Cybersense—Free Internet and Portals Hit By Slowdown in Economy

0

During a recession, people scale back their expenses and their expectations until the economic storm blows over.

The same is true online, where companies are being forced to replace their delusions of grandeur with more realistic goals. And that’s bringing an end to a pair of brash business models born in less rational times: Web portals and no-charge Net access companies.

Let’s start with portals, those one-size-fits-all sites that try to be everything to everybody. Their creators aspired to build television networks for this new medium, but they didn’t stop with news, sports and weather. Trying to imitate Yahoo, the Net’s pioneer portal, they threw in search engines, shopping, chat rooms, customized greeting cards, free haircuts, origami lessons and anything else they found lying around the kitchen.

If you cooked this way, your meals would taste like muddy, overdone stew. The fact that portals have turned out to be similarly unappealing is all the more disappointing, given what their backers are paying for ingredients.

Smarter companies have already given up the great Yahoo chase. Disney’s Go.com is now dot-gone, leaving the company to build out its successful niche sites like ESPN.com and DisneyBlast. Alta Vista, meanwhile, has refocused on selling its search-engine technology. The quicker their fellow portals follow suit, the better off they’ll be.

The problem is that it’s all but impossible to operate online at a scale necessary to support portal sites. The general-interest programming that drives network television doesn’t work online because, in truth, there’s no such thing as “general interest.” Each of us has a unique set of interests, and the Internet makes it possible to pursue them all in a pattern that no portal programmer could predict.

The current dot-com doldrums will serve a useful purpose if would-be Web giants realize the value of smaller, less-glamorous markets. A network of well-run sites catering to fans of role-playing games, for example, would turn more profit than NBCi will ever see. If the media giants don’t catch on, thousands of small-time players will be happy to scurry around collecting profits under their noses.

Companies that provide free Internet access, meanwhile, suffer from a less complicated problem. They’re swapping something for nothing, and that’s pretty much a raw deal any way you write it.

In case you’ve never downgraded your Net service to vagabond class, here’s how it works. To get free access, you have to devote a portion of your screen to an advertising window that never goes away. You also must let the Internet service provider, or ISP, track your surfing habits so that window can be filled with ads for stuff you might actually buy.

Free ISPs hope to sell enough ads to cover the cost of the service. But ad revenues have dwindled during the current slowdown, revealing a more fundamental problem with the business model.

Simply put, who wants to advertise to people who can’t afford to pay $20 a month for Internet access? What are you going to sell them, food stamps? Not everyone using a free ISP is poor, of course. But they’re all thrifty, and that’s not a trait that attracts many advertisers.

Juno, one of only three brand-name companies still in the market, is thinking about adding yet another indignity to the process. To secure free access, you might have to let the ISP borrow your computer when you’re not using it.

The company wants to chain together millions of PCs across the Net and use their combined power to solve complex problems. Research labs and companies that can’t afford their own supercomputer could instead pay Juno to crunch their numbers for them.

I don’t anticipate a lot of takers. Most people will be freaked out by the idea of leaving their computers powered up 24 hours a day so the machines can dial into the Internet by themselves and swap data. And if I owned some biotech company, I doubt I’d trust my mission-critical research to an ISP particularly one operating in a market where businesses seem to fail every five minutes or so.

Juno scores creativity points for coming up with the concept or rather, borrowing it from SETI@Home and other distributed computing projects. And in the good old days, they could have cashed in those creativity points for millions of dollars of venture capital.

These days, though, it’s customer dollars they’re after. And for portals and free ISPs, those dollars aren’t getting any easier to find.

To contact syndicated columnist Joe Salkowski, you can e-mail him at [email protected] or write to him c/o Tribune Media Services Inc., 435 N. Michigan Ave., Suite 1400, Chicago, IL 60611.

No posts to display