I had a conversation last night with someone in the internet publication industry about Zulu, DCLK, and the industry in general. He had heard a lot about DCLK, of course, but not Zulu. However, he had heard about Softbank, and when I told him that Zulu had acquired a large part of it, he was impressed. Particularly because of the relationship between Softbank and Ziff. He works with some of the elephants in this business, and Softbank and Ziff were/are big time players. I showed him some of the Zulu press releases, and if true, he is very impressed. On the negative side, however, he is not sure if the internet ad business will succeed, whether DCLK, Zulu, or anyone else. He says no one is making money on it, and advertisers are growing jaded. The problem is that an advertiser counts success by number of clicks on the ad, and they are not getting many. In this sense the interactive nature of the internet is its own enemy. It is hard to know if a print ad is being read, since there is no instant feedback as from a click. However, since the advertiser does not know this, he can assume that the ad has been read. Furthermore, there are surveys that can be done on brand recognition, etc. With the intenet, the only thing they know so far is that not many people are clicking on the ads, and I suppose not many surveys have been done to test the effectiveness of these ads. So the good news is that Zulu seems to be in a good position. The bad news is that all of these companies may be on a sinking ship for all we know. If so, DCLK is in a lot more trouble than Zulu because of their stock price. I suggested that we will be ok for the next year or so until all of this shakes itself out. He countered that 6 months is more like it in the internet business. We will know in six months how this plays out.
Just passing this on for what it's worth... |
