A-Clue.Com
by Dana Blankenhorn
Volume III, No. XIV
For the Week of April 5, 1999

This Week's Clue: Twilight of the Business Press Gods

This Week's Clue: Twilight of the Business Press Gods 

SSP (Shameless Self-Promotion)

The AOL-ification of Netscape 

Search Engine Thoughts

The Kosovo War

Clued-in, Clueless

The problems at CMP Media Inc., my corporate alma mater, had a lot of us buzzing a few weeks ago, and not just because we're sad over the Leeds family's plight. As one of the bulwarks of the computer industry press, CMP is a major piece of the freelance market and its problems - combined with Ziff's lay-offs last year - mean unemployment and underemployment for many of us.

But whatever opportunities CMP missed (and they missed many) the fact is they're not alone. The entire business press is in deep, deep trouble. The basic model - identify buyers, give them a free magazine, then sell sellers access to those buyers in the form of advertising - no longer works. It's time we looked at those readers, and at what's replacing these "business to business (b2b) books" in the marketplace, with fresh eyes. 

First, understand that while anyone in b2b is motivated to save money by any means possible, b2b buying and selling is complicated, and first  requires a personal relationship. Once that is established discounts are negotiated, order books are open, the specific products you buy from each supplier are defined by the negotiation, and approvals on purchases are often required.

Software can deal with this complexity, but the bigger you are the bigger those savings are. So software companies are first serving the "cream" of the b2b market, big companies that can pay $1 million or more for solutions from IBM  or Ariba . Smaller companies can then be offered access to the service of this software, but the price is a tie of dependence to large customers or suppliers. And if a small company takes several of these offerings, they'll find themselves with a more complex environment than before - more complex than that of the large companies they're competing with.

There are several solutions being offered, beyond just building Web sites. Thomas Register  and its joint venture with GE Information Services  are offering billboards that link to e-mail or Web sites. Cahner's Manufacturing.Net, Penton's PDEM, and Industry.Net  from IHS replicate many services of the traditional trade press. Big distributors like Marshall  and Grainger  offer small merchants access to customers and other resources (especially education resources), and Ross Perot is bringing these services together in a super-site.

But the most (financially) successful b2b marketplace so far is VerticalNet of Philadelphia, which went public in February and is now worth $1.75 billion -- more than twice the value placed on CMP by the stock market. VerticalNet started as Water Online, and now employs 29 journalists. Each editor has a specific beat, like beverages or aerospace. Their job is to collect and deliver news, to organize discussion, in short to build community with credibility. The senior editor of VerticalNet's "computeronline" community, Bruce Bennett, has degrees in engineering and management, and also ran EDN Products for Cahners Publishing from 1993 until 1997.

What separates VerticalNet from what the trade books are doing? The effort is centered on what the Internet can deliver - e-mail, links, conferences, transactions and community. There's no fluff in the org chart - everyone working in editorial departments is producing journalism. All this works well for advertisers like Imprint Technology LLC,  of St. Paul, Minn., for which VerticalNet is willing to do innovative deals. Imprint's CEO, Brett Hanson, told me he got a year's worth of banners in nine VerticalNet editorial sections for an up-front payment of just $40,000 plus a royalty of 20% on all sales the banners generate. (The up-front is an advance against that royalty.) You can't do that kind of deal in print.

The point is that, by looking at what this medium can do for businesspeople with fresh eyes, and without reference to an existing business, journalists can organize and advocate their marketplaces in ways their readers and advertisers will applaud. If it takes a lateral move for a journalist to secure their career's future, it's really no big deal. What's happening to CMP (and companies like it) is sad, but it, too, is no big deal. The Clueless can be replaced. 


SSP (Shameless Self-Promotion)

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Now back to the show...



The AOL-ification of Netscape

Microsoft sees the Web as a way to extend its dominance over computer software into the next Millenium. America Online sees the Web as a medium through which it advertises and sells products. So as soon as it acquired Netscape AOL got busy, making it do what it does best.

The results are some subtle changes in Version 4.51 of Communicator, which I downloaded recently. Netscape Mail now has a "default" e-mail message from NetCenter, filled with ads and links, that remains on the screen until you click on a new note. The software has regular demands that you download "Instant Messenger" on starting Netscape, and the "home" page default's definition has been changed. It's now the page you reach when you click the "home" icon - this lets it occasionally default to another Netcenter page.

AOL's singular achievement since closing its Netscape acquisition has been to make Microsoft look good.

Search Engine Thoughts

It's the ability of a search engine to find what you want, not its ability to build itself into a "portal" with related services, that should determine the success of such companies.

I use a lot of search engines regularly, and based on the results I'm getting, and the stand I've just taken, Yahoo is in deep trouble. Yahoo's human-designed index isn't working as well as it did, and its search engine isn't doing any better. Excite hasn't even thought of making improvements - I've frankly quit trying them.

Who's getting better? Infoseek  was able to find a solid story on our "Clueless" recipient in its first 10 hits. I've gotten great results from Hotbot  since it began using DirectHit  that ranks pages based on how many people click to them. (It's not just because they find our home page first when you enter a-clue.com.) My kids have also gotten good results at AJKids, a "family-friendly" version of Ask Jeeves, the main search system for Altavista. And, as I've said before, advertisers have been reporting good results from GoTo.Com, which sells keywords outright.

There's a great Clue here, especially if business trends follow these technology trends. Don't get distracted. Remember who brought you to the dance.

The Kosovo War

When the bombs start dropping then the talk starts stopping.

The Internet is powerless in the face of war's brutality. While some news organizations, notably the BBC , feature links to sites in Serbia, Kosovo and Albania, there's not much there save propaganda. A CNN Talkback chat on the subject turned into a disgusting flame war - mostly among Americans. Major news sites offer no more perspective than what you'll find on their TV broadcasts. The start of the war radicalized everyone - it continues to do so - and like all wars this one will end in either exhaustion or victory for one side. At times like this the Web, and even broadcast journalism, seems irrelevant. The Kosovo story most relevant to the Web is this one.

Clued-in, Clueless

Clued-in is Bright Light, which is finding ways to make money fighting spam through its Probe Network , which acts as a "bug light" for spam, zaps it, then updates the company's "Spam Wall" server filter. This is a great example of how clever people turn problems into opportunity.

Clueless is UK Justice Morland , who bought the idiot legal theory of British physicist Laurence Godfrey that his "notice" (read claim) of libel required ISPs to take down messages. Godfrey has filed similar suits in the U.S., Canada and Australia. Taking down messages after libel is proven is OK, but taking them down on a mere claim makes unmoderated Internet conversation illegal. (The result of the precedent would inevitably be prior restraint.)


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