NEW MEDIA: Spotlight on - Vizzavi. Do Vizzavi changes blaze a trail for the 'second internet age'? Will job cuts and a rejigged business plan turn Vizzavi round? Alasdair Reid asks

Vizzavi, according to its head honcho, Jean-Marie Messier, in a

pronouncement made last year, was going to be a sure-fire hit because it

was "the first portal of the second internet age". Quite, Jean-Marie,


Experienced internet watchers tend to become nervous when they hear

techno-babble such as this because they have learned to associate

techno-babble with trouble. You could, of course, argue that Messier,

the chairman of one of Vizzavi's backers, the massive French media owner

Vivendi Universal, was mistranslated. On the other hand, trouble was

exactly what Vizzavi got.

Launched in September 2000, the portal, according to many observers,

lost its way before it had a chance to find it in the first place. Its

content could have been better and though its customer base grew

steadily its business model was seriously flawed. Losses grew almost as

steadily as its customer base (now 6.3 million) - and to date it is

estimated that Vizzavi has cost its backers a cool £320


Last week, its investors finally decided to act - and did so in a way

that indicates they have every intention of making this work. There's

plenty of pain, obviously - Evan Newmark, who has been the chief

executive since the pre-launch period, steps down, and there will be a

total of 100 jobs lost. The new chief executive will be Guy Laurence,

previously its head of marketing. Crucially, he will implement a

rejigged business plan which will see Vizzavi keeping most of the

revenue that it generates from premium services rather than passing them

on to its shareholders.

Will it work? Is the new plan any sounder? And what about Messier's

"second internet age"? This second age is clearly something to do with

mobile and wireless technologies - and it sort of makes sense if you

subscribe to the view that mobile is about to supersede a first internet

age which was all about websites being delivered to personal computers

via fixed land lines. However, detractors suggets that the market cannot

be compartmentalised in that way.

Vizzavi was launched primarily as a portal serving mobile operators -

mainly because its other backer is Vodafone. And somewhere in the

business plan there is undoubtedly some sort of notion of a captive

audience - Vizzavi is, for instance, the default service for all

Vodafone customers.

The sternest critics of Vizzavi tend to argue that its thinking was

critically flawed in many respects. For instance, it focused on the

delivery system first and content second. And according to some sources,

the people who wielded real power at Vizzavi were all rather stolid

management consultants and the sorts of advisory executives that one

insider refers to rather tersely as "bankers".

David Muir, the managing director of Future Ogilvy, argues that this

rejig is long overdue: "You did hear the odd story about how it was run

and the people running it, but I'd also say that they set themselves a

big task. It's not easy to establish a portal of any sort and there are

maybe two or three that really count in the whole marketplace. It's a

lot easier to imagine a portal like Yahoo! doing something in wireless

than for someone to establish a multi-access portal from scratch. So

perhaps it was a case of putting the cart before the horse. The

brilliant move would have been to buy Yahoo!."

But Robert Horler, a managing partner of Carat Interactive, argues that

the encouraging aspect of this episode is that the sector seems to be

learning its lessons quickly. He adds: "Vizzavi knew it needed a refined

and focused strategy. When it launched it promised all sorts of


This is now based in reality. And it knows it needs a return on

investment in the short term because in this climate no-one will

bankroll a venture for months on end without a prospect of a profit. I

see this as encouraging because it's a sign of a market growing up."

Horler argues that the new model is viable. "It's now based on selling

the sorts of premium SMS services that people are clearly prepared to

pay for - chat, games, horoscopes. The functionality and the content are

both there. This gives them 12 months' breathing space in which to

prepare for the next generation of services. It's all moving in the

right direction."

Nigel Sheldon, a managing partner of mdigital, tends to agree: "It has

taken a while for people to adjust to the fact that WAP didn't deliver

and that texting is where all the growth is. But what's coming next?

It's a very complex and intricate market. I think we'll see all sorts of

new companies entering the market offering all sorts of new services. I

think, for instance, you can see why the mobile phone manufacturers

would want to become content providers. But I still think there's an

opportunity for Vizzavi to build a big brand. People forget how young

the whole internet market is and what Vizzavi has in its favour is that

it has already been around for a while. People are familiar with


But doesn't this whole episode merely illustrate the amount of hype

there is in the mobile market? And anyway, it's not a market that is of

huge interest to advertisers. Is it? Actually, it is, according to Muir.

He says: "It would be a mistake to conclude from all of this that

internet mobile has big problems. The fact is that we're seeing a huge

upsurge in terms of data usage and very positive signs about the way

people are using it.

"In some respects it's amazing the extent to which people are prepared

to pay for some of the services available. Advertisers may still be

using old-fashioned technology - basically SMS - but the point is that

they are using it and as the technology improves the scope for

advertisers will be much broader."


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