(formerly "A Clue...to Internet Commerce")
by Dana Blankenhorn
Volume II, No. LI
For the Week of December 21, 1998

This Week's Clue: Big Iron and the Boob Tube 

SSP (Shameless Self-Promotion)

Bots and Gift Engines 

The Ad That Wasn't There 

Capturing the Back End 

Clued-in, Clueless

This Week's Clue: Big Iron and the Boob Tube  

What was the big e-commerce story of 1998? Well, there were two. First, strip away the sideshow (Gates, not Clinton), and the hype (especially the stock market variety). Two Clues stand out. First was the rise of Big Iron - mainframe-based Web sites and industrial-strength databases. Second was the Boob Tube, the true driver of Internet Commerce. 

Let's take the first Clue first. When the Web was first spun, many Web site hosts put their most popular wares on 486-based machines. They were rack-mounted, inter-connected with Ethernet, and there were often twinned T-1s going out the back, but the CPU just wasn't the bottleneck. 

That wasn't true anymore in 1998. Now sites must scale. They must not only be able to support tens of millions of visitors per month to be competitive, but they must be able to track and report on those visits, personalize those visits, and integrate with huge databases to build pages on-the-fly. Three decades ago the biggest machines were called "Big Iron," and the 1998 Web represented the return of "Big Iron" to its central place in the computing environment. When sites like Amazon and Yahoo succeeded with scaled, professionally managed sites, competitors had to offer the same rich experience. This raised the bar for gaining significant e-commerce market share...at least for now. 

The fact remains you don't have to own your server and network  and you don't even have to own your own e-commerce back-end . So many sites caught on to that first Clue that by year-end both Above.Net and its chief rival, Exodus Communications  were able to join the Internet IPO frenzy. A major break came in December, when Lycos caught on to outsourcing and was able to bring forward a version of Delta's "SkyMall" in just a few weeks, transforming itself instantly from a search engine to a shopping center. 

What drives Web success is attention. Yahoo, Excite and Lycos caught that attention in 1996 with valuable search services, and they spent 1998 trying to capitalize on that attention by becoming mini-AOLs with e-mail, chat, personal home pages and shopping services. Zona Research coined the term "portal" to describe this phenomenon, and by the end of the year everyone was claiming to be a "portal" of some type. But what's a portal, really? It's simply a site that gets so much traffic early in a user session it can control that user's experience, or claim to. 

Now what is the 20th century's best tool for drawing attention? That's right class, it is TV. The power of TV over the Internet, especially cable TV, was made manifest in 1998. Quick, what are the Web's top two news sites at the dawn of 1999? The answers are MSNBC and CNN. CNNfn is also in the Top 10. So are E!Online and ESPN.Com. (They picked up a key Clue on the value of a short URL.) Only one publication, USA Today, is in the Top 10, according to Media Metrix. That's why Disney picked up its stake in Infoseek , and why NBC snapped-up Snap! 

But it goes further than that. It seems there are now two kinds of people in America - those who are on TV and those who aren't. I'm not on TV, but Jaclyn Easton is. I was scheduled to be interviewed with her on NPR last week, and I know she would have done better than I would have. So she's famous, and her book sells like hotcakes, while the publication you're now reading remains a niche product. (I'm not complaining, I'm just stating a fact.) 

Despite all the Internet hoopla, TV is and will remain the best broadcast medium. Whether you're broadcasting a brand, news, or a personality, you'll reach more people faster on the "Boob Tube" than in any other way. How those of us on the Internet deal with this reality will determine the future of this medium. We could become just an extension of the broadcast medium - NBC, ABC, and CBS all hope so. But I don't think that will be the case. It's still unclear how much of their Internet usage people are willing to give to TV. Headlines and entertainment, yes, but anything more must (and might) be earned. The expectation on the part of TV programmers that they can (or should) control what users do online could yet spark a backlash. My own guess is that Big Media will continue to be at the peak of the Bell Curve in 1999 - but the big stories of 1999 will be around the edges. 

SSP (Shameless Self-Promotion) 

I've got a new daily gig. ECommerceTimes , a news site specializing in electronic commerce, has signed yours truly for a daily "viewpoint" feature, which launched last week. 

There's still time to buy "Web Commerce: Building a Digital Business," , by Kate Maddox with yours truly, for Christmas, at the attractive price of $20.95 (regularly $29.95) from Amazon.Com. It's part of the Wiley/Upside series. If you're a book publisher, I have two other proposals available for consideration... 

A-Clue.Com is sent via e-mail to over 1,000 Clued-in subscribers each week, and it's the Monday e-commerce column of Andover.Net . You can subscribe (or cancel your subscription) through an e-mail to a-clue@list.mmgco.com or (for .txt) a-clue_textonly@list.mmgco.com. If you don't get service just drop me a note at dana.blankenhorn@att.net. (If you'd like to sponsor A-Clue.Com, a note to the same address will start the process.) 

I make my living writing for such publications as Net Marketing , Boardwatch, Datamation, and Advertising Age . So it's Journalism -- checking the news, calling people, listening carefully, writing on deadline -- which keeps the Clues coming, although I also handle consulting, speaking assignments, and commercial writing (ask about those rates via email). If you're looking for excellent work, give me a call at 404-373-7634. 

And now back to our show... 

Bots and Gift Engines  

There's a problem faced by makers of shopping "bots" and "gift engine" software, a problem publishers can help merchants deal with. The problem is, in a word, credibility. 

This is important because the biggest problem most Web shoppers found this Christmas came when they didn't know what they wanted, especially when they didn't know what they wanted to get someone else. In the real world, this problem is dealt with by browsing the mall, by calling a store's personal shopper, or (if you're lucky) off-loading the whole problem to an assistant. The promise of this technology isn't just that it Web-enables such advice, but that it democratizes it. 

The problem, in a word, is credibility. Current "gift engines" work only with specific merchants' offerings, or as is the case with Junglee, they're owned by specific merchants (Amazon). While this makes such programs akin to personal shoppers, that's a service people pay for in many ways - and they pay more for it than most in the middle class are willing to pay. 

Well, Microsoft's in this game, so here's one place where it can play it - MSNBC. If Microsoft's bot or gift engine were, in fact, MSNBC's, and MSNBC put its credibility behind the effort, more people would trust the effort. The same alliance could work between, say, Amazon and CNN. Will you trust Amazon's shopping advisor, or CNN's? 

This is the best Clue I can offer to Gannett, Cox, Times-Mirror, and The New York Times - the publishers who spent the recent Jupiter Conference pretending stock gains made their Web efforts profitable, or you can make money without accounting for all your costs. Helping people use the mall is your business - building the mall is not. 

The Ad That Wasn't There  

A few years ago IBM featured a large merchant I hadn't heard of at one of its press conferences. The merchant was SpeedServe, a company launched by Ingram Entertainment, the giant distributor in the suburbs of Nashville. When I met them the founders had an online video store and an online bookstore. They were planning an online game store. 

The sites were fast, the graphic look was attractive, and the order fulfillment was scaled for a lot of traffic. They had it all, except for customers. When I asked their executives why, I was told "we wanted to make sure we could do a lot of business before we announced ourselves." 

What happened to Speedserve? They were bought last month by Buycomp.Com of Las Vegas, and emerged as of Buy.Com. Buy.Com has been all over my TV lately, with ads featuring "space aliens" sporting worse make-up than the earliest "Star Trek" episode. The company bills itself in its ads as "The Internet Superstore," and its main page is basically a collection of links, many of which go into the old Speedserve sites, written with Microsoft's Visual Studio 6.0. In addition to links for the sites' main pages, there are links that go to specific types of books, videos, and computer hardware, among other things. 

I don't know how well Buy.Com will do this Christmas, or beyond this Christmas. (Right now, it looks like most Internet merchants will do very well indeed.) But I'm fairly certain the folks at Speedserve aren't doing as well as they might have. With its site and its systems, Speedserve could have been Amazon.Com. It will now have to spend enormous sums of money to gain share in a market it could have dominated a few years ago. 

It reminds me of a Sherlock Holmes story, in which the key clue was the dog that didn't bark. Call this the case of the ads that didn't run. 

Capturing the Back End  

The failure of computer publishers to innovate on the Web has already cost them dearly, as brands like Dell and Gateway bypassed their editorial role with TV ads leading directly to their Web sites. 

There was another opportunity for these publishers, in offering advice after the sale, but that's disappearing too. Dell has licensed search, parsing, and knowledgebase construction technology from AskJeeves.Com  to build Ask Dudley , a new interface to its customer support files. (7th Level, which offered a "talking" version of Jeeves for its kid's site , must be hustling to put words in Dudley's mouth as we speak.) With the simpler Jeeves interface, Dudley makes it easier for Dell customers to help customers order spare parts and get specific help on their machines, by linking data on the user's machine with Dell's support data on all machines, then delivering that in a way that's easy on the mind. 

What's interesting isn't that Dell's taking over the world, but the way these kinds of innovations filter down. Do you need industrial strength Web site hosting  or order fulfillment capabilities? You can now get to market quickly with a powerful sales site, without the heavy investment needed even a year ago. It now takes some heavy marketing oomph to fill such a site with customers, but it can be done. So it will be with customer service - the hidden trend is outsourcing. 

Clued-in, Clueless 

Clued-in is Network Solutions , which bought 10% of Centraal with an option for more. The mis-steps and arrogance of NSI are legendary, but they may have finally figured out what their business is - bringing order out of chaos. 

Clueless is the Los Angeles Times . Here, in a nutshell, is everything that's wrong with Big Media coverage of technology. No external links (even when they're useful), multiple "pages" on single stories (to post more ads), incredible arrogance (they think they're a monopoly, but the paper reaches just 16% of area households) and Clueless assumptions about the business world (only the big survive). If offered a job here run, don't walk, in another direction. 

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