Ad-Tech Chicago
The Next Generation of Community/Content Organizers - Gateway to Mass Consumers and eCommerce
May 1998

"The Search Engine Super-Panel"
Hear the "Search Engine Super-Panel" discuss the Future of the Internet as originally broadcast on CNET Radio (May 6, 1998)... click here Download Real Player
Panelists include: George Bell, Excite; Robert Davis, Lycos; Robert Hult, Alta Vista; Tim Koogle, Yahoo!; Harry Motro, Infoseek; Beth Vanderslice, Hotbot

INTRODUCTION

VISION
When  we started  Yahoo, we had six people  and we were all crampted into a 1000  square foot office with a leaky roof, and we were all sitting around trying to map out what we wanted to accomplish.

We want to be the only  place in the world where  anyone would have to come
to find or get connected to anything or anybody.

This is what  I call our elevator speech.  If you are riding between floors and your getting off a the next floor, and an prospective  customer or partner  says "I am getting off  in one floor ell me what your business is all about."

We believe this is a very strong, very large, stand alone  business.  We are in this for the long term and this is what we are building for.

CURRENT STATE OF ART

Exponential Growth

What we have is a tremendous  amount of activity on the Web, it is growing and it is beginning to aggregate  across some very large sites.   The  Web is not a particularly well organized place and we do not see that changing.  We see a huge growing audience coming onto the web, getting more and more  involved in the Web. We see people building the web, consumers, merchant services, merchant partners, communication partners, and that is not going to change.  Increasingly the  Web is being  weaved in the fabric of everyday life.

The market both in eyeball s and dollars now in the future will be large  enough to support several  large global search and navigation services, with different brands, different offering, we will appear to different segments of the market. If we look at the history of main stream media there are lots of historical examples  of where this is true and I think that will be true in this space.

Hubs, gateways, portals, whatever you call  it we provide  an invaluable,  core, and very sustainable function on this thing called the Internet.  The Internet which is a very large exponentially growing set of content and servant merchant  communication  functions  that is connected globally  but organizationally   disconnected, helping  people get connected to stuff .  That this large cloud of stuff is morphing and growing is very core.  This is core and it is not going away.  We act  as distribution  sources for lots of content companies, merchant partners, communication  partners.  We set out to build this core functionality and we have done so.

The difference between the PC revolution and the Internet  revolution is that the Internet  revolution is going to move much faster and create  bigger companies.

People are coming online more frequently, they are staying online longer, their sessions are longer and the growing trend is toward increased consumption.  Taken in the aggregate we are seeing 60 million people on a world wide basis coming online, and we are increasing seeing normal distributions  in terms of consumption patterns.

This is real, this is big, and if companies do not get their hands wrapped around it they are going to miss a sizable opportunity.  Out biggest challenges will be how we can reach audiences cost effectively, and how to  deliver value to advertisers and merchant partners.


TRENDS
EMERGENCE - NEW PLAYERS

You can point to countless  examples  of when an existing industry was supplanted by a new industry , which is founded by names  of people  they  had never heard of, which had no baggage;  and that same thing is underware here.  We  can co-exist with existing media countries.  I believe in partnership  and alliance.  But a wise old man once told me "young man "greed is good" and "Darwin was right."    Darwin was right, it is a fact of economic life that new companies  and enterprises spring up with no baggage and create entirely new industries and that is what we are doing.

TREND - CONTEXT INTEGRATION

Increasingly we are seeing the effect of context  and integration.  A person who starts out as a sports user can become loyal to the stock page.  The possibility of moving users long the value chain to other parts of the service is high.

We furnish a high quality  user experience  by furnishing a context where there is linkage, and these linkages are not always intuitive.  For example, the stock page  becomes a promising place to prospect for customers to go into a chat room to discuss investment opportunities.  It is our experience that context integration  has been phenomenally growth -oriented.  

We need to exploit the possibility of serendipitous  linkages.  No one really knows what they are looking for when on the Web, they  bump into it, these serendipitous  linkages are important.  When you look at someone¹s online behavior  patterns you could not predicted an hour ago what path they might follow during a particular online session.  The Web facilitates a sense of discovery and fruitful exploration.

TREND - CONVERGENCE

You are kidding yourself if you ultimately do not see convergence.  So I think what everyone  is doing is putting as much value in their company as possible, so they can be stand alone  company, or inside another  company, or partnering with another  country that is how business works, wo welcome to capitalism.

TREND - Wireless

We are appliance bound.  At present you have to be a "geekoid" to load Unix on your laptop in order to check email.   This environment is going to go away within just a few years .  We are going  to see the emergence   of new appliance.  We will enter an era of ubiquitous  computing.  The wires will be gone, it will be a very different environment and this is what is going to change  the attitude of the very large media companies,, no longer can  you keep your head in the sand, you can¹t get out of the way anymore.

STRATEGY

We believe that strategy should flow from the interaction of content, technology, audience, and brand.

Our goal is to expose  our site to the maximum number of visitors, increase the number of page views per visits, which is very inexpensive advertising.  These are the imperatives of the category right now.  The word of mouth, or the word of mouse makes a critical different.  We have seen this first hand with the Tripod service.   Tripod invites users to build a personal home page and become part of a community.  The tremendous growth of tripod has been entirely world of mouth.  There has been a range of different cyberbrands where word of mouth has been of tremendous value..

There are two types of applications. Viral and sticky. Sticky applications are personal and develop  user loyalty over time.  Viral applications are spreading word of mouth, everyone is telling everyone else about it.

Strategy - Branding

Brand is one of the top assets, right up their with content, technology, and audience.  Brand is important.  One of the great opportunities on the Web is the possibility of creating new brands.

Brands if they reasonably stand for something in the mind of the consumers. Its a crowded world.  The only thing that makes things pop us and stick with you in brand allegiance.   A lot of credibility and a lot of trust has to go behind the brand, which only get delivered over the long haul and over a really consistent period of time.

This is a space where anyone can go out and build a brand.  It probably take a little longer now and is a little more expensive than it used to be, time and money are becoming barriers to entry, but it is still possible.

Branding is very different in this space.  This is the ultimate word of mouth medium. From example, Yahoo and Amazon were pretty well known brands before the first dollars was spend on marketing in the traditional sense, this is a powerful word of mouth medium.

Which speaks to the issue of user experience as being the key underpinning to value underlying the brand.  I would echo what Tim says, we would not to get smug or convince ourselves that the brand loyalty is very deep at this point.  It is still very early, marketing shares still shift very dramatically.


Strategy - Success Depends  On Being Customer-Centric

It is all about our customers.  We have to think of our users. We have to give them something of value, something they think is interesting.

Content should not serve advertisers but should serve a loyal customer based which than creates  business opportunities behind them.

Audience aggregation  that  is not  customer-centered, that   does  not have the ability to produce  a revenue  model  has no future as a media company.  You have  to serve the user first.

One must  build their business  and their  brand around the user experience, that has to be unique and that is where we our putting our focus.  It is not  content per se, it is user experience which is key.  We are content aggregators, just like CNN started with hard news and build around it, we started with search and are building layers around it to attract a loyal audience.  Our fundamental  mission is the user experience.

We need to try and reach down vertically. For example, woman are on the fastest growing demographic on the Web, and we are partnering with Iworld to create the women¹s channel, not that woman don¹t go to other parts of our service, but we think going vertical is one of the keys to enhancing  the quality  of user experience.

Strategy - Differentiation

We must differentiate.  Some of us may  focus on search, some are aggregating context, some are furnishing content, some are trying to leverage  technology.


Strategy - Building A Place Which  Attracts  Loyal Habitual Users

It not about search engines.  A helpful analogy is o think about building a house.  Search and navigation is the foundation.  They key will be how to build layers or floor on the house without losing the consumer.  The challenges is to how to build the house without losing the consumer.

The current bath is to go and buy five different companies, five different houses, and they do not share the same  plumbing, the same electrical system, and the consumer has to go place to place and they get rained on in between.

We want to build the ultimate five story house, we are delivery a lot of product services, a lot of engineering  resources, in order to create an INTEGRATE EXPERIENCE for the user.  We want to delivery a holistic experience which is meaningful from the standpoint of the consumer.

Traditional  media  companies  has been driver and concerned with  content.   Good media companies furnish good  content with attracts  loyal  audiences  and following those audiences  advertisers follow.


Strategy - Partnering with Commerce Partners

When partnering with commerce partners which is the most important parameter, the quality of the content or the ability to pay CPM?  We are most concerned with the degree to which the commerce  partners really has tools and services which are going to be highly valued by a broad audience.  Our primary objective is always to create a win-win deal for both us and our partners.


Strategy - Innovation

If you want to build a real kewl house  which attracts  loyal users, you need to overwhelming commitment   to product  innovation.  At InfoSeek, we have a group called  Kirschworks, lead by our co-founder  Steve Kursch and this is our risky products  development  group.  One of our secret  weapons is Steve Kirsch, who founded our company as well as other  companies.  Our goal is o develop new products that will set us apart from out competition.  Some of these R and D groups are the core business of some companies in the areas of Internet  marketing and advertising


CHALLENGES/OPPORTUNITIES

MEASUREMENT

One of the major  challenges  for the future is assessment.  We are seeing the emergence of third party  vendors developing  metrics to measure  online  behavior.

INTERNATIONAL

An important  challenge is international.   In 3 to 5  international  may be bigger than domestic.  We are  investing heavy in it.   We have just  formed a partnership in German with the leading Internet Service Provider.   I imagine that in the next few years, the international al, non-American audience will exceed  the number of North American users in terms of consumption  patterns.

In the international  arena we see two trends:1) growth of the global audience; and  2) growth of global  content.   As present 1/3 of our total page views are  coming from international  audiences, at present the non-American  audience is growing faster than what we see domestically., but the growth rate are off a much smaller base so that is something to keep in mind.

Yahoo has been launching  all over the world.  We see this trend continuing.  This growth will be fureld by a number of other factors such as the declining costs of personal computers, lower online costs, and deregulation  of the telecommunications   around the world, all of which have driven greater  up take of the online  experience.

Many  cultures are not as television addicted as our own culture which also facilitates increasing Internet  usage.  For example, Japan is still pretty much a print-based culture and has  weaker  television presence.

Media  companies   have made the mistake of thinking globally but not acting  locally.   When you export your product or service you have to localize .  One must  create joint ventures and form strategic  alliances.  It is your partners  at the local  level which are going to create  the distribution  relationships, the media  relationships, the advertiser relationships.  We give up portions of our companies  to partners in exchange for developing  these  relationships.

We  have focused on aligning  Lycos with Bertelsmann, Europe¹s largest media company.  We are also exploring strategic partnerships throughout    Korea,  Asia, and Japan.  The patterns has been that  local  partners  take our services and apply the local culture to it.  Translating the service is easy, but adapting content to the local cultural context is the real strategy.  And this is where a local organization provides  tremendous value and possibilities for enriching the consumers  experience.

We did the same in launching Hot Boot in Japan.  We  licensed  our product to NNT.  They sent their people to  Wired Digital to  learn the about the nature and function of our core business.  But  they  interject their  heir local flavor and color when they returned to their country  and launched Hot Wired  Japan.   

THE FUTURE

Traditional  media  companies  are  going to be online, its not a zero sum game . There are going to be affinity portals (affiliation brands).  We continue to more opportunities for users to affiliate with affinity portals.