NEW MEDIA: SPOTLIGHT ON VIRGIN.NET - Virgin's portals attract traffic but advertisers are not biting. Can Virgin resolve its split net personality and take a lead? Alasdair Reid reports

You'd think that the Virgin empire would be pretty damned good at

this internet malarkey. The brand value territory inhabited by most

online brands - young, clean, irrepressibly optimistic - is in the same

ballpark where the Virgin brands like to play.



And the Virgin territory is also about utilities, big deals like

transport, gas and electricity, pensions - Sir Richard Branson's

alternative version of the Welfare State. These are utilities with

go-faster stripes, admittedly, but then what is the internet but a

utility with go-faster stripes?



And yet, as last week's announcements from Virgin.net only served to

remind us all, Virgin has been no better at this business than anyone

else. The Virgin.net operation is being restructured once again, ahead

of the launch (or relaunch, depending on the way that you look at it) of

an unmetered internet access package.



The internet service provider part of the business (run relatively

independently over the past couple of years) has been remerged with the

Virgin.net operation, resulting in four senior redundancies, including

Virgin.net's chief executive, Alex Heath. Painful, obviously - but will

it be worth it?



At first sight, one of Virgin's main big picture problems seems to be a

touch of schizophrenia, because as well as Virgin.net it also boasts

Virgin.com, which, after all, is the most obvious destination for

Virgin-bound surfers. Virgin.



net is a portal, Virgin.com is ... er, a portal too. Perhaps this serves

to illustrate the adage that there are portals and there are

portals.



Virgin.com is what is known technically in the trade as an extremely

drab portal - a directory of Virgin sites implemented in a dingy variety

of red. On the other hand, Virgin.net is a portal in the sense that it

makes a cheerful use of a whole spectrum of colours and there's the

added bonus that they are sourced from outside the Virgin empire as well

as from within the Virgin empire. It employs the services of journalists

who help lend it the aura of a magazine.



Virgin.net is also where you find a button tempting you to sign up with

Virgin as your internet service provider. And this is a clue not only to

the site's heritage but to Virgin's broader philosophical struggles with

the internet.



As one observer puts it: "Virgin badly scuffed its collective knees on

the tailboard trying to clamber aboard the internet bandwagon and I'm

not sure it's ever been clear about what it wants to do. More than most,

it's found itself in the position of having to react rather than

lead.



It was quite clear that it was going to dominate the internet service

provider world until Freeserve came along and then it was a case of,

'OK, we need to make more money, how do we attract advertising to our

internet service provider sign-up site?'"



Freeserve turned the internet service provider market on its head three

years ago by offering a subscription-free, but metered service. Virgin

was a serious player among subscription internet service providers.

Freeserve obviously changed the rules but, with broadband on the

horizon, those rules may need rewriting again.



Alex Dale, the managing director of Virgin.net, comments: "The new

package, called Virgin.net24seven, is an important product for us and we

are looking to convert a third to a half of our current customers within

a couple of years. We have looked at areas where there's been an overlap

between the portal and the internet service provider operation -

marketing, for instance, and product development. It certainly doesn't

change the site."



And, to be scrupulously fair, the site hasn't actually been too far off

the pace. There are only a handful of portals attracting decent

advertising revenues, after all. According to many sources, Virgin.net

has built up a more than decent customer relationship marketing

operation. As another observer puts it: "I think Virgin has always

believed that the internet service provider business is the safest way

to monetise the internet."



Which is a perennial problem, after all. Rob Norman, the chief executive

of Outrider, comments: "It's always been philosophically interesting

whether people you trust to do one thing can be trusted to do another.

Would you, for instance, like getting British Gas in to do your cooking

for you? Does Virgin want to be a telecoms company or not? Does it know

itself? Or does it want to be a content provider? I think it's a big

mistake to confuse the two - they are very different businesses."



Richard Wheaton, a managing partner at Carat Interactive, would agree

that Virgin.net hasn't ever really lived up to expectations as a

portal.



He states: "It has never really been edgy or challenging. It's a

difficult market because the leading portals don't rest on their laurels

and many of them have time-sensitive material that Virgin just doesn't

have. If you look at Lycos, for instance, which has been doing really

well in the UK especially, it has been developing fantastic services,

for instance mobile and SMS products."



But surely what Virgin.net does offer are some pretty healthy

numbers?



True, but that's not the point - and perhaps that's something Virgin.net

hasn't taken on board. In other words, the internet service provider

initiative is increasingly crucial to Virgin's online efforts. But as

for Virgin.net - the verdict is: "Could do better." It may boast some

decent traffic figures, but advertisers aren't always impressed by

that.



As Wheaton explains: "We have had lots of success with Ask Jeeves

because, by and large, mindset is an important factor. It helps if you

know what sort of mindset people are in when they visit a site. It's

something you can plan against. Advertisers are generally more

interested in that than in a broad and rather vague proposition."



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