Tag Archives: Infoseek

About 4402 days ago E-Commerce

Why Disney and AT&T Went Astray in Dot-comland

Newspaper headlines are filled with reports describing the demise of dot-com firms. The rapid reversal of fortunes, however, has not been limited to pure-play Internet companies. Some of the largest losses on the Internet have occurred on the books of Fortune 500 companies. Consider this: Disney recently reported that it would take a charge of more than $790 million related to restructurings within its Internet group. This amount was dwarfed, however, by an even greater icon of U.S. business. AT& T reported that it would take a noncash charge totaling $2.7 billion related to its investment and control of Excite@Home. Both Disney and AT& T are seasoned companies that have weathered numerous business cycles. It would be easy to believe that their management teams were caught up in Internet hype, which led to these massive losses. A deeper examination, however, shows a more subtle cause. In both cases, high executive turnover combined with hand-waving business plans that had a high assumption-to-knowledge ratio led to faulty decision-making at both companies. Business plans for new ventures involve many assumptions; that comes with the territory. Creating a vision of the future and then working backwards to assess how to achieve it requires educated guesswork. Inevitably, many guesses turn out to have been wrong. That is why companies entering unfamiliar markets must continually test assumptions, adjust their tactics, and then readjust their assumptions in a never-ending forward march. That, in part, was where things went awry at AT& T and Disney: A prolonged game of musical chairs in the executive corridors led to translation errors in the business plan. Just as in the childhood game of telephone, where a message is passed between a number of people and the ultimate message is grossly distorted from the original message, assumptions in the business plan were translated into certainties. Take Disney first. In 1995 the company was looking to enter the brave new World Wide Web arena. The depth of Disney’ s ambitions was widely noted. Jim Cramer, founder of TheStreet.com, a financial news and analysis website, reported that “there was a period of a couple of years where Disney acted as if it were the king of the web.” Despite its ambitions, Disney’ s online operations began in a modest manner. The first version was called Disney Online and consisted of interactive websites for Disney properties. Some of these were instant hits. ABCNews.com, ESPN.com, Mr. Showbiz, and Disney.com were all considered niche successes. Disney then decided to create a broad-based portal. The reasons were clear. Although the Disney stock was in a mild upward trend, it did not have the explosive growth of broad portals such as Yahoo or AOL. The Disney management saw this move as a way to rapidly create shareholder value. In addition, it allowed Michael Eisner to convey a clear, simple Internet strategy. It was easy for executives to rally around this strategy, and Disney had the media assets to make it plausible. Moreover, by 1996 the only metric of significance to portal performance was Media Metrix – a website that measures online traffic. By themselves, the focused Disney media sites would never be able to achieve enough traffic to register on this rating. In 1998 Disney created the Buena Vista Internet Group by merging its assets sites with a search engine, Infoseek. The deal was structured so that Infoseek got $70 million in cash, a $139 million five-year note, at least $165 million in promotion, and Starwave (a web-development outfit valued at approximately $350 million). Disney got 43% of Infoseek’ s shares, along with warrants, that when exercised would give Disney a 50.5% stake. However, the success of this new venture hinged on one critical assumption – that at this time in the portal wars, Disney’ s ability to promote across its “offline” network was sufficient to leverage itself into a new brand, Go.com At that time, this seemed a plausible assumption. Most portals had grown without any advertising simply as a result of word-of-mouth, or as some might say, word-of-mouse. Although Yahoo had the fastest growth rate among portals, absolute traffic numbers for Excite.com, Lycos, Yahoo, and Infoseek weren’ t that far apart. In comparison to pure-play portals, Disney also had another huge advantage: It was a bricks-and-mortar company with a vast arsenal of off-line promotion possibilities including theme parks, cruise ships, and retail stores. A member of a prominent strategy consulting firm that evaluated Disney’ s Internet operations says it just wasn’ t known how off-line promotion would deliver Internet traffic but that there was no logical reason it couldn’ t. That was one of Disney’ s most significant assumptions. Disney acted on its strategy cautiously, seemingly testing its assumptions. The Go.com portal rolled out slowly with only a small number of features. Some observers saw the slow rollout as a mistake, considering the immense growth rates of its competitors – but it did show that Disney was going through initial testing of product features. Harry Motro, CEO of Infoseek, told consulting firm Forrester Research that heavy offline promotion wouldn’ t start until the following year. Disney was not planning a major media blitz for more than six months as it tested various product/promotion bundles. The Go.com portal was making progress. Forrester reported that “offline media helped boost GO Networks’ reach from 25% of online users in December 1998 to 33% in June 1999.” At the same time, Disney executives were rapidly defecting. With a stagnant stock price, especially in comparison to pure-play Internet companies, and the scarcity of experienced media executives, Disney was ground-zero for recruiters. Jim Cramer recently described his experience with Disney at that time. “People kept getting deposed and new rulers were installed with regularity.” Akther Ahmed, president of Xavient Technologies, said “having Disney on your resume was all you needed for an offer.” Michael Eisner, CEO of Disney, acted to stop the defections. He bought the remainder of Infoseek and created a tracking stock in order to create Internet-style options-based compensation. Disney then began to marshal its massive “offline” assets to promote Go.com. The assumption that this would be effective had become a truism around the company. One former NBCi executive claims that the web-marketing notion that companies should “use offline assets to build online traffic” originated at Disney. By this time, however, the data was available to test this assumption. Go.com was getting some 50 million pageviews a day while Yahoo was getting more than 300 million daily pageviews and more. In addition, most of the Go.com traffic was coming from the Infoseek search engine, which was itself getting new competition from rivals such as Google.com and Dogpile.com. “If the slowdown in growth was known, Disney likely would have chosen a different organization of its assets and might have succeeded,” says Wharton marketing professor Peter Fader. “It likely wouldn’ t have stayed with the alternate (GO) brand.” Disney took another year to come to that realization. After months of heavy advertising, Go.com had little to show except for a $242 million operating loss. Following one last attempt to reposition Go.com into an “entertainment and leisure” destination site, Disney shut it down. Go.com continued to exist as a website, though in a much tamer form that primarily offered links to other Disney sites. On January 29, Disney announced that it would dissolve its online tracking stock, Disney Internet Group, converting its shares into common stock on the parent company as of March 20. Each outstanding share of the tracking stock was to be converted into a 0.19353 of a share of Disney common stock. As a result of the restructurings, a charge of $790 million was related to the write-off of intangible assets. Another $25-50 million in charges were attributed to severance and the write-off of fixed assets. Just as Disney’ s Go.com went astray, AT& T ran into serious trouble with Excite@Home. The company’ s long-standing profits from long-distance services were rapidly disintegrating, and it was looking for ways to capture a greater share of the consumer’ s wallet. One way to do this was to deliver both voice and Net access to consumers. Regulation prevented AT& T from getting direct access customers without going through the regional Bell companies, which still dominated the local phone services business. Cable access seemed like a promising way to reach the end consumer, and AT& T began a massive buying spree of cable properties. One of AT& T’ s most significant cable acquisitions was TCI, which owned a significant stake in Excite@Home and also used its exclusive high-speed Internet service by contract. By acquiring TCI, AT& T inherited the relationship. AT& T’ s management was primarily interested in gaining access to consumers and the Excite@Home assets just added value to the deal. AT& T made the assumption that this strategy would allow the company to create a content-access bundle that could get premium pricing. This was a foray into unknown territory for AT& T. According to Wharton professor G. Anandalingam, “It’ s okay to be opportunistic, but it’ s a very different matter to make the opportunism work.” AT& T repeatedly said that it did not want to be in the content business. Immediately, the assumption was put to a test on all these issues. Numerous counties, including Oregon’ s Multnomah County and Broward County in Florida, refused to transfer their local cable franchises over to AT& T. The accusation was the bundling of access-content, and the communities – and America Online – demanded that AT& T open its access channels to other content providers. AT& T, however, had a solid management team that understood this issue, led by Leo Hindery. A vice president at a large cable company who requests anonymity says that “TCI’ s CEO John Malone and Leo Hindery understood this assumption and how to navigate through it.” Hindery even made a speech at Stanford Graduate School of Business entitled “The Future of Content.” Through a variety of actions, Hindery made it known that AT& T would be better off selling access to its pipes to whatever content providers were willing to pay, rather than bundling proprietary content with access. The most plausible strategy seemed to be to divest the stake in Excite, a content portal, in order to allow open access to other content providers. Hindery then resigned to pursue personal interests. Malone was busy running Liberty Media and wasn’ t operationally near these issues. Also, the top leaders at Excite – Tom Jermoulak, followed soon after by George Bell – resigned. These events were followed by a continual departure of executives from AT& T and Excite@Home. The new management executed a plan that was based on a premium priced content-access bundle. Responding to America Online’ s acquisition of Time Warner, AT& T began to assemble its own broadband Internet service. It was as if an assumption that had already been proven wrong now was suddenly being acted upon, as if it were a given in the plan. AT& T offered to buy out the stakes of two minority partners in @Home, Comcast and Cox, at a 27% premium. AT& T also took over 74% of Excite@Home voting stock and consolidated financial statements which diluted its 2000 earnings by 20 cents a share. In addition, AT& T extended its own non-exclusive carriage of @Home to 2008, six years past the expiration of its exclusive carriage of @Home in June 2002. At the same time, it was stated that after June 2002, other Internet service providers and portals would share that space. Initial deals were struck with Mindspring and Earthlink. Not surprisingly, the value of Excite, already at a 52-week low, plummeted which showed up in AT& T’ s books. Ironically, Excite@Home took a $4.6 billion write-down of its assets from its content acquisitions. AT& T’ s 23% share of the noncash charge equaled $1.1 billion. Also, AT& T took another noncash charge of $1.6 billion because of the plummeting valuation of Excite@Home. A recent report in BusinessWeek Online offers a final footnote. “The end may be near for the once-mighty Excite Internet portal,” the publication writes. “Patti S. Hart, appointed chairman and CEO of Excite@Home on April 23, already is exploring opportunities to sell the money-losing Excite business and may shut it down in the next several months if no buyers emerge.” What overall conclusions may be drawn from these twin disaster stories? At Disney and AT& T, the companies began a careful process of entering unfamiliar territory by working their way through assumptions about the future. It appears, however, that accelerating executive departures led to translation errors in the operational plans. Assumptions were treated as realities, a formula that has often been known to lead to massive losses. The take-home lesson: Watch out for business plans with a high assumptions-to-knowledge ratio. They can get distorted as they pass through a rotating set of executives, and get you into a lot of trouble. All materials copyright © 2001 of the Wharton School of the University of Pennsylvania.

About 4767 days ago Telecom and Wireless

The Business Portal

In my last column I talked about the importance of vertical portals (vortals) in creating communities of trade. But many readers asked how they could use the idea of a portal to get their own house in order before stepping out into the world of partner and supplier portals. In this article we will look at how the warp-speed developments on public Internet portals offer a set of clues to the beginnings of a radical new phase of computing, which will transform the entrepreneurial organization’s use of information in the early years of the coming century. Wall Street’s year-long mania with Internet shares has brought many new company names and business plans to view, none of which have received more intense attention than the Internet “portal” companies: Yahoo!, Lycos, Infoseek, and Excite, and the “other” broad-based portal players, a diverse group including such prominent names as Netscape, AOL, AltaVista, and Microsoft. Many Web surfers now integrate portal visits into their online experience — but the concept of a portal is just as fascinating for entrepreneurs challenged with charting the future of their own information strategy with less than adequate resources to create highly customized desktop applications. It may seem unlikely that some of the hottest names on the World Wide Web are pointing the way to the next phase of information management for the wired corporation — particularly since much of the information content on these sites is fundamentally of little or no value to businesses. But the solution to many of the challenges that fast entrepreneurial companies face lies in the idea of the portal. While large enterprises may easily customize information management solutions and systems by using vast staffs of programmers and developers, small business has always found itself at a distinct disadvantage when it comes to deploying internal information systems. The result is a hodgepodge of desktop applications that often create as much frustration as they do benefit. What, if anything, can these public portals teach you about creating more effective information systems inside your organization? Let’s first look at why public portals have become so popular. The initial value proposition was simple: No one could hope to find anything in the vastness of the Web through “conventional” means. Offering a full-text index of Web content provided a great leap forward and a chance to take advantage of the new hyperlinking capabilities built into the Web. Next, portals became “navigation sites” as it became apparent that developing professional researcher skills to find weather information was not high on the average user’s priority list. To address user frustration and reduce the average “seek time” to obtain relevant information, navigation sites added the function of categorization — filtering popular sites and documents into preconfigured groups by the meaning of their content (sports, news, finance, etc.). Today these sites not only provide search functionality and navigation, they also offer community (e.g., Yahoo! Financial’s threaded discussions) and personalization of content by the user (My Excite Start Page). Face it, no one wants to surf 500 channels of broadcast television any more than they want to visit 500 Web sites to make a decision. This is the reason many popular public Web sites have a “My.com” version of their interfaces. Psychologists have long known that as the noise factor around us increases, our filtering mechanisms also increase — this is a basic survival skill. It is what scientists and engineers refer to as signal-to-noise ratio — the same principle that SETI uses to sniff out intelligent life by scanning the chaotic radio noise of the cosmos for a discernible pattern of intelligence. As the background noise of our world increases, we need to become better at identifying relatively weaker and weaker signals. Yet filtering, without an accompanying focus, can be a dangerous proposition – the equivalent of blinders on a raging plow horse. Search, navigation, and personalization: These make perfect sense on the World Wide Web, but are the needs of internal knowledge workers in your organization fundamentally different? Clearly not. How do you create this sort of rich environment without a programming staff of hundreds? It is here where corporate portals intervene and remove a world of pain for the entrepreneurial enterprise. Aside from the basic accounting systems that every business needs to have in place, the remainder of the information systems in a small business are highly individualized collections of content and applications. In the fast-paced and constantly understaffed world of small enterprise, there is no single, centralized, predetermined information system. In simple terms, individuals share the responsibility for defining the organization of business-critical information. By the time a formal IT group defines most applications, it is time to move on and redefine. On the other hand, as workers come and go, the continuity of their tasks is subject to enormous disruption since the hodgepodge of information systems they used to get their job done is virtually incomprehensible to anyone else. Corporate portals make it possible to both create personalized work environments without extensive IT support and share these work environments with coworkers. Corporate portals allow you to bring together information sources, applications, and Web resources from nearly any source and integrate these into a single comprehensive desktop. Imagine a customized instrument cluster holding all of the vital signs of your organization — markets, suppliers, customers — and you start to get the picture. Best of all, there are 40 separate corporate portal products on the market to pick from! With a corporate portal in place, anyone in the organization can create a personal view of the processes, tasks, customers, and market conditions that are most important to them. For example, a salesperson may create a sales portal that shows the current correspondence, inventory levels for outstanding orders, payment history, phone log, and the most recent press release for that customer. And it is all done with no programming other than clicking or dragging a mouse a few times. Most portal products also come with a large library of what are called gadgets, nuggets, or components, which are already programmed to work with most popular applications, from spreadsheets to databases. Users simply check off the components they want to use in their portal. (OK, there may be a bit of programming needed to set up the components so that they work with your applications, but this is done only once and is usually trivial compared with programming enterprise applications — most of which probably couldn’t come close to offering personalization anyway.) For the small- to medium-size business, a corporate portal can be heaven sent, providing users with a level of sophistication and integration that even the largest enterprises would envy. Thomas M. Koulopoulos is president of Boston-based Delphi Group and the author of five books. © 2000 Delphi Group

About 4797 days ago Setting Up a Website

Understand How On-Site Search Works

Learn how on-site search is similar to (and different from) Web searches and find out about the mechanics of on-site searching. Then you’ll need to decide what search options you’ll want to offer. Learn How On-Site Search Compares with Web Searches When you look for content on the Web using a search tool such as AltaVista or Excite, the search tool looks in its database of indexed Web pages from all over the Internet for the results of your query. When you do an on-site search, the site search engine only searches and indexes pages on that site. Notice the similarities between Web and on-site searches. Both types of searches are conducted by using keywords, key phrases, and various qualifying terms such as a “+” or “AND” to make a request that only pages that contain both search terms are indexed. In site searches as well as in Web searches, you will see an alphabetical or “ranked” list of pages that contain the term(s) you’ve typed in to the search box. Find out how on-site searching works. Typically, a site search engine has a “robot” or “crawler” function that examines the entire site at designated intervals, such as daily or weekly. When it notices a page that has been updated, added, or altered, it adds the content of the page into its database. Then, when you ask it to find pages that contain certain words or phrases, it conducts a search of its database. It will “rank” the relevant pages using such criteria as how many times the requested words appear in the document, how close to the top of the indexed Web page they appear, and how close together each instance of a keyword appears to another. This is called proximity searching. The theory behind this is the more times a site includes a word, and the higher up on a page it indexes it, the more important the word or term is to the page. Understand Your On-Site Search Alternatives Learn about the different types of searches, as well as how searchable data fields and indexing work. Choose a search engine that allows as many search options as possible. Make sure that, regardless of what options you offer, you provide clear instructions of how to use your search engine for best results. Find out what makes for a good Web site search by visiting Computerworld‘s evaluation of Web sites with exceptional search engines. Understand full-text searches. A full-text search allows for more robust searching, allowing your visitors to find any type of content you’ve put on your site, no matter where it is. Yet full-text searches run the risk of being overly comprehensive. The inexperienced searcher may find that a full-text search produces no results because the information requested is too precise. Understand keyword searches. The advantage of a keyword search is that it can identify topical areas and is a common form of easy searching. The disadvantage is this function will only be as accurate as the keywords you use to mark your documents. Keyword searches cannot direct the searcher to specific words or phrases that don’t exactly match a keyword they’ve entered. Understand searchable data fields. This can be a valuable function, especially if you’re selling merchandise on your site and have equipped a commerce server to work with an online catalog of products. All documents must have the included fields to be searched this way. If you have hundreds of products with specific serial numbers and price ranges, you must take extra care to keep the search engine’s database current, and build an interface with your inventory management system if at all possible. You must remember to add products as you make them available, however — and to take them off your search engine index as they are discontinued, or your search results will not be accurate. Understand indexing. If you’re selling a small number of products, you may wish to manually index them alphabetically. If you do this logically and make this page easy to find, you may not need a search engine at all. Storing data in an index reduces the load on the server, allows a large pool of data to be searched by many people at the same time, and lets the search engine list pages in order by the relevance of their text to the search terms. A site search indexer reviews the files on your Web site and creates a searchable index of all the words it finds. These indexers locate your files through either local file indexing or remote spider indexing. Local file indexing resides on the same server and therefore requires space on that server. Remote, or robot, and spider indexers review all pages and then index all currently linked pages. Many large portal sites use robots and Web spiders to index sites. Site search engines, such as Ultraseek Server, can use robots to gather data remotely for indexing. Indexing can allow a site visitor to look for a term in the product specs that describes a product functionality they are seeking. A Web crawler may not be able to access data stored in a password-protected or encrypted data sections of your site. For more information about how indexing works, see the Infoseek article ” Robots & Spiders & Crawlers: How Web and Intranet Search Engines Follow Links to Build Indexes.” Plan for sound and video file searches. Audio and video are useful tools for demonstrating your products in use, offering greetings to your customers, or showing your plant or facilities online. If you have audio or video on your site, you should equip your online search engine to index content with audio and video file extensions. Plan for more complex searching capabilities. You may want to consider whether you’ll want to offer multiples queries, date ranges, multiple data formats, and stemming. Generally speaking, the more information and documentation you have on your site, the more valuable these advanced searching methods will be. Multiple queries mean that searchers will be able to look for several terms at once. With data range capability, visitors will be able to look for content that was posted on, before, or after a certain date or within a given range of dates. Stemming means that if your site visitor types in only art of a word, the engine will be able find pages that contain the complete word. Because some people may not know how to spell the names of some of your products, this feature can help them find what they are looking for. Copyright © 1995-2000 Pinnacle WebWorkz Inc. All rightsreserved. Do not duplicate or redistribute in any form.

About 4857 days ago E-Commerce

Why Your Web Site’s Rank Matters

There’s a pervasive myth among Web site marketers that simply submitting your Web site to hundreds or thousands of search engines will increase traffic to your site. That’s not true! Submitting alone does not guarantee that your site will be found in these search engines. When someone queries a search engine for a keyword related to your site’s services, does your page appear in the top 10 matches – or does your competition’s? If you’re not listed within the first two or three pages (the top 10 to 30 search matches) of results, you lose, no matter how many engines you submitted your site to. Studies demonstrate that most search engine users have neither the patience nor the time to wait for more than three pages of search matches to load. If your site isn’t found in the top 10 to 30 matches when someone performs a keyword query in the major search engines, your Web site might as well be a billboard in the woods. Nobody will find it, nobody will come. There are two barriers to solving this problem. First, you have to know the techniques that will move you into a top 10 position. Once you learn how to achieve a top 10 search position, you have to monitor your progress because rankings take time to rise and can fall without warning. Monitoring rankings manually is too time consuming. Fortunately, this critical step can be performed effortlessly with rank measurement tools now available. A top 10 ranking in a major search engine such as Yahoo!, Lycos, or AltaVista often will generate more targeted traffic than an expensive banner advertising campaign. Plus, a good search engine position is free – anyone can do it. Consider this: Virtually everyone begins browsing the Web at one of these 10 major search engines: 1. AltaVista.com 2. AOL 3. Excite.com 4. Go.com (the search engine formerly known as Infoseek) 5. GoTo.com 6. HotBot.com 7. Lycos.com 8. MSN.com 9. WebCrawler.com 10. Yahoo.com Your rank within these search engines determines how many people will find and visit your Web site. Major search engines attract more visitors than any other Web sites. Search engines are among the most visited Web sites, according to MediaMetrix.com and other audit bureau services. Other forms of online advertising, such as banner ads, are expensive. Just a few good positions under a few important keywords can deliver the same or better results – for free! Bulk submitting is a bit like being in the phone book. It doesn’t ensure even one phone call – you need a good listing and a large display ad in the yellow pages. In search engines, the higher you rank under important keywords, the more traffic you’ll get. Search engines generate more traffic to Web sites than almost any other source. This was demonstrated by the 10th WWW User Survey conducted by the Georgia Institute of Technology (paraphrased): The ways in which people discover Web sites: 1. Links from other Web pages 88% 2. Via search engines 85% 3. From friends 65%