(formerly "A Clue...to Internet Commerce")
by Dana Blankenhorn
Volume II, No. XVIII
For the Week of May 4, 1998
This Week's Clue: Real (Estate) Check SSP (Shameless Self-Promotion)
This Week's Clue: Real (Estate) Check
Every once in a while I check out an industry unrelated to the Internet, to see where they stand in regard to the Web. In this way, I can check how the reality of business squares with the hype.
This week I checked out local Realtors. It's been nearly a year since I performed this exercise and a lot has changed. Coldwell Banker has launched a national site that features a clickable map for finding listings and an e-mail service that lets you input the specific kind of house you want and get a response when a listing matching your requirements comes in. (They call it "Personal Retriever.") To make this work, of course, the agency had to build a large database, and the whole site operates inside a frame of ads. While it must be noted that this is just a slicked up version of the year-old National Association of Realtors site, it should also be noted this represents a big hunk of listings abandoning the industry site for a branded one.
Except for the "retriever" service (which does seem unique for now) the Coldwell Banker site faces stiff local competition. In Atlanta, this includes a Multiple Listing Service (MLS) site with 15,000 local listings, and a very slick look. It's not quite as slick, however, as the Real Estate Guide , which has just 3,500 listings.
Atlanta Yahoo lists 19 local real estate sites. Most are still from builders, pushing their new inventory, and some are "by owner" sites, run by entrepreneurs seeking listings from those who don't list. These are very choppy in quality - OK, they suck. What's most interesting, of course, is how the Yahoo listing misses some of your best home sources - all the national sites as well as sites like Access Atlanta that offer their own real estate listings. And the ReMax companies, which last year seemed to have early foot on technology and speed in getting listings online, seem to have lost their advantage - the member offices have gone in many different directions, reducing their effectiveness in the Web market.
We can get many Clues from this. Big money is raising the bar - clickable maps linked to databases and e-mail notifications on key listings are both great services for buyers. The reality of the Web is also apparent - consider there are now two dozen sites offering new home information just for Atlanta. What worked last year may not work this year - you've got to keep spending and keep up. And there's still a long way to go - all you can really do today is get a list of prospect homes, and agents, that can start your shopping.
What's still missing? Listings remain proprietary, increasingly so as the Web proves their value. This means it still takes buyers a lot of time to shop online. You'll spend an hour or two searching or paging through listings to come up with a list of numbers to call and addresses to check out - you won't buy directly online for many years. There's been a lot of progress, but there's still a very, very long way to go.
What comes next? Look for more realty sites to try and sell (when they should give away) links to funding sources. Look for more Realtors (and funding sources) to start replicating paperwork online, creating new services for sellers and saving time when surfers decide to become buyers. And look for big players to press their financial advantages online - watch what Coldwell Banker does closely going forward.
SSP (Shameless Self-Promotion)
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And now back to our show...
Netscape Loses Its Swerve
Watching a company you like lose its way is one of the saddest, hardest parts of this job. Netscape has now done that.
The company's problem is not that it lost market share in browsers, but that it lost market share in servers. It was never able to crack Apache's hold on the commercial Web server market - that was the iceberg that put a hole in its business plan. The move to a "freeware" browser and support for Linux looked clever, but a peek inside shows it's supporting a commercial version of the freeware OS, not the main version. There's no income there.
Having failed in its chosen market, Netscape's now trying to win for investors by turning its Netcenter into a real competitor for Yahoo and the other "portals" (formerly search) sites in the public market. The move makes financial sense since the search sites are drawing incredible amounts of capital from investors who don't know better. It makes no business sense for two reasons - this is not Netscape's business (so it's a distraction) and Microsoft is about to torpedo the whole category with "Start."
Still, analysts like Alex. Brown's Mary McCaffrey point glowingly to AT&T's possible involvement (as if they know anything about this business) and predict Netscape's Web site revenues could rise 50%. Never mind that the search engines that had been putting big dollars into Netcenter are not planning on renewing the contracts - which are falling due. This prediction reminds me of Wile E. Coyote still chasing the Roadrunner after he's run past the edge of the cliff. A Clue to Mary - look down. (Ooops.) Given the financial reality - the engines' stocks are up, Netscape's is down - the engine Netscape chooses gets a big advantage in the coming negotiation. But even if they take the company, the betting here is Netscape will really get very little.
Netscape missed its big opportunity to make nice for its shareholders last year, when it didn't push for its own acquisition by IBM (even H-P or Sun would have worked). Now it's too late. I no longer think there's much even the Justice Department can do - Microsoft is about to get its browser monopoly by default.
Cheesit -- The Cops
The movement by governments to control the Internet continues to gain steam. As always, they're interested in the wrong things. Rather than looking for victims of scams and hate, they're trying to extend their own criminal laws against speech to cyberspace.
The latest news is from Canada, where Quebec businesses were warned they must obey the province's dual-language laws on all their Internet ads and Web sites. The law doubles costs for provincial businesses that try to compete online, but locally it's good politics. It's also good politics to define hate speech as criminal, which is why Fairview Technology Center Ltd. of British Columbia was forced offline. The company said BC Telecom was trying to make it liable for its "politically pornographic" content. In a third case, InterNIC is refusing to register any URL containing the "seven deadly words" made famous by George Carlin a quarter-century ago (although not their foreign-language equivalents). As though sex sites don't exist...
By themselves, the cases seem meaningless. But increasingly governments are trying to extend their authority across borders. The U.S. wants to stop Caribbean gambling sites. In the B.C. case, the Canadian government wants the U.S. to stop hosting online Nazis. Quebecois companies can move to Ontario to avoid the French-only laws, but if they physically operate in Quebec that government may still go after them. Operating the Web with no law won't work, but neither will the extension of all laws across all boundaries. Failure to grasp this key Clue is going to get a lot of people hurt.
Competition In The New Niche
Last week's A-Clue.Com described the self-publishing offerings of Trafford Publishing. Since then, much to our surprise, Bruce Batchelor of Trafford sent us some pages from Ingram Industries' Lightning Print unit. They're offering similar services, and most interesting they're targeting the book publishing industry. The company is willing to send publishers their wholesale price, less a printing fee, on every order starting from quantity one. Batchelor thinks competition will increase the market, and we agree.
Exclusives: Threat or Menace?
A few years ago we learned much of the Web ad market was phony, since it consisted of search engines passing money among themselves. The same firms that were drawing the largest ad revenues were also the largest buyers of Web ads. Everyone's books looked better, but little money actually moved. The result was a crash in Internet stocks, which has since been reversed (except for a few companies, notably Netscape).
It's becoming clear that "sponsorship" deals for "exclusive" access may be this year's equivalent. It started with AOL, gaining millions from CUC (Cendant) and others for exclusive positions in its online mall. Now the search engines are pulling the same stunts - the latest to cross my desk is a deal between Excite and Cybershop . Ticketmaster, which claims (erroneously, we think) that links to its site are assets it should be allowed to control, has signed a similar deal with N2K, so people who buy concert tickets can purchase the CD directly. What's wrong is the assumption that users won't figure out the scam before the up-front's earned back. Helping people buy is a service. Giving them no choice is a scam. These deals stink.
Last year we did a feature on Webrings, which let Web sites with equivalent content lead users around a "ring" of such content, hopefully drawing new readers from those who like competitors.
Recently the subject came up on I-Sales and there was some new insight offered. While the technology itself is promising, amateurish execution has hurt its value, wrote Nancy Roebke of PR Newswire's Profnet service. "Too many rings have broken links on them," she said. "People put the rings on some obscure page of their site, but promote their home page with other ring participants. You get to THEIR site but you can't get to the next in the ring." M. John Allen of Destiny Worldwide called them "a long term proposition," warning "it takes a lot of time to set one up" and newbies may have trouble inserting the required codes.
Rodney Blackwell , however, is sold on them "if you take the time to set it up and properly put it together." The concept is a proven traffic builder, it's free, but with patience it will work "as long as you keep the companies joining along the same subject lines."
The best Clues from this? Webrings need some professional help. If you've got a site featuring electronic commerce comment that's realistic, and that's updated regularly, drop me a line. If you've got more time than money for promotion, and you're willing to be professional about it, you might also explore the possibility of investing time in building a Webring. But this ring may be at the end of its cycle. Unless some professionals are willing to enter the fray (by associating with rivals) this tool could be headed the way of push...
Clued-in (again) is Hewlett-Packard, specifically its Net Metrix unit. They've got a new high-end analysis tool called Firehunter. The package collects Internet Service Provider (ISP) statistics for network managers, and costs $26,000, but because it's high-end, only an H-P can carry it off. Reports are generated by Java inside a browser, and can help ISPs fulfill the "service level agreements" that generate the big bucks. The key Clue here is to pick on someone your own size - that's what big firms call niche marketing.
Clueless this week is Rob Gebeloff , who writes for the Bergen Record of Hackensack, New Jersey. Someone thinks he's a cyber-columnist, but he is in fact a reporter who doesn't do his homework. I've read several of his columns, and last week's is typical. First he complains bitterly of Hotbot not registering the movement of his personal site (as if anyone should take software's failings personally). Then he goes into a rant about AOL's "responsibility" in Sidney Blumenthal's lawsuit against Matt Drudge. (If he'd opened his browser he'd know AOL's been stripped from that suit, as the Judge in the case bought its argument it's not responsible for the Drudge sludge.) He then concludes with a prediction sites will be held legally responsible for the content on sites they link to. "Sounds like editorial control to me - you were the one who decided to link to a site with the defamatory statement," he writes. Sounds more like an idiot to me.
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