This Week's Clue: Go (Where) Dot Com
SSP (Shameless Self-Promotion)
The Serendipity Clue
Hard Numbers on Christmas
All the hullaballoo over Disney's Go.com launch misses the point, for the usual reason. By looking at tomorrow's news through the prism of yesterday, the analysts have gotten it all wrong.
So what's the deal? Disney, through Harry Motro, is aiming first at controlling and maximizing revenue from its existing properties. This is a defensive move, children. Want a Clue that this is so? Look at the new URL for Disney's video unit - disneyvideo.go.com. By moving all its properties over time into the same URL - Go.com -- Disney gets to sell all its efforts, online and offline, through a single, easy-to-remember trademark. (That's why AOL switched from ABC to CBS as its online news provider - Disney dropped it.)
Now, as to the search engine, and its decision to refuse ads from "porn" sites. I think it goes further than that. Do a search on, for example, the term "Spice Girls" on Go.Com. Now do the same search at Excite or Yahoo. What you'll find (now or later depends on the efforts of software engineers) is that Go won't find dirty pictures, but it will find the Mels, Emma and Victoria. (Geri left last year, remember? If you had a 10-year old girl in your house, you'd know that.)
What we're talking about, in other words, isn't an edited index, but an index with an editor. There's a difference, as any journalist knows. An edited index has rules, which are followed rigidly, and the result is often idiocy - you can't find what you don't want but you can't find anything else, either. This, in a nutshell, is the problem with every "cyber-nanny" product on the market. Now, put an editor, with credibility, in charge of an index, someone who can identify exceptions and who has a sense of the audience's needs. Yes, it's a huge job, but Yahoo's too busy pleasing analysts and everyone else is relying on software. That's Phase One of the Go.Com business plan.
The point is it's only phase one. Phase two is to build a single unified brand, in which the products of that brand - news, sports, entertainment - are always readily accessible and always take precedence. Phase two builds directly upon phase one, by putting the "Web credibility" of a fair, edited index on-screen at other sites owned by the operator of the index. Oh, and they can all have a single, integrated "department store" in the back room, guaranteeing orders of Disney, ESPN, and ABC merchandise are handled correctly. You've now got the infrastructure to capture orders for tours, reservations at hotels and restaurants - everything Disney and its divisions can possible sell. That's phase three.
Oh, and we haven't yet built a "portal" yet. We haven't started giving away e-mail accounts or home pages, we haven't signed an ISP deal, we haven't done most of the things Excite, Lycos and Yahoo did last year in the name of "expanding their brands" - things Infoseek conspicuously did not do. That can wait for phase four.
It's an audacious plan. Its success (if the expenses don't kill it, if the suits don't throw Harry out the door, if, if, if) would force multi-media rivals like Time Warner, News Corp. and Viacom to follow suit. When they do, they'll spend a lot more money than the $100-200 million (the price of a couple of bad movies) I figure the Mouse will shell out this year. Even "failure" will have its redeeming features, in giving the impression Disney is becoming an "Internet" company.
In Volume I, Issue XI of this letter we called Harry Motro "Clued-in" when he left CNN.Com for Infoseek. We hereby reiterate that "buy" recommendation.
SSP (Shameless Self-Promotion)
I apologize to everyone who got multiple copies of last week's newsletter. You'll learn what I think of that at the bottom of this week's letter.
Meanwhile, I've become a columnist, full-time. In addition to EcommerceTimes , a news site specializing in electronic commerce, which signed yours truly for a daily "viewpoint" feature, I'll now be doing a monthly gig for NetMarketing, a long-time client and affiliate of Advertising Age. If you are a heavy user of Internet stock trading sites, I'd also like to profile you for an assignment I have with Salon Magazine . You can still buy "Web Commerce: Building a Digital Business," , by Kate Maddox with yours truly, and I have two other proposals available for consideration...
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And now back to our show...
The year 1999 will see a shakeout in the booming area of PC auctions.
Companies like eBay , uBid , and OnSales have been drawing billions from gullible investors over the last few months because auctions are fun, and profitable to an auctioneer who's not putting money into merchandise, just buying virtual "real estate" needed for the sales. Recently, I've gotten notes from Fairmarket , bragging that they're hosting auctions for PC Zone and Delphi's forums, and from at least one software company offering auction software. (One PR person I know said she did an online search under the keyword "auctions" and found 5,000 of them.)
The fact is that auctions are fairly simple to set up. The problems lie in bringing in buyers and sellers (creating "action") and in scaling your customer service to deliver on what's promised. Here, Fairmarket's approach solves many problems. But it's also true that anyone with a competent direct mail back-end can, with some software and marketing, handle an auction. (And we really haven't heard from Sotheby's or Christie's yet, have we? Nor those lovely people who do the 'Antiques Roadshow' on PBS.) Marketing and cheap software are not in short supply.
Here's a basic Clue for you. As a market expands, and market share points become more valuable, these markets become more crowded and those points become more expensive. Assuming you'll keep those you have - without considerable investment - is always a bad bet. Investors will figure this out one day, and then watch out. (For continuing coverage of the auction marketplace, click here .)
The Serendipity Clue
Robert and Patricia Eichorn of Manchester, Vermont had been running a small site for their small inn for two years until a brief conversation made them into an overnight Internet success.
Of course, the conversation was with the state's Governor, Thomas Dean. Dean put the results of the conversation into a speech, the speech sent an Associated Press reporter to the Eichorn's door, and last week the Governor brought them to his inaugural address, once again to laud them.
Mr. Eichorn spends a few hours each week working on his site, which is hosted by CK Interactive. He wrote his first pages in raw HTML code, using Word Perfect, then graduated to that company's Webmaster page authoring tool. He now uses Macromedia's Dreamweaver for more extensive effects, like a "virtual tour" of his 13 rooms. He's proudest of a "hot-button" tool he found at an innkeeper's convention, which lets him return calls within 30 seconds of someone clicking a button on the site. "90% are calling to make a reservation," he says, at prices averaging $115 per night.
Yeah, but what can you learn from Mr. Eichorn? You don't need a lot of money, or a lot of technology, to make a Web success, just passion, interest, and a focus on your needs. The Clue I got is, be open and friendly with anyone who asks about what you're doing. One word in the right ear, and you too can be a hero...
Hard Numbers on Christmas
Now that the hype has died away, the reality of this Christmas was it wasn't quite as good as everyone said, but the demographics of the new buyers make for interesting reading.
IntelliQuest's Zona Research unit surveyed over 1,000 Internet users, and found while average spending rose, over half didn't buy anything. Most important, however, was that the growth was concentrated among older consumers - those over 50 spent more than 5 times as much online in 1998 as they did in 1997. Among those surveyed, an average of 26% of the holiday budget went to online shops, but remember the panel consisted only of pre-recruited Internet users who completed some extensive surveys.
Your Clue is this. Your fast-growing target markets look more like James Garner than Cuba Gooding Jr.
Clued-in is Deja News for their "custom community" offering, which can give any Web site an active, moderated discussion section consistent with its corporate identity. Here's an example of one such community , straight from the Dejanews release.
Clueless is Yours Truly for trying to fix a perceived problem with deliveries in last week's issue from 3,000 miles away. With the wrong click of a mouse button, I wound up sending the issue many, many times to the whole list. Thanks go to those 50 or so subscribers who wrote back to chastise me, and special thanks to those who wrote back, after I apologized, saying they would not unsubscribe as a result.