A Clue...to Internet Commerce
by Dana Blankenhorn
Volume II, No. XIII
For the Week of March 30, 1998
Every Web site has to place bets on technology. If you bet your business on push technologies like "Intermind," you lost. If you bet on RealAudio, you won. If you bet on Java, the assumption is, the jury's still out.
So it would seem from the news of the last few weeks. Hewlett-Packard said it will create a Java Virtual Machine, with or without license, and in turn license it to Microsoft. It would presumably support both H-P and Microsoft extensions. The news put a damper on Sun's JavaOne conference, where hatred of Microsoft is becoming religious in its intensity . This also had the increasingly clueless Zona (Microsoft rules) Research claiming the Java ideal is dead, and (as usual) Microsoft will take over the world.
Wrong, and wrong again. The key word in the above paragraph is "ideal." In today's cynical age, it's easy to forget that ideals have power. One can argue over why Communism fell, but what filled the gap were ideals like democracy, capitalism and nationalism. The troops came in at Tienanmien, but capitalism and democracy keep bubbling up from the bottom, and the leaders now just mow it, rather than trying to pull it out by the roots.
The same trend's true in technology (believe it or not). Java is bigger than Sun because it expresses an important ideal. Write it once, run it anywhere. Functions that threaten the ideal are rejected. Despite all the wailing about sites "optimized" for Explorer 4.0 or Netscape Communicator, the vast majority of Web managers don't sweat it. They just ignore the extensions. The resulting Java may be just "a Kaypro on every desk" and folks still have to do too-much re-jiggering and "optimizing" of Java code for my taste. But going outside the basic functions called "100% Pure Java" entails risk to a developer, and unless a consensus accepts an extension why take one?
Two recent news stories can illustrate this point. A recent conference of CIOs called "Crossroads" revealed a solid consensus against Microsoft. No one wants to become dependent on a single vendor again, as they once depended on IBM. (Catholicism's still big, but Protestantism isn't going away.) Second, The Wall Street Journal's finally discovered what the rest of us have known for a long time - the real threat to Microsoft's Web server isn't Netscape's server, but Apache. Apache (it has nothing to do with native Americans, but a typical programmer's joke, since it's "patched" together from a variety of sources - a "patch-ee" server, get it?) is still run on most major sites, and for good reason. When you need a fix or a new function, why wait on any vendor when you can either write it yourself (because you have the source code) or find a free patch on the Web? "Doing it yourself" isn't just DIY when much of the world's doing the same thing.
All this means Microsoft can't take over the world, any more than China can cap capitalism. Microsoft can ride the tiger, trying to steer the herd in its direction, but a stampede can't be corralled. When people are penned-in, as in Singapore, Microsoft can sign a deal to become the de-facto standard for all national networks. But you can never learn what you need to know in a lab - you have to deal with the real world.
Ideals light your way in the real world, and what gives ideals power is how widely they're shared. There's an important lesson here for XML, the latest HTML extension coming down the pike.
So your key technology Clue is this. Don't give in to cynicism. Buy your ideals instead of the hype. Even if ideals disappoint you at times, you'll like the person you see in the mirror next morning.
We're trying to run this "business" on a more businesslike basis, hence our new URL. After appearing on the CompuTalk radio program March 21 with host Tom King, I also agreed to post these letters on the show's Web site as its "Internet" column. As usual, I'm also talking to lots of new publishers, thanks to contacts made at Internet World .
Still, you know the drill. 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, at PlugIn Datamation or in Net Marketing magazine, among other locations, don't wait for the e-mail -- give me a call at 404-373-7634.
And now back to our show...
In their zeal to find a profit from their back-issue "morgues" (although not right now), a lot of publishers are making their own Web sites useless.
I learned about this recently while seeking backing for a news story. ZDNet, it seems, moves stories from its ZDNN news feed a few days after publication so they can't even be found by the site's own search engine. C|Net stories can still be found through the site's own software months after publication, but links to the outside are often dropped. Most newspaper sites give their news stories names like "article" or "displaystory" when they're posted, so they must be renamed before they can be archived. This also has the effect of making them invisible to those who might link to them within days of their being posted.
As a publisher files stories online, they build a database that should be searchable. This can and should be one of the major value-adds of the Web. It was supposed to be the heart of the late, unlamented Newsworks site run by the late, unlamented New Century Network. It may be that, in time, publishers will want to offer access to such morgues only to registered (or paying) users. If so, make that clear, and don't anger people unnecessarily, because angry people don't listen to sales pitches, they pitch sales pitches.
Don Willmott at ZDNet thinks he's found a key buzzword for 1998 in the word "portal." Yahoo is a portal, America Online is a portal, and now lots of other outfits - from Microsoft to Netscape to Lycos, are aiming to be portals. Portals are your home site, he writes, a place you go to again-and-again, a place you spend most of your time on.
It's great analysis, if the year is 1997. Unfortunately, my calendar says this is 1998, and what Don thinks is wired is, in fact, tired. Ask yourself - how much time do you really spend on Yahoo? I thought so. Like many rivals, Yahoo is expanding its reach by buying or building related services - chat, e-mail, and integration with the telephone. That's supposedly why Lycos spent $58 million in stock for Tripod .
But expanded offerings can, and will, be judged by the market on their own merits. There's no reason why you can't get your searching done on Yahoo but have your e-mail sent to HotMail, for instance, so the whole portal analogy doesn't stand up on the Web. Lycos bought Tripod because it could afford to, because its stock is over-priced by investors who confuse a mass with a mass market. For the analogy to work, you have to charge admission - that's what builds loyalty for your offerings that aren't best-of-breed .
So what are the buzzwords of 1998? Credibility could be one. Mindshare could be a second. And how about the word profit - I like the sound of that 'un. Use the first two to create the last and, this time next year, Don will discover you, too. Of course, by then we'll be on to something else.
Here's a candidate for the year's real big buzzword - syndication. In a syndication deal you expand your reach by having others host your stuff and link to you - much as we've done with PPN and CompuTalk.
Ted Faraone of Visionary Media in New York wrote recently to say he's done this in a bigger way with WhirlGirl, his Web TV-style series launched last July. Essentially the series has migrated to five big-time Web sites that need content -- BMG's BUGjuice, E-Pub's Amused, ICL's GamesZone, Microsoft's WebTV Networks, and ViewCall Canada's BeyondTV. These "affiliates" showcase "WhirlGirl" as a co-branded offering, while the home site concentrates on "community features, games, contests, and affiliate promotions," Faraone writes. Advertisers can buy ads either directly through the "network," or take "spot" promotions on an "affiliate."
"While affiliates of network and syndicated TV are defined by geographic reach, WhirlGirl affiliates are defined primarily by genre and interest within the 15 to 35 year-old demographic" he writes. And while the affiliates work at building his audience, Ted works at building his brand. Hopefully that will mean building community and commerce, but even if it doesn't, the business model is fairly clever.
I have a love-hate relationship with bureaucracy. I've made a lifelong study of it (no doubt you have too). Any group that wants to do big things must build a bureaucracy. Believe it or not, America builds the best bureaucracies in the world.
But any bureaucracy is, by its nature, inefficient. It must have employees dedicated to its own maintenance - as opposed to its mission - and these people must have incentives and career paths depending on their own missions' growth, as opposed to any overall goal. Business bureaucracies are more efficient than government ones because the market forces their attention on real goals, and places a penalty on firms that don't keep their eyes on the ball.
Still, every successful business has a bureaucracy, and as the Internet grows so do those bureaucracies. Take MCI, which will - once Worldcom gobbles it - supposedly control over half the Web's backbone capacity. For years now, MCI's been on the warpath on behalf of Netiquette - influenced by executive vice president and "father of the Internet" Vint Cerf. I remember how in 1995 MCI promised to cut-off small ISPs that violated its views on the subject, by failing to cut-off customers who violated those principles in turn. One such principle is that you don't spam people. Sounds like someone wants to be a good citizen, right?
Ah, but watch what happens when bureaucrats get these orders. S.V. Zylph of the Foodie Forum wrote to the I-Sales Help Desk recently, saying MCI cut off his e-mail service because he was just distributing his shared "Restaurant Diners" monthly discussion list to 350 subscribers. He says MCI branded him a "spammer." In response, others complained of the same treatment and David Lundell wrote to say it's common. An operator gets an unfounded complaint and acts on it - "it is not uncommon for subscription-based lists to be mistaken for spam" he noted.
There's a happy ending here. Sylph complained to a business with the credibility and clout to get his service restored. But there are also some fine Clues here for the rest of us. In a fast-changing market, bureaucracies (even well meaning ones) are at a big disadvantage. And in such an environment, you don't want your small business to depend on anyone whose president you can't reach on the phone.
For a huge firm like Dayton Hudson, which owns the Target chain, to sell online, it must be assured it will have a hit commensurate with the investment. So their recent $120 million purchase of Rivertown Trading makes great sense. Rivertown's not a Web site, or a Web developer, but a mail-order house, meaning it has the back-office systems necessary to support a Web-based sales effort. Since it's profitable, there's little downside. Target still needs Web-expertise to enter the market, but that too can be purchased. The result may look big, and its cost means it won't be a big hit to the company's earnings, but it'll at least be keeping up with the Joneses .
Clued-in are the folks behind the Secure Electronic Transaction (SET) protocol, for damping expectations on this technology. SET requires that consumers get digital signatures (whoa!) but offers merchants the equivalent of signed receipts (yay!). Support for encryption keys are a huge chicken-and-egg problem, and the world's transaction processors have much bigger fish to fry before they can design software supporting this standard. Setco's talking 1999, but it's more realistic to think this is 2001, a Web odyssey.
Clueless this week is Vice President Al Gore, who has endorsed legislation requiring that schools and libraries buy censorware to get low-cost Internet connections. The result holds public Internet access hostage to any political kant. It's aimed at "pornography" (dirty pictures), but what about Nazi sites? Then what about other anti-semitic sites? What about hatred aimed at anyone else? Pretty soon we've banned satire. And if the U.S. is to demand censorship of the Net, how can we criticize Singapore, China, or anyone else?
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