Lycos is a no-brainer.. WEB PORTAL DEALS — like Walt Disney Co.'s
investment in Infoseek Corp. and America Online's buyout
of Netscape Communications (whose Netcenter was
jockeying for portal prominence) as well as NBC's stake in
CNet's Snap — are based on the strategy that these
Internet launching pads will continue to capture the Net's
biggest audience.
However, such a strategy may not stand up in the real
world, where the Web audience is a fickle one and doesn't
seem to stay in one place very long.
Jon Calderon, a 19-year-old student from California,
could be called an average Web portal user.
Calderon goes to Yahoo for e-mail and basic searches,
turns to Lycos' HotBot for more complex searches and has
Microsoft Network set up as his home page. He avoids
other search directories “because they are too cluttery and
unorganized,” he says. (Microsoft is a partner with NBC in
MSNBC.)
Another Web surfer, Chris Rutan, a 30-year-old
software salesman from Boston, uses Excite as his home
page and to access his stock portfolio because “it is fairly
quick and easy to customize.” But he frequents Yahoo! for
its free e-mail service and its message boards.
For the millions of people who regularly use the
Internet, portal sites such as Yahoo, The Microsoft
Network and Excite have become the starting points
whenever they log onto the Web. What began as directories
of Web sites broken down into various categories (Yahoo!,
Lycos) or a comprehensive index of sites (Compaq's Alta
Vista) have grown into Web audience-gathering
powerhouses. “Over 90 percent of people online search for
information,” says Bo Peabody, CEO of Tripod, a Web
community service owned by Lycos.
AtHome agrees to buy Excite
SEARCHING FOR MORE THAN SEARCH
‘Search is a
customer attraction
vehicle, it's how
you get people in
the door, but they
don't stick because
of it.'
— ABHI GAMI
William Blair & Co.
Yet as popular as it is, search is not enough to keep
people coming back to one particular site, nor is it enough
to keep people within a search directory's ad-supported
pages for very long.
“Search is a customer attraction vehicle, it's how you
get people in the door, but they don't stick because of it,”
says Abhi Gami, Internet analyst with William Blair & Co.
“They stick because of e-mail, chat and bulletin boards.”
Initially, Web traffic leader Yahoo became the
preferred brand on the Web because of its rapid download
performance, analysts say.
Greg Hardin, a 36-year-old writer in New York, set
up Yahoo! as his home page because he had a slow modem
and Yahoo still loaded fairly quickly.
“I'm comfortable with it, so I'm sticking with it,” says
Hardin, who dropped his America Online account in favor
of Yahoo! Mail.
“But Excite's search engine is pretty good and I have
all the other search engines bookmarked,” Hardin adds.
“There's a huge amount of overlap of audience,”
Andrea Williams, Internet analyst with Volpe Brown, says
of the leading Web portals. “There's not an incredible
amount of loyalty from consumers, and all these guys are
trying to build loyalty with features and services designed to
get people committed to one portal or another.”
That's why to stay competitive the leading portals have
added personalization features (My Yahoo!, My Excite)
that give people a selected choice of news stories, sports
scores and stock quotes whenever they log in, as well as
free e-mail (HotMail, now part of MSN, and Yahoo Mail),
free home page building (Tripod Communications, now part
of Lycos) and content from major media brands (Disney's
ABCNews and ESPN, now part of Infoseek's Go
Network).
What is important to you in a portal?
Take our interactive survey
BUILDING ‘SWEAT EQUITY'
Whatever the flavor of the month — online auctions or
horoscopes — the portals offer it.
‘We're living
through a period of
portal chaos. The
portal services ‘try
everything because
they can't afford
not to.'
— RON RAPPAPORT
Zona Research
“We're living through a period of portal chaos,” says
Ron Rappaport, Internet analyst with Zona Research. ”[The
portal services] try everything because they can't afford not
to.”
In fact, with the more tools added, the percentage of
traffic generated from searching at the portals has been
declining, “not because it's becoming less popular, but
because the bigger they get, the more registered users they
get,” says Gami.
“Once people register and start building things on a
personalized basis, once you invest sweat equity, you'll
become a Lycos customer, for example, and you'll use their
e-mail and their chat groups and everything else.”
Indeed, registration is skyrocketing. Yahoo! reports
that it has 35 million registered users. Excite has 20 million.
Lycos reports 28 million registered users. At its official
launch on Jan. 12, Go Network claimed 9 million registered
users.
George Bell, CEO of Excite, told CNBC on
Friday that registered users come back “25 times more
frequently.”
But registered users don't always stick around.
Rob Molchon, 28, a computer programmer from New
York, registered at Yahoo and set up My Yahoo for stock
quotes, “but I haven't bothered to set it up for news.”
“For search, I use Alta Vista,” says Molchon.
No clear demographic distinction between the various
portals has emerged, which means they're attracting pretty
much the same audience.
Still, some audience trends are appearing.
One analyst notes that Lycos is stronger at home than
at work because home page building is done more at home.
On the other hand, “Excite is strong with the work
[audience] because it has a good personalized page and
good portfolio product,” says Gami.
If the Web portals are going to capture a committed,
loyal audience big enough to warrant the billions of dollars
invested in them, they're going to have spend millions
marketing their messages. “It's all about consumer
branding,” says Gami.
Ultimately, trying to be everything to everyone isn't
going to cut it.
“We're going to see a refinement and evolution of these
sites. These portal sites won't continue for the next decade
to be a catchall. Inevitably they're going to have to focus,
stake a claim and say ‘we own this,' ” says Zona
Research's Rappaport.
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