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For anyone that doesn't, go to
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Here's the current issue:
===================================================================
Seidman's Online Insider - Vol. 5, Issue 12
Visit the Online Insider on the Web for additional content and access
to the Insider Talk discussion forums.
< onlineinsider.com >
===================================================================
Copyright (C) 1998 Robert Seidman. All rights reserved. May be
reproduced in any medium for noncommercial purposes as long as
attribution is given.
IN THIS ISSUE
- What's Happening in Insider Talk
- Do Your Taxes Online
- More Fun With Numbers
- Rates-O-Rama
- AOL: Back in Business
- Quote of the Week
- Stock Watch
- Subscription Info
What's Happening in Insider Talk
================================
"A less noble, but nonetheless viable, strategy is to feed off the
inherent inertia of any customer by making it harder and harder to
switch to a competitor's service or product." -- Ron Luks, executive VP
of Fun Online, on the topic of retention strategies in the Online
conference at:
< wellengaged.com >
--
"What's really interesting about this, in my opinion, is that here you
have a book publisher/manufacturer selling directly to book buyers. That
means an extra $4-5-6 (maybe more) per book to the Bertelsmann bottom
line on their own books that they sell. Sure, this may ruffle some
feathers in the traditional bookselling retail world, but it's the
logical conclusion to Web commerce -- and a gutsy and brilliant move,
IMO." -- Andrew Weissman, president of Virtuosity Press LLC, on the
topic of online shopping at:
< wellengaged.com >
--
Do Your Taxes Online
====================
For $9.95, roughly 40% of U.S. tax filers can use the new TurboTax Online
service from Intuit Inc. to prepare and electronically file their U.S.
Federal tax returns. There's also a state option for California residents
for $4.95.
The TurboTax Online service is aimed at simpler tax returns that use the
1040EZ, 1040 and 1040A forms. It is possible to use TurboTax Online and
itemize deductions via a Schedule A form, but there are limits. TurboTax
Online doesn't cover business-related taxes, retirement income, taxes
related to the sale of a home in the current year, non-cash charitable
contributions greater than $500, employee business expenses, or alimony
payments and income. While I personally won't be able to use TurboTax
Online this year (I'm claiming HUGE losses -- just kidding -- besides,
it's nice to finally have something in common with Steve Case and Bill
Gates and even Intuit CEO Scott Cook, who won't be able to use TurboTax
Online either), for a lot of people, it may make sense.
First, it's pretty darn easy.
" Turbo Tax online is TurboTax (Intuit's shrink-wrapped retail tax
software product) on the Web," says Barry Saik, Sr. Product Manager Turbo
Tax online. "The object is to get people up and running easily while
retaining the ease-of-use of the TurboTax product."
Like its offline sibling, TurboTax Online takes you through an interview
process and automatically fills in the information in the correct forms.
It really is pretty easy. To be fair, the 1040EZ is not a hard tax
return to fill out at all if you can add and subtract or use a calculator.
But if you have a refund coming the electronic filing will speed up the
process and that might be worth $9.95 to you. It's still cheaper than
walking into H&R block and having them charge you more for doing a 1040EZ!
For the more complicated returns that TurboTax Online is capable of
handling, the interview process does make filing easier and less
confusing.
Second, it does all the math for you. Generally speaking if they
calculate wrong and cause an error, they'll pay you for any penalties and
interest.
Finally, it's an inexpensive alternative to the more costly offline
counterparts and tax preparation services. Plus, they offer a money back
guarantee if you're not completely satisfied.
Intuit is looking to become a more Internet-based company and TurboTax
Online is just one of the growing number of offerings from Intuit. The
company is focusing on creating new markets online, and with TurboTax
Online, they may be succeeding. According to Saik, 60% of the users of
TurboTax online have never used tax preparation software before.
While Saik wouldn't give any numbers, so far usage has doubled from last
year when only a 1040EZ option was offered. While marketing was limited to
the online world, Saik says they plan a more aggressive marketing campaign
next year. Saik said that deals with portal sites AOL, Excite and Yahoo!
have been successful and that most of the traffic has come from AOL and
Excite
who Intuit partners with to provide online content.
Saik said that in his view it is worth noting that the strength of the
TurboTax brand is such they could actually do a deal with Yahoo!, Excite
and AOL. I'd agree that typically you won't see a situation where you
could do both a deal with Yahoo! and Excite.
For all the info see:
< intuit.com >
More Fun With Numbers
=====================
First up, new results from IDC's semiannual 1997 World Wide Web Survey
of Home and Business Users, released March 30, point to dramatic growth
in home usage of Internet and online services in the United States.
IDC's study showed that 13 percent of U.S. homes were online at the end
of 1996. IDC predicts there will be 23 percent online by the end of
1998.
And at the end of 1997, according to the survey, 20 percent were online.
You can do the math and come to the same conclusions I did. Most of the
growth came in 1997. Growth will be much slower in 1998, if the survey
is correct.
But the need for dramatic growth in new users may not be as important as
it used to be, for one reason: The survey also reveals that people are
using the services more often. Nearly 60 percent of households were
accessing at least once a day at the end of last year, up from 35
percent at the end of 1996.
--
Some data points from a recent survey conducted by Cyberdialogue/findsvp
in association with C+C Data, Inc.:
- 37% or 2.6 million of all U.S. small businesses conduct business
online
- Another 1 million small businesses are likely to come online in 1998.
If so, by the end of the year, over half of all U.S. small business will
be online.
- 80% of small businesses that go online seek information on business
products and services online
- 65% use email daily
- 53% use the Web daily
- 38% purchase business products and services online
--
*Ratings-Reports Guide: Part I*
Now, in addition to Media Metrix (formerly PC Meter) and Relevant
Knowledge, there's a third company, NetRatings, in the mix to count how
many people are using what. Typically, I'd say that two companies are
at least one too many (and perhaps even that one company is one too
many), but since it's difficult to get good numbers, it helps to have
more people providing them. Though it tends to make things all the more
confusing.
These services bill themselves as "ratings" companies, but when it comes
to the material they make publicly available for free, I would caution
strongly against using the top-25 numbers they provide as ratings
because those numbers measure reach over a one-month period. Reach is
an important number, but reach-times-frequency is the more important
number -- and we're usually not getting the latter in the free stuff.
In the coming weeks, I'll look at each of these companies and try to
explain a little bit about how it counts and what it all means. This
week, I'll attempt to tackle Media Metrix. In future weeks I'll take on
Relevant Knowledge and NetRatings, and finally I'll compare and contrast
their respective approaches.
*How Media Metrix Counts*
Media Metrix has a sample population of around 30,000 home computer
users. The population fluctuates based on trends. The computers in
these homes are equipped with a meter that measures everything the users
do -- not just online and Internet use. Media Metrix could measure, for
example, how often a word processor or even a specific file is accessed
on a user's local machine. Not everyone in the Media Metrix sample has
a modem, so not everyone can go online. It's telling to me that of the
30,000-plus users in the sample, only 9,421 accessed the Web at least
once in February. This means, at least in the Media Metrix sample, that
an overwhelming majority of people don't use the Web on a monthly
basis. According to Stacie Leone at Media Metrix, the number of people in the
sample population (of around 30,000 - not all of whom even have modems)
using the Web in a given month has fluctuated roughly between 9 thousand
and 11 thousand. This means that, again, overwhelmingly, most computer
users "almost never" (my term, not Media Metrix's) access the Web.
Unfortunately, I was unable to get the total number of the Media Metrix
sample population who have PCs with a modem in time for this writing.
The percentage who are modem equipped but do not access the Web at least
monthly would be an interesting stat. I hope to provide the number
soon.
Media Metrix estimates the number of PC households in the United States
at about 38 million as of the fourth quarter of 1997. In that time
frame, Media Metrix data concludes, 19.2 million households were
accessing the Internet and 18.8 million weren't. According to this
data, almost half of PC homes aren't on the Internet. More telling is
that of those who are, only around 50 percent seem to access the Web in
any given month. If I were in business, I'd probably want to see a more
extensive study on those who aren't online and those who don't access
the Web at least monthly, to find out WHY! Because in any given month,
only about a quarter of those with PCs are accessing the Web and only
about half of those with Internet access are accessing the Web. A lot
of missed opportunity there. I'd want to know why.
Finally, it's worth noting that Media Metrix tracks all users age 2
(yes, 2!) and up.
*The Numbers It Releases*
Each month Media Metrix releases its "Top 25" in home and at-work
categories. I'd almost dismiss at-work immediately because there were
only 622 active Web users in that category in February. The publicly
available numbers from the "Top 25" press release focus only on overall
reach (numbers of people who visited a given site, not how often or how
much they used the site). While these numbers do tend to give an idea
of which sites have more unique visitors than others, they don't help
much in determining relative site size in terms of usage.
Because the number of active monthly users fluctuates, so too does the
value of each reach percentage point. In a heavy month such as
December, where more than 11,000 of the sample were Web-active, a reach
point may equate to 400,000 users. In a slower month, such as February,
a reach point may equate to only 380,000.
Though I don't fault Media Metrix for not giving the store away, it
bothers me because of the way the press and executives pick up on things
such as "AOL's Web site is No. 1" or "Netscape's is No. 3" without
understanding what it means. People love lists, and the press gives
them that information. It's not Media Metrix's role to make sense of
all these numbers for free, but it's a journalist's role to understand
what the numbers mean and not to simply regurgitate a press release.
Sad to say, there's much too much regurgitation journalism, and it seems
rampant on the Internet.
In February, the top five sites visited by homes were:
Site Reach %*
1. AOL.com 47.7
2. Yahoo! 41.5
3. Netscape 26.0
4. Microsoft.com 23.6
5. Excite 20.7
*In February, each reach point projects out to about 380,000 users.
There are a couple of things we can determine from this, even if you
have trouble trusting the methodology. The first thing we determine is
that Yahoo! and Excite are doing pretty amazingly, even though Yahoo!
has twice the reach of Excite. The reasons for this conclusion is
simple: AOL, Netscape and Microsoft generate a lot of traffic because
of their default browser pages. If you browse from within AOL, the
default home page is AOL. Just bringing up the browser will bring up
AOL.com. The same is true in large part for Netscape and Microsoft
browser users. For Yahoo! and Excite, though, it's always a choice to
go there. You've either chosen to visit the site directly or chosen to
make the site your home page. Somewhere the choice was made. That's
not necessarily or typically the case with Netscape, AOL and Microsoft.
The other thing we can determine is that while Netscape, AOL and
Microsoft may have a difficult time creating default sites people will
really want to use, the opportunity to get exposure for these sites
still exists. It may not be too late for Netscape, with its newfound
plans to turn its home page into a destination site, because it still
gets so much traffic that it'll have an opportunity to promote the new
site. The same goes for Microsoft, with its forthcoming "Start" page.
AOL.com seems to be lagging, but I'd expect it to ramp up its efforts
soon (including, yes, some kind of free e-mail service, chat and all the
other things that are now available free via the likes of Yahoo! and
Excite, and that are coming soon from Netscape and Microsoft.
Media Metrix charges a whopping $50,000 to $60,000 for its basic
service. Customized reports are more. I'm not sure I'd buy the data to
see how "my site" was doing, because I should have the data on my
site! But if you're interested in knowing, for example, how you're
doing in a particular sector, and what your "share" of that sector is,
Media Metrix may be worth considering.
For a full list of February's top 25 sites, see:
< mediametrix.com >.
More info on Media Metrix can be found at
< mediametrix.com >.
There's a semi-related story in this week's Side Track at:
< onlineinsider.com >
Rates-O-Rama
============
Last week, AT&T followed IBM and Microsoft's WebTV followed AOL. AT&T
announced April 1 that since a very small percentage of its subscribers
were generating a ton of hourly usage, it would change the structure of
its pricing plan as of May. Starting then, for $19.95 a month, AT&T
WorldNet subscribers will get 150 hours of access per month (roughly
five hours per day) instead of unlimited access. Hours above 150 will
be billed at 99 cents an hour. AT&T vowed that the $19.95 pricing would
hold at least through the rest of the year. AT&T forecasts that roughly
3 percent of its subscribers will be affected by the change. Earlier
this year, IBM made a similar move with its Internet service. I think
we'll see more of this, and it isn't very surprising at all.
Far more surprising was Microsoft's WebTV announcing it will raise the
rate for its WebTV Plus service by $5 a month (users of the older,
"classic" WebTV will still pay only $19.95 a month). Beginning in June,
WebTV Plus subscribers will pay $24.95 a month.
This may not actually be a bad deal for heavier Web users if WebTV Plus
users in fact get to begin taking advantage of one of WebTV's cool
features beginning in June. The WebTV Plus box has a built-in hard
drive, as well as built-in technology to receive Web pages via the
broadcast stream for storage on the hard drive (this will be done
late at night, presumably while you are asleep).
But in a fledgling industry, one can't help questioning the timing of
this move. While WebTV Plus has been deemed a "success," its base of
users is still relatively small. WebTV claims more than 300,000
subscribers in all, but most of them, according to sources, are users of
the classic WebTV service. According to WebTV, though, the integration
of TV and the Web via WebTV Plus (niceties such as program guides and,
coming this summer, basically the software equivalent of VCR+ -- a
service that lets you easily record programs on your VCR) is causing
WebTV Plus subscribers to use the network more than other services, and
its users are online a whopping 41 hours per month (it doesn't have many
subscribers, but it seems to be a good model).
Bottom line: The wrong time to raise the rates, given the fledgling
status of that sector.
AOL: Back in Business
=====================
America Online announced March 30 that it was relaunching its AOL
Enterprise service, a service aimed at businesses. I'll cut to the
chase here: I heard all the analysts saying that when people think of
business, they don't think of AOL. When people think of AOL they think
of consumers and busy signals and not a reliable service. It might not
matter if grandpa has to wait two hours to access an e-mail, but it
might matter if you're doing business and that happens. I heard all
this and was nodding my head in agreement.
But then sweet serendipity struck and I was enlightened to why AOL's
plans just might work. I got a voice mail from my brother Steve. The
essence of the message was: "I'm trying to set up my home computer so I
can access the corporate network remotely." Well, my brother isn't
alone in that quest. AOL can, in theory, make the process a lot easier.
AOL's plans call for it to let companies do just that -- access their
corporate networks via AOL. On the surface you think: "What a
ridiculous way to go about that!" But then there's my brother Steve,
the consummate end user and every help desk's nightmare. AOL can make
that problem go away. No more juggling with Windows Dial-Up
Networking. No more hassles with a Remote Access Server. No worrying
about SLIP or PPP. The acronyms alone are enough to frighten end
users. And while the help-desk folks manning the lines at these
companies may get a laugh out of hearing "I can't make it PPP, what's
wrong?" I'm sure they'd rather not spend their time on such things. AOL
can make that happen.
Don't get me wrong: I think AOL has a lot of reputation obstacles to
overcome before anyone is going to take it very seriously, but AOL
should work hard at overcoming those obstacles because there just might
be some "there" there.
Quote of the Week
=================
"I don't want the refrigerator door in my kitchen to be a model for my
ISP. I don't want a buddy list. I don't want to think any more than I
already do about the language of cyberspace.
"I want more time to hang out in my kitchen, cooking for all the buddies
I'd put on my list, if I made one." -- New York Times Cybertimes writer
Lisa Napoli, reacting to a piece of postal junk mail received from
Esther Dyson's Release 1.0 at:
nytimes.com |
