WSJ Feb.11, 1999: (CMGI's cross pollination strategy is reflected here)
...Internet executives are gambling that, ever so gently, they can create their own, smaller online worlds that will be so appealing that users won't want to stray. The master of this strategy is America Online Inc., which rings up an average 246 minutes a month among users of either its proprietary network or its Web site, according to MediaMetrix Inc., New York. AOL for years has been criticized by the online elite as an "Internet service on training wheels," yet it continues to attract new users at a record pace.
At Yahoo, executives are buying billboard ads to promote the notion that users should "stay a while" on the site. The concern last year acquired a host of small companies to expand its own offerings in messaging, targeted e-mail and other areas. Last month, Yahoo announced its biggest acquisition ever, agreeing to buy GeoCities Inc., which provides free Web pages, for about $3 billion. All those transactions, says Yahoo President Jeff Mallett, are aimed at linking customers more closely to the site.
"From day one we always worried: What would happen when people knew where they wanted to go?" Mr. Mallett says. "What use would we be?" By keeping users rattling around in Yahoo-owned sites, he figures, Yahoo will generate more usage, "which pings our business model," particularly in strengthening Yahoo's ability to sell ads. That process already is under way; average user time on Yahoo climbed to nearly 60 minutes in December from 41 minutes in September, the company says.
Similarly, executives involved in the $6 billion purchase of Excite Inc. by At Home are betting that the combined company can hold users' attention more tightly than ever.
"Think about someone who enters their stock portfolio once, on Excite," says George Bell, chief executive officer of Excite. "Now they will be able to trade faster on At Home," which offers high-speed connections to the Internet. "They can keep track of their holdings by pager or cell phone." That's because At Home has a close alliance with AT&T Corp., which is interested in ways that telecommunications and the Internet can come together.
In sum, Mr. Bell says, "we want to deliver the content that matters to you, in whatever form or bandwidth you want it." Eventually, he speculates, Excite may be able to beef up its offerings by joint projects with various cable companies that own stakes in At Home. But he says that's a longer-term goal.
If Internet executives need any reinforcement for the view that stickiness matters, they will find it among advertisers. For the past few years, various Internet sites have competed for ad agencies' attention mostly on the basis of how many visitors their sites had. But now, says Mary Ann Packo, president of MediaMetrix, "there has been a drastic increase in the number of people wanting data about how much time people are spending at a site." |
