Shhhhhh:
Don't tell TMF, but it doesn't really look like advertising makes sense on YHOO and AOL. Moreover, if these sites are getting such a small slice of the pie, who in the world is going to advertise at one of 3 (and soon more) major on line book retailers? How big will their traffic get? Who would be interested in advertising to them? (HINT: other book and cd sellers)
archives.nytimes.com
July 27, 1998, Monday
Section: Business/Financial Desk
Technology; As Web search engines mutate into portal sites, the idea is to
get and keep your selective attention.
By Rob Fixmer
INTERNET business models, like the technologies that drive them, mutate faster than a flu virus. A case in point: the ''portal,'' a
scheme whereby a handful of mostly money-losing enterprises band together to form a mega-Web site that combines searching,
content, E-mail, chat and other services.
The portal, its defenders insist, is a whole greater than the sum of its parts because people who come for one service will
discover another and stick around. Advertisers and investors have demonstrated that they love this sort of reasoning.
Still, the logic of the portal concept is lost on some.
For one thing, there are amusing contradictions to the portal fad. Not the least of these is the spectacle of hundreds of
new-media geeks who spent years painting America Online as the trailer park of cyberspace now scrambling desperately to be .
. . well, America Online, the original, and some would say, only authentic portal.
Beyond simply creating a hip version of America Online, the idea is to make the portal site so enticing that World Wide Web
users will make it their first stop and so seductive that they will not want to stray elsewhere.
Among the first to be seduced were Wall Street and a few big media companies. All told, many billions of dollars have been
invested in enterprises that with two notable exceptions have yet to make a profit.
Why? Because advertisers have been drawn to portals at a level that defies all reason.
According to ''The Great Portal Shakeout,'' a recent report by Forrester Research, the top nine portals -- those of Alta Vista,
America Online, Excite, Infoseek, Lycos, Microsoft, Netscape, Snap and Yahoo -- account for a mere 15 percent of all
Internet traffic. Yet they attract 59 percent of all advertising revenue on the Internet, an extraordinary 293 percent premium.
Network television, in contrast, attracts 67 percent of all viewers and 84 percent of advertising, for a 25 percent premium.
Yet despite this enormous bonus, only the two largest portals, America Online and Yahoo, have so far managed to eke out a
net income. This reality, said Chris Charron, the analyst who was the lead author of the Forrester report, makes the infant portal
industry ripe for a shakeout that will leave only three or four winners dividing at most 20 percent of Internet traffic by 2002.
July 27, 1998, Monday
Section: Business/Financial Desk
Technology; As Web search engines mutate into portal sites, the idea is to
get and keep your selective attention.
By Rob Fixmer
INTERNET business models, like the technologies that drive them, mutate faster than a flu virus. A case in point: the ''portal,'' a
scheme whereby a handful of mostly money-losing enterprises band together to form a mega-Web site that combines searching,
content, E-mail, chat and other services.
The portal, its defenders insist, is a whole greater than the sum of its parts because people who come for one service will
discover another and stick around. Advertisers and investors have demonstrated that they love this sort of reasoning.
Still, the logic of the portal concept is lost on some.
For one thing, there are amusing contradictions to the portal fad. Not the least of these is the spectacle of hundreds of
new-media geeks who spent years painting America Online as the trailer park of cyberspace now scrambling desperately to be .
. . well, America Online, the original, and some would say, only authentic portal.
Beyond simply creating a hip version of America Online, the idea is to make the portal site so enticing that World Wide Web
users will make it their first stop and so seductive that they will not want to stray elsewhere.
Among the first to be seduced were Wall Street and a few big media companies. All told, many billions of dollars have been
invested in enterprises that with two notable exceptions have yet to make a profit.
Why? Because advertisers have been drawn to portals at a level that defies all reason.
According to ''The Great Portal Shakeout,'' a recent report by Forrester Research, the top nine portals -- those of Alta Vista,
America Online, Excite, Infoseek, Lycos, Microsoft, Netscape, Snap and Yahoo -- account for a mere 15 percent of all
Internet traffic. Yet they attract 59 percent of all advertising revenue on the Internet, an extraordinary 293 percent premium.
Network television, in contrast, attracts 67 percent of all viewers and 84 percent of advertising, for a 25 percent premium.
Yet despite this enormous bonus, only the two largest portals, America Online and Yahoo, have so far managed to eke out a
net income. This reality, said Chris Charron, the analyst who was the lead author of the Forrester report, makes the infant portal
industry ripe for a shakeout that will leave only three or four winners dividing at most 20 percent of Internet traffic by 2002. |
