet Direct. Neil Harris of Simutronics sought these deals after AOL adopted a pay-for-play model on games he couldn't stomach -- he's charging players just $7.95 to $9.95 per month. Simutronics has 50,000 subscribers.
Winfiles.Com, formerly known as Windows95.com, signed an affiliation deal with NetSales. Winfiles will set up a software "store" with its own trade dress, and NetSales will manage it. NetSales brings all those high-cost services Winfiles couldn't create on its own to the table, things like real-time order processing, flexible payment and delivery options, a fraud screen, and real-time sales reporting being just a few.
You can sell service, you can sell products, you can organize your community and get it discounts...there are all sorts of ways for a 'zine to stay in business. The "big media companies" have figured out none of this, and few have generated the kind of intense loyalty 'zines of all kinds enjoy - nor will they, because big media can't see the small niches.
For proof I'm speaking truth, let's autopsy the late New Century Network. Its newspaper chain partners couldn't agree on a business plan, the group said in a press statement, the first admission they never had one. The only thing of value in the whole deal is a Web ad network owned by developer Real Media. RealMedia now plans to focus on customized content sponsorships - there's another Clue (and a link) you 'zines can use.
Yeah, that was yours truly on CompuTalk radio last Saturday, March 21. I'm also talking to lots of new publishers, thanks to contacts made at Internet World last week. We should also have directions next week, regarding automated delivery of this letter via Audette Media - we'll let you know on that and our own URL - www.a-clue.com. (Classy, eh?)
Still, you know the drill. Just 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). If you're looking for excellent work, as found in Atlanta Computer Currents, on Access Atlanta, at PlugIn Datamation, in Net Marketing magazine and Internet & Electronic Commerce Strategies, or right here, don't wait for the e-mail -- give me a call at 404-373-7634.
And now back to our show...
The disconnect continues.
You could see it in the face of Bill Gates as he testified before Orrin Hatch's Judiciary sub-committee. You could hear it on the Senate floor and in the Justice Department as lawyers and law enforcement pushed "protection" from gambling and smut. You could feel it in the silence surrounding the "privacy summit" panels at Internet World, as the industry wondered why no one seemed to care about what they cared about.
It's the disconnect among the imperatives of business, government, and the people - who are both consumers and voters. Since all sides combine in the field of Internet Commerce (and since economics has isolated the Internet media into covering only business issues) your humble servant is left alone with the story.
Let's start by breaking it down. What I want as a voter is protection from crooks, and freedom of action. I want a cop on the beat, but not in the house or looking over my shoulder. Most businesses feel they can protect themselves, except perhaps from bigger, more powerful competitors. Government is a business problem, to be worked as well (and for as little) as possible.
Government, meanwhile, consists of two groups of people. Bureaucrats have an imperative to grow, to gain money, power, and people. For this, they need politicians who desire, in turn, re-election or election to a higher office. Bureaucrats win through complexity and priority - the more the complexity and higher the priority, the bigger their agencies grow. (It's true whether the problem is street crime, warring nations or children who need educating.) Politicians' markets trade once every few years, up-or-down, and they win by getting more money (from business) and positive mindshare (from voters) than their opponents.
Consumers can control both business and government, through purchases and votes. If we could get our own motivations straight, many contradictions would disappear. The trouble is, even when we're online, we're terribly diverse. Worse, our market needs may contradict our political desires. The greatest service we could do ourselves is to reach consensus, a summary of what we want online we can put on a postcard. The trouble is no one who could organize this effort comes to it with clean hands.
Businesses serve our consumer needs, while exercising more control over government than they'd care to admit. The Microsoft flip-flops of Bob Dole are just one example. As a politician his instinct was to oppose intervention in the market, even if one business was mugging another one. As a lobbyist he's a freelance, and his influence is there to be peddled so long as it doesn't strain his credibility.
A politician's needs for positive mindshare get a much bigger boost if he takes on big public issues than if he works in-depth on more important matters. The latter are usually pushed to bureaucrats, whose interest lies in complication, since that brings them more money, power and people. That's why "protecting children" gets more play from John McCain than protecting business, why big businesses feed bureaucracies (while hating them) and why everything in Washington becomes an arms race Main Street abhors.
In "City Slickers," Billy Crystal asks Jack Palance for the meaning of life, and Palance' "Curly," an old cowboy, holds up one finger. "One thing," he says derisively. "Figure out what that is and the rest takes care of itself." That's what can end the disconnect. What's most important to you, and to your business? Get it down to one sentence - one short sentence - and you're well on your way to getting the most from the present dilemma. Only when we boil our common desires into one brief document will we get the Internet we deserve.
My suggestion? Bill Gates should drop "Slate.com" and combine its staff with the resources of the Internet (e-mail, conferences, software, databases, etc.) to come up with that document. Hire an unbiased front man (Bill Bradley?) to direct the whole thing. Get sign-off from industry and interest groups. Release it, say, on July 4 and voila - a public service that turns Sam Walton-J.P. Morgan-Henry Ford into Thomas Jefferson. It's a task worthy of the World's Richest Man, one only he has the free resources to sponsor. (Well, maybe Paul Allen could do it.) He's never really told us what his politics are, but he can serve those interests best by discovering the Internet's agenda, and pushing it.
Lost (by me) in the commerce hubbub at Internet World was a coming, long-overdue standard that should finally bring some action to today's static web.
It's called the Document Object Model (DOM) specification, and it's being dealt-with in the World Wide Web Consortium working group on the Extensible Markup Language (XML). The goal is to end the "holy war" now going on between Microsoft's ActiveX, based on a technique called variously "COM" or "DCOM", and "CORBA", backed by Netscape, Sun and IBM, among others. DOM would provide a common interface for all these objects, and it would be both platform and language-neutral.
If Microsoft approves the final draft, it's a major deal. ActiveX is its key mechanism for making the Web proprietary, and while this wouldn't surrender those keys, it would give the Web a way to use them easily. While there is, as yet, no true market for CORBA objects (IBM's "San Francisco" project, announced last summer, is designed to create one), there will be one in time, and this lets "Big Green" into it.
Any piece of software - a dancing baby or an online cash register - can become an object, if there's a common way to use such blocks of code and combine them into larger projects. The result could be a huge market that would save everyone trillions of dollars that's now spent reinventing these wheels. It's not there yet, but this is an important milestone along the way.
A new reader wrote with a solid, clear point all online merchants need to hear.
Answer your e-mail. "I have found an unusual number of businesses that have websites and encourage e-mail from the consumer. Then they completely ignore any questions or inquiries sent," writes Michael . "The net result of this in my opinion is worse than if they had no website at all." Michael names names - NBC Sports, Harry and David's, and the Benziger Winery . Apparently, they didn't answer his notes. (We will, Michael, we will.)
It's a very important point that needs to be made again-and-again as physical businesses move to the Web. Put e-mail addresses everywhere, and answer those notes quickly. Every note is an opportunity to gain a friend or - as we see here - lose one. And don't forget that every satisfied customer may tell one friend, but every unhappy customer will tell 10.
Microsoft has been highlighting education in recent ads, and I've watched them closely. I've watched them closely enough to be angered by them.
The computers at "Shoal Creek Elementary School," which access the Internet, and at an English private school, which only run CD-ROMs in the ads, are in a "lab." This is monumentally Clueless. Computers are tools, not toys. They let you know how each student learns, and where each one stands, so teachers can spend their time teaching (rather than lecturing, giving tests, or doing paperwork) and deliver a custom product to each kid. (Just as in Microsoft's "Freightliner" ads, with the "we could be heroes" theme music.) Most important, computers should be everywhere, and they should always be networked.
Clued-in is Centraal , now offering an interesting way of dealing with complex domain names . It's a subscription database that will index your URL to your real business name, and it costs just $40/year. Here's what's most clever -- Centraal already has a directory of 200,000 Net addresses that are not currently clients, so the service is already useful. The company's filled with Next Computer veterans - guess they now know what "Real Jobs" are. (Ouch!)
Clueless is Sanford Wallace, who still doesn't get it, and thinks moves against spam violate his First Amendment rights. Spamford, we're not talking about free speech. We're talking about commercial speech, and stealing bandwidth. The success of many ISPs in filtering spam from their servers (with help from the Mail Abuse Prevention Service's "Realtime Blackhole List" ) rather than passing it along could finally stick a fork in Spamford's "business plan." Especially since the new, commercial version of Sendmail includes these anti-spam tools.
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