VALU-NET LAUNCHES CANADA'S LARGEST ISP GATEWAY - REPORT
Good afternoon to you all. Please find enclosed our report with respect to launch of the Valu-net ESP Program on June 9. For your convenience, we have broken the report down into sub-headings:
GENERAL INFO
The Valu-net Enhanced Service Program (ESP) is basically a system intended to bring on-line consumers and business together in a more effective manner than methods currently employed. Under the current system, banner ad's and search engines, on-line consumes have all experienced the frustration of being unable to find the exact goods or services they seek. Though banner ads and search engines provide some utility, the Internet still lacks well-defined channels of business communication between the three key players on the Web, which are as follows:
- Enterprises selling goods and services
- Internet Service Providers (ISPs)
- Consumers
The result has been a very low percentage of consumers actually purchasing products over the Internet. As well, the lack of clearly defined channels of business communication has served to perpetuate security concerns held by most on-line users, who do not feel comfortable making random purchases through the unregulated web. Thus, the majority of shopping revenues come from "portal partnerships", where brand names have combined their resources to give consumers a greater sense of security. A portal, or gateway, is a website that leads the visitor to other websites, while a portal partnership directs traffic to a specific website.
In response to these facts, executives in a Valu-net survey expressed the desire to strike third party relationships to help attract customer traffic. The executives also believe that portal partnerships will become key traffic generators but they are under developed in Canada. The same holds true for aggregator partnerships, arrangements in which merchants pay for access to an aggregated customer database.
In response to the needs of business and executives, Valu-net has developed and now launched the ESP program, details of which will be discussed further below.
LAUNCH DAY AND PARTNERS
With respect to the launch itself, we were very impressed to see a full room of attendees in one of the convention rooms at the Sheraton Centre. Not including persons employed or related to VNE, there were over 130 persons in attendance and many of them represented some of the bigger names in Corporate Canada. Even more impressive, were the names of those companies actually participating in the launch of the ESP Program as official partners. Those names included the following:
- Allstate Insurance
- Liberty Health
- Business Depot
- Canadian Tire
- Microsoft Canada
Each one of these partners will participate at some level within the ESP and serves as a strong testimonial to the prospects of the program.
The other side of the equation, Internet Service Providers, is equally as important and Valu-net has been equally successful in signing them on to the program as well. As a result of partnering with the ISP's, ESP will now have an audience of over 500,000 potential customers as of commencement of the program. How significant is this number? Suffice to say that in its very first day of operation, ESP has become the number one ISP gateway service in Canada.
The list of participating ISP's is equally as impressive but can not be listed at this time. We expect this list to be available very shortly.
HOW ESP SOLVES THE PROBLEMS
GENERAL CONSUMER MARKTING
The power of ESP lies in two separate marketing avenues. The first avenue is one in which we are all accustomed to - a portal in which general Internet traffic is directed to client's websites. This is considered to be general traffic which has not been screened or qualified in any way. The portal or gateway that will be used to direct this traffic can be found at:
www.webthisweek.com
When visitors enter Webthisweek ("WTW"), they will be able to browse a select group of websites that have first been reviewed by Valu-net using and have satisfied the following criteria:
- Security through transaction methods that have been approved by the chartered banks and which must meet the standards of the Canadian Direct Marketing Association;
- Appealing context, ease of use and good taste; and
- Satisfying one of six categories including Life, Leisure, Information, Shopping, Financial and Fun Stuff
The consumer will simply select the categories they are interested in and browse the week's top 5 websites in each category. Countless hours of research, surveys and reviews have determined this was the best system to attract the widest range of consumers. The variety of websites will change each week in order to give visitors variety and a reason to return on a regular basis. Starting in September, the best websites will be granted permanent residence on WTW.
ESP - CUSTOMIZED MARKETING
The second marketing avenue is what we consider to be the most powerful aspect of ESP and perhaps the most powerful marketing tool on the Web. Customized editions of WTW, which will become available in September. On-line consumers are accustomed to visiting websites hosting banner advertising. However, more often than not, the banner ads do not promote products within their field of interest. In the best case scenario, consumers visit a specific website i.e. a financial site and are inundated with banner ad's only dealing with financial items, thus making the ad's uninteresting and ineffective. The result is a potential consumer who must re-enter the World Wide Web every time they wish to purchase a product or service.
Enter customized Web This Week. Through completion of a confidential personal survey, consumers will be able to customize WTW to offer websites of interest and banner ad's that are geared to their specific needs and interests. For example, two completely different people can be at www.webthisweek.com at the exact same time but viewing completely different websites and banner advertisements.
The result is a consumer that can maximize their time on the Web and a marketing vehicle that can maximize revenues from its audience. The result for the advertisers is maximum utility of their advertising dollars, through "smart" or "intelligent" advertising, for which they would gladly pay a premium in relation to current banner ad rates. This is exactly why VNE has been able to attract the big corporate participants listed above.
As a result of customized WTW, VNE will be able to take advantage of other opportunities as well. For example, it is the ideal for new websites to launch with an immediate captive audience. Secondly, VNE can undertake direct marketing campaigns for their clients. Thirdly, VNE can offer consumers special offers, using means such as online coupons available only through WTW, in order to encourage consumer participation and maximize traffic to client sites.
The bottom line is that a credible website, offering customized browsing and merchandise, is a powerful tool with which to conduct e-commerce. We were very impressed with the system and our conversations with launch partners confirmed our enthusiasm.
For it's part, we would expect VNE to generate significant revenues from banner advertisements, use of their point of sale e-commerce system and the many other value added services they will now be able to provide to clients. There is much more that can be discussed but we believe the gist of this tool is now apparent
PROMOTION AND MARKETING OF WEB THIS WEEK
In an effort to bring WTW to the forefront of on-line consumers and users, VNE has established an impressive comprehensive promotional campaign, which includes the following:
- ISPs and corporate clients to co-operatively market themselves and ESP;
- ISPs and recognized high traffic sites will feature their own co-branded ESP home page with links to their websites and WTW content;
- A radio program called Web This Week is being launched this month in Southern Ontario and British Columbia. Rogers Communications is currently testing a national syndication format;
- Participation in trade shows and industry exhibitions;
- A printed version of WTW to be produced quarterly and available to ISP customers;
- Facsimile transmission of WTW programs on a weekly basis to thousands of qualified businesses and consumers in Southern Ontario and British Columbia, with national distribution scheduled for the fall.
CONCLUSION
We urge our readers to visit www.webthisweek.com at their earliest convenience in order to test the product themselves. Naturally, like any new service, we would expect more features to be added and changed to be made over the next three months as VNE fine tunes Web This Week. In our opinion, we are quite impressed not only with the product but with the solution it presents to the problems plaguing e-commerce today. More importantly, it's easier to make that conclusion when large retail corporations such as Canadian Tire and Business Depot share that opinion.
Currently, ESP is the number one ISP gateway service in Canada with 500,000+ consumers having access to the program. The company has projected that number to hit 1.5 Million North American consumers per week by October of this year and, by the middle of 1999, to have 4 Million weekly consumers from North America, Europe, Asia and Australia.
We are encouraged by these projections and believe Valu-net, in conjunction with its partners, can achieve these goals. If Valu-net can achieve these goals, it will translate into significant revenues and earnings for the company, which should translate into a higher share price for investors.
We will be watching progress of this program over the next 3 months and keep you updated with respect to achieving its goals. If Valu-net can make a success of these first three months, then it has the potential for significant share price appreciation if valuations of Yahoo! Excite, Lycos and other portals/search engines are any indication.
We look forward to your questions and comments.
Regards,
Agora Internet Relations Corp.
DISCLOSURE STATEMENT
AGORA INTERNET RELATIONS CORP. receives a monthly monetary fee from Valu-net Corporation. for the purposes of communicating with Internet shareholders - both current and prospective - to increase awareness of and interest in Valu-net Corporation. AGORA INTERNET RELATIONS CORP activities are aimed purely at keeping their clients' shareholders and prospective shareholders informed about their company. These activities consist of providing investors with previously disclosed factual information concerning the company, comments from company principals, copies of material that has been filed with regulatory authorities, comments prepared by registered brokers or investment dealers and material published in newspapers, magazines or journals.
AGORA INTERNET RELATIONS CORP does not participate in the maintenance of an orderly market in their client's securities, nor is required, or receives an incentive for, the maintenance or achievement of a price or trading volume for their client's securities at a certain level, for a specified period of time or by a certain date. AGORA INTERNET RELATIONS CORP. may, at any time, own shares in the company.
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