A little over a year ago, I bet most of my savings account on a
couple of internet push technology companies that had just filed for
In retrospect, with push already yesterday’s technology, it doesn’t
appear the smartest of moves.
But this year I’m confidently betting everything I have left on portal
companies because portals, unlike push, are here to stay. Believe
Portals are the new holy grail on the web, both for internet users and
advertisers. They’re sites that purport to offer everything a surfer
could want in one place - content, communication and community - and
which can deliver the sort of audience numbers advertisers can’t find
elsewhere on the web.
Small wonder that any website once described as a start page, a search
engine or a directory service is now calling itself a portal. The cult
of reinvention has never been so big.
In the past, sites such as Yahoo!, Excite, Infoseek and Lycos were
places that surfers only visited in order to be taken somewhere else.
However, their new incarnations are sprawling virtual malls that offer
everything from news and weather to travel services, banking, shopping
In addition they offer a plethora of free services, including e-mail,
chat and personal home pages.
The race to supply the best of these services as part of the package has
kicked off a number of acquisitions: Microsoft has bought Hotmail, the
free e-mail company; Excite has paid dollars 35 million for Netbot, an
online shopping technology; and Yahoo! has bought the free e-mail
company, Four11, while also taking a dollars 5 million minority stake in
Geocities, the hugely popular US online community.
All these elements are designed to keep surfers coming back, time after
time. In fact, most modern portal owners would be happy if you never
went anywhere else.
This is certainly true of Charles Walker, the UK managing director of
Lycos. ’If you want to know what the weather is like, to find out what’s
on TV and to check the news, you can do all of that on Lycos,’ he
’The same is true if you want to chat and get free e-mail.’
Lycos is developing co-branded areas with its content partners within
the Lycos portal. The ad revenue is split, but the surfer never leaves
Walker believes this provides ’a more satisfying user experience’ as
well as making it more likely that the user will develop brand loyalty
to Lycos, and therefore use more of its services (and see more of its
ads) than if they were taken from the site after clicking on a
This, however, is still what happens at Microsoft’s portal, MSN. It has
signed-up more than 60 content partners, including CampaignLive, with
the aim of providing users with the top line of that day’s news. But if
they want to get the full story, users must click through to the site
Tom Bowman, the advertising sales director at Microsoft Online, believes
that this ’best of’ approach is what users find most helpful.
’The web can be confusing, and for new users even more so,’ he says.
’There is so much stuff out there that information overload was sure to
come to the fore on the web. Microsoft’s mission is to make the web more
useable and more efficient. I want people to stay until they get what
they want - checking the sport, weather and e-mail.
’Ultimately you might go through to someone else’s site, but you go
through us to get to them.’
If the exact strategies differ, though, the prize they’re all after is
the same: online advertising revenue.
While adspend is small at the moment, the research specialist, Jupiter
Communications, predicts that it will be as high as dollars 8 billion
globally by 2002.
For portal owners, the maths is pretty straightforward: the more users
they can attract to their site, the bigger the slice of that cake they
can call their own.
The potential gains are big enough to turn the portals themselves into
hot properties. Disney’s recent acquisition of 40 per cent of Infoseek
for dollars 70 million and Intuit’s purchase of 20 per cent of Excite
for dollars 40 million only underlines their attractiveness.
The basis for these investments is that portals will be the chief
providers on the web of what advertisers need most and can find least
easily - volume.
It’s certainly one side of the equation.
It would be hard to imagine Procter & Gamble, for example, fulfilling
its own forecast that it will spend 80 per cent of its global ad budget
on digital media by 2002 without being satisfied by the mass reach of
And it would hardly make sense for Unilever to have signed wide-ranging,
three-year agreements in July with AOL and Microsoft, under which it
will develop interactive marketing and new-media programmes for many of
its key brands.
In the short term, portals bring other advantages for advertisers.
As Andrew Walmsley, head of digital media at Bartle Bogle Hegarty,
points out: ’Because of the increased size of portals, advertising sales
are running in a more effective and consumer-focused environment and
that will be good for the industry.’
But for portals to be a real success in the long term, they must hang on
to surfers after initially catching them.
At the moment many people are still in too much of a hurry to move on,
according to Benjamin Ensor, an analyst at Fletcher Research.
’The click-through rates are lower on portals than they are on
destination sites, like ZDnet or ESI, and that is a problem. What this
shows is that, as portals get bigger, specialist content sites in areas
such as IT or financial services should continue to prosper.’
Portals argue that, as people get the hang of the net, they stop just
surfing for fun and go in search of specific information - be it a stock
quote, a currency rate or the day’s news - which they wish to find with
the minimum of effort.
After all, why go to three places when you can get them all in one?
In any case, the next generation of web consumers who will come online
are unlikely to use the web in the same way as those who have been
surfing since its early days.
The new consumer audience will have different habits and is going to be
more mainstream, predicts Nigel Sheldon, a managing partner at
’One of the joys of the web since its inception has been the delights of
going off and finding those fanzine-type sites,’ Sheldon says.
’There will always be people who do that and visit news groups and
discussion areas. But for mainstream consumers, I think it will be
enough for them to go to trusted portals.’
But even if portals grow into mega sites with audience figures to match
TV ratings, some advertisers will still not be satisfied. Volume, while
important, is hardly unique in the media marketplace and is not
necessarily the best selling proposition for the web.
Jason Goodman, a business director at BMP Interaction, is more
interested in the other side of the equation. ’It is not merely about
aggregating large amounts of users. The real opportunities of online
advertising are not about broadcast marketing. They are far more about
So is the strategy adopted by portals a mistaken one? Will large
audiences be enough to attract the biggest slice of ad revenue? Or will
sites offering highly targeted audiences prosper more?
Clearly, the site that offers both will be the best-placed of all, and
Evan Rudowski, director of European operations at Excite, says that is
precisely what his company is doing.
’Portals aggregate a large audience and then organise it and segment
it,’ he explains. ’This creates the unique characteristics of one-to-one
marketing and one-to-one interactivity. I think Excite is the only one
of the portals that is focused on one-to-one marketing.’
Rudowski says part of the way this is done is through online
These are the latest ’must have’ add-on features for portals. They allow
users to set up their own home pages, which are built around their
Neighbours chat online, and find people with similar interests. For
advertisers, these interest groups are self-selecting target
Excite may be furthest down the line at the moment, but you can be sure
that its rivals will soon be making similar moves. I hope they do, or my
second bet might start to look as dodgy as my first.
CASE STUDY MSN
Microsoft’s recently redeveloped portal, MSN.co.uk, has a very good
chance of success not least because it is the default home page on the
popular Internet Explorer web browser, also made by Microsoft.
The first thing you will notice about MSN.co.uk is that it does not look
like a typical search engine portal. MSN is presented in much more of an
ezine style, opting as it does for a news-led front page.
With its 60-plus UK content partners, it clearly stands as the most UK
focused of any of the portals.
The idea is that everything you want is within easy reach of the home
page, with a search engine to your left, the news in the middle and an
array of MSN services to the right.
The MSN idea is to bring the ’best of’ everything on the web
It is split into a number of main channels, each of which has a wide
array of sub-categories, ranging from business to computing to chat,
news and football supplied by partners including ZDNet, the Electronic
Telegraph, Teletext and Megastar.
MSN is a little light on the personalisation front and has not ventured
into online communities, which Lycos, Yahoo! and Excite are currently
big on. But like most other portal services, Microsoft does offer free
e-mail, via its Hotmail subsidiary, though it is not fully integrated
In addition to Hotmail, there is an array of services on offer from
other MSN partners such as Scoot, DHL and Cellnet’s Genie.
Pretty much the original portal, it’s really an all-American affair,
with no UK content. News comes from ABC.com and is held on ABC’s
Has free e-mail available, Webmail, a pretty good message board area and
an instant messaging system. Looks very much like Yahoo!.
News provided by the Press Association and Reuters, and a strong finance
section. Also offers e-mail, chat, message board services and a good
degree of personalisation through My Yahoo!.
Entirely a US service, with free e-mail, but nothing in the way of
personalisation or community. Major relaunch plans in the pipeline.
Recent tie-up with Bertlesman has given birth to 12 European Lycos
UK site lacks local news, which is provided by Associated Press. No
personalisation on UK site but Tripod communications have been a big
success in the US.
UK site is not much more than an ad for joining AOL. Recently redesigned
US site has usual shopping list of services but AOL is really about its
Strong in continental Europe, there is very little going on at the UK
site. No free e-mail, no personalisation and no news. US site much more
comprehensive with news from Reuters, and a good finance section.
CASE STUDY EXCITE
Excite easily stands out from the portal pack with its high degree of
personalisation, content and community features and well-assembled
At the moment, a lot of this is only available on excite.com but should
be on excite.co.uk within the next six to nine months. To some degree it
really does not matter. A lot of UK users surf US sites and invariably
choose one as their home page.
What excite.com does so well is allow a high degree of
One thing about going to a search engine type site is the look of
They all invariably look the same. What Excite does, to a far greater
degree than MSN or Yahoo!, is not only choose what you have on the site,
but what order it appears in.
This allowed me to create a page that carried the top news stories and
movie listings news, with stock watch, favourite links and services
There is a lot of content to choose from. It will even integrate company
news with the companies in your portfolio.
It also has excellent chat and message board features and the new
service, Excite communities, which offers surfers the chance to connect
with a like-minded group of people. It’s the first service of its kind
on the web, combining traditional web publishing tools with community
Community topics range from poetry to the Volkswagen Beetle.