Why are so many stars joining Web sites? The short answer is money.
Because Web sites remain very overvalued on Wall Street, lots of people who are Clueless about the real world of e-commerce are trying to get into the act. Dealmakers from decades past are getting into the Internet IPO game. Huge corporations are spinning their wheels on spinning-out Internet operations as "separate companies." As long as values remain stratospheric, this will continue to distort the market, and the Web. Let me count the ways:
Selling Links - The business of selling "exclusive" relationships between Web sites, begun by America Online in the mid-90s, has become a mania. In the process it has greatly reduced the presence of hyper-linking throughout cyberspace. Hyper-linking, you should remember, is the underlying technology of the Web, but with so many people imputing ridiculous values to links, they're going the way of the passenger pigeon.
Mailing List Lies - Many of the shared lists I belong to have become much less useful lately. It used to be that entrepreneurs were anxious to share their insights, in hopes of gaining allies and validation. That's no longer the case. The hotter the market, the less worthwhile its shared lists. What this means is the markets, as markets, are developing much more slowly than they should, because everyone is looking at ideas as valuable, and forgetting it's implementation (based on thoughtful study) that rules.
Monkey See, Monkey Do - Innovation is hard, and with the market valuing everything so highly, it's much easier to just do what others do, rather than do something useful. We've seen it (to death) among "portal" sites, with AltaVista and Go Network trying to clone the business plans of Yahoo and Excite. We're starting to see it among b2b sites, which besides dubbing themselves "portals" are also busier cloning Yahoo than investigating the b2b markets they claim to serve.
Moon Power - This is my term for reflected star power. People who have just worked at Amazon, Yahoo and other successful start-ups are fobbed off in press releases as being stars in their own right. Low-level flunkies at top VC firms are treated like royalty, as are assistant analysts at top Wall Street firms. Company lines are read from podiums and treated as holy writ, because of the companies they come from.
Rise of the Back Room - Corporate principals are no longer found at venues like Internet World. They're only seen at smaller, more-expensive soirees , where they play golf, do a little schmoozing, and aren't really called upon to think (while the events' sponsors rake off cardshow-like profits from the gullible). The growing distance between those who've achieved Internet success and those still trying to achieve it is becoming troubling.
The Money Chase ends when Internet stocks are once again valued based on real results. Not just real earnings (although those are nice), but growth in cash flow, sales, and other indicators of market value. New Internet stocks will be piled on top of old ones until this happens, at which point much of the pyramid will come crashing down and people will think the world is coming to an end. That day of reckoning is coming, and the best way for you to avoid being hit by the fall-out is to honestly measure your efforts, and those of your company, with honest numbers that bloom perennially, not just during tulip season.
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I'm taking the latter half of this month off, but you won't be bereft. As we did last year, we'll have Clue features on topics too complex (or non-newsworthy) for most weekly issues. Hope you like them.
You can now get your Daily Clue at ClickZ, putting a "clued-in" spin on the day's news. I'm also a semi-regular on TechEdge Radio and I'm continuing monthly columns for NetMarketing, Boardwatch, and Intellectual Capital. I'll also begin work soon with the IC folk on a book project concerning politics and the Internet, which will appear first on the Web. A-Clue.Com is also the Monday e-commerce column of Andover.News. Buy my book now. Subscription instructions are at the bottom of each issue.
Remember that it's still journalism -- checking the news, calling people, listening carefully and writing on deadline -- which keeps the Clues coming. If you're looking for excellent work, give me a call at 404-373-7634. Now back to the show...
Between the death of Walt Disney and the rise of Michael Eisner, the Walt Disney Co. floundered. It lacked vision and an entrepreneur at its head who knew the industry and could set a coherent direction.
For the last two years, Harry Motro's been that man at Infoseek. With its merger into Disney as Go.Com, Harry now says he's leaving. That's why this deal stinks. Michael Eisner knows he's Clueless about the Internet, but in the wake of the Jeffrey Katzenberg suit he's reluctant to create any alternative power base to himself. But the growth of Go.Com requires just that kind of power base - no executive worth hiring will do the job right without autonomy and autonomy's upside. Eisner's fears now threaten Disney's future. Either find a way to turn Harry around or don't let the door hit you on the way out, Mike.
Why I'm Glad It's A-Clue.Com
When I first went shopping for a domain where this letter could reside, I felt bad that www.clue.com was taken. I no longer feel that way.
It turned out Clue.Com was owned by a small Colorado Web consultant called Clue Computing Inc. There is also, of course, a board game called Clue, owned by Hasbro. Hasbro decided that Clue Computing was infringing on its rights, and sued to get the name . Never mind that Hasbro owns Clue.Net . Hasbro was able to get Network Solutions to sue Clue Computing for the domain name, and while Clue won, I'm sure the fight was expensive.
And the fight continues in Congress. If the proposed "anti-cybersquatter" bill is passed , small companies like Clue Computing could still fall victim to this kind of cyber-bullying. The Clue I get from this is to avoid hassle whenever possible, even if it means taking a non-optimal URL.
The Meat Space Buy-In
Soma.Com has become CVS.Com , Brainplay is now KBToys.com , and CDNow is now a Sony-Time Warner operation . The Clueless are calling this the beginning of the end for diversity, the "meat space" takeover of the Web, even the end of entrepreneurship as we know it. But let's take a closer look, shall we.
First, if the Web is really a going proposition, then all companies have to be in on it, right? This includes leading companies which, until now, have stayed out. So seeing such firms joining the rush to the Web is a good thing, not a bad thing.
Second, "meat space" companies are buying only compatible businesses, and laggards at that. In most industries, the equivalent of a Barnes & Noble would see the success of a new channel leader, like Amazon, and snap it up. Or a TV network would take Yahoo. It hasn't happened because they can't afford it. Because of high stock values and the urgency of action, "meat space" leaders are having to pay up to get poor positions in the markets they supposedly dominate.
Third, there are always new niches. When new Internet millionaires cash-out of these situations, do they go play golf, do they become consultants or college professors, do they (yikes) go into politics, or take a corner office and spin yarns of the good old days? No, no, no and no - they start new companies. They use the Clues experience has given them to get back in the game, to advance the state of the art, and to start their next fortunes. When that changes, maybe you can argue the game is over. But even then I won't hear it. Most likely we're just ready to retire and leave the field to the next generation of Internet entrepreneurs.
Anyone who claims the game is over ain't playing.
Clued-in are corporate travel departments demanding access to Internet bargains . When corporate buyers access Web bargains, those are not counted as part of negotiated discounts with the airlines. The customers have a right to be steamed.
Clueless is the United Nations, which urged in a recent report that Internet use be taxed to support developing countries. "A small tax of one cent on every 100 lengthy emails would generate more than $70 billion a year," says the report. And we wonder why U.S. conservatives want our government out of this organization?
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