Re: The Value of NBCi (was GoTo Policy Change)

From: Mike Golby <mikeg_at_laragh.co.za>
Date: Thu 12 Apr 2001 10:18:22 -0600

MICHAEL MARTINEZ WROTE:

>Given today's industry, my money is on Yahoo! + Google,
>AOL/DMOZ + Inktomi, and either MSN or NBCi. Lycos is out
>there, but they aren't exactly chewing up the competition.
>I don't think Excite is going to do well in the long-run,
>either. And I just can't see Altavista hanging on to what
>they've got. Their market share is already eroding. But,
>ultimately, I like NBCi over MSN.

Newsbytes reports Mark Begor (NBC CFO) on NBC's
decision to buy up all NBCi stock and fold the portal
into its media operations following NBCi's failure to
leverage the media giant's online advertising and
advertising revenue network to its advantage: "NBCi
was built on that (advertising)," Begor told a
teleconference today, "And as that revenue model
collapsed, there really wasn't a business..." Staff
will be on the street, Daddy will be home somewhat
early, and there'll be fewer Easter eggs in the garden
come the weekend.

Traffick's Andrew Goodman called this one early in
March so I guess I'm not surprised to see it go
belly up. Goodman's many, varied, but eminently sane
and cogent arguments are lost in the plethora of
sideshow chats that makes the Traffick forums such
worthwhile and entertaining reading. So I won't repeat
them here. The upside to NBCi's demise, though, is that
it once and for all lays to rest the myth of a portal
surviving on ad revenue generated by affiliation to a
well-placed benefactor.

Ad revenue from a media giant, as Goodman pointed out,
amounts to only so much goodwill. It's a perennial
promise of more but, in the end, it doesn't deliver the
goods and the portal remains a money bleeder. Portals
have to develop sound business models and those that
are left are targeting content aggregation. MSN is in
there with a definite shout. It is in the portal business
and offers the end user the variety of services a
tack-on outfit like NBCi just could not match.

So, in the end, MSN wins out over NBCi. Looking at
longevity, the certainties must include Yahoo! and AOL,
with MSN and Lycos fighting it out. AV, as you point out,
is in for a rough ride and could start hemorrhaging at
any minute. The nut of it is that AOL and MSN have got
the goods, the bucks, and the clout and Yahoo! is an
addiction nobody can kick (besides offering better search
and deliverables than AOL). Who needs more in recessionary
climes? On the supply side, DMOZ is the one indispensable
distributed resource everybody loves to hate, Inktomi
is ever reliable (but not getting the financial results
it wants) and Google... well, yes, Google equates to
success in capitals. Oh, I forget. Excite. But then
they are just that, aren't they? Forgettable.

The point of all this is that rationalization of the
portals holds huge implications for PPCs thinking of
squeezing money from small advertisers. With their upstream
partners lying down and dying (viz. GoTo losing Go,
NBCi, and possibly AV), where on earth or the Web are
they going to put their $0.05 links?

Mike Golby
Laragh Courseware
Web: http://www.laragh.com
e-Learning Matters



Received on Thu Apr 12 2001 - 11:18:22 CDT