Alliances, the right technical tools, and a focus on a well-defined demographic group are keys to survival on the Internet today, according to an industry panel convened here to offer tips on how to convert Web trends into business opportunities.
Companies of all stripes – from corporations that have already built large portal sites to small businesses still struggling to figure out how they should best take advantage of the Web – have much to gain by taking to heart some basic rules of thumb, suggested Michael Erbschloe, vice-president of research for consulting group Computer Economics Inc. of Carlsbad, Calif.a, and moderator of the Comdex panel.
One of the major trends on the Web is a move to build “communities” of Internet users with similar interests, but companies attempting to do this should be wary of several traps, including a reliance on inflexible, costly development tools, according to the panelists.
Companies that hope to generate revenue on the Web are moving away from the idea of Internet portals – at least, from the way they were originally designed, as sites intended to have broad appeal by offering a wide variety of resources and links to disparate third-party sites, according to Sean Daley, an executive producer for content and communities at BetterManagement.com, of Beaverton, Ore. That site is itself a portal, Daley noted, though since it focuses on providing information to managers looking for ways to improve organizational performance, it fits the new model for portals as resource sites for strictly defined demographic groups.
“Portals were originally designed to grab as many people as possible,” Daley said. “Now, everything (on the Web) is going to be uniquely focused and directed. People expect a higher degree of personalization and selective information on the Web these days.”
Though even large retail portals such as Amazon.com offer personalization tools, such as the ability to suggest books or music based on a consumer’s previous purchases, Internet users – especially professionals – are also increasingly turning to more specialized sites, according to the Comdex panelists. Such sites expect to offer more in-depth information and a way of engaging in discussion with a community of like-minded peers, they said.
“Community stems directly from demographics…who are you trying to reach? That’s your community and you have to understand how people respond to what you offer them,” Daley said.
Continually measuring how well a site responds to the needs of the community it is trying to create is a crucial, but tricky task, Daley said.
“If you think you can just throw money at the problem and walk away you will fail miserably,” he said.
BetterManagement.com creates profiles of users of its Web site. The profiles database is linked to the database in which the site’s content resides, Daley said. Access to certain sections of the Web site depends on a user’s interests, as outlined in his or her profile, Daley said.
After spending several hundred thousand dollars on a system from a leading Web content management software provider (which he declined to name), Daley said BetterManagement.com ended up using Microsoft Corp.’s Visual Interdev suite of development tools to create a content management system for its site. The profile system was created with the tools, and the content database is Microsoft’s SQL Server.
BetterManagement.com gave up on their original content management system when they found that the Microsoft suite was cheaper to run, and was much more flexible.
However, some companies don’t have the expertise to create content management systems from scratch, pointed out William Hendricks, president of Hendricks Training, a training course developer based in Overland Park, Kansas.
For such companies, there is hope, he said.
“You don’t have to have a lot of money, or even a Web site, to be a presence on the Web,” Hendricks said. The key to establishing a Web presence, especially for small businesses, is to strike alliances with companies that can trade Web real estate for expert content, he said.
“Your company has certain things it knows very well, operational excellence in certain areas, and that can be translated into content that a company with a strong Web presence can use,” Hendricks said.
Application Service Providers (ASPs) can also be used to host services developed by small companies that don’t have the resources to maintain sophisticated sites, he noted.
As an example, Hendricks said that he was approached by a small company that wanted to develop a training course for its fork-lift operators. Hendricks teamed up with the company, developed a Web-based training course for fork-lift operators that is maintained by an ASP, and he is now marketing the course to any construction-related company that may need it.
“It wasn’t worth the effort to develop a course for a few people in this little cement firm, but I used their expertise to create a course that could be marketed to other companies, and accessed over the Web. Whenever the course is sold, I split the profits with that little company,” he said.
Hendricks also has an agreement with a fork lift manufacturer, which sells the course to its customers, and gets a percentage of the resulting training revenue.
“Most companies still define themselves by the products that go out the door but they may have ‘best practices’ expertise that they can develop and market … for specific communities,” summed up Erbschloe, the panel moderator.