Convergence, Consolidation, Fast-Changing Industries.
Most industries go through a fairly predictable evolutionary cycle: a period of build-up, growth in number of players, increasing competition, improved productivity and pricing adjustments, consolidation to a smaller number of bigger players, possible break-up of some large players, and then either additional growth of niche and vertical market players or some sideways convergence with a related industry. The Web has served to speed up the process, and is itself a complicated example of industry change.
At first there were a handful of good sites we knew and used for access to Web content-Yahoo!, AltaVista, WebCrawler. New search engines and tools arose to meet new needs and challenges, and existing sites improved. Things changed faster than most of us could follow. Some of us used to think America Online would never amount to much-and now wish we owned its stock. But recently we have been experiencing the real upheaval in the industry, as Internet stocks have become the darlings of Wall Street, search engines have morphed into portals, print and broadcast media have gotten involved, and mergers and buyouts are hitting fast and furious.
Dividing lines are now not so clear. Traditional online information providers and services have turned to the Web. New services have arisen that have one foot in the information industry and another foot in the Web search engine industry. Web search engines have grown to provide increasing amounts of information and content. Even consumer and business market lines are blurry. The Web has become a caldron, blending connectivity, content, commerce, and community. In fact, the question is, what industry are we talking about? The online information industry? Internet search services? E-commerce? Online communities? Entertainment? New media networks? Ahhh, that last one is interesting. Lycos is now calling itself a "Web media company."
And, we're beginning to see some interesting combinations of kinds of companies. Just recently, we've seen announcements of these mergers and buyouts: America Online and Netscape, Lycos and HotBot, Disney and Infoseek (plus partnering with ABC and ESPN), @Home (and, AT&T is acquiring TCI, a major stockholder of @Home) and Excite, and Yahoo! and GeoCities. Whew! It's hard to keep track.
What does this mean for the future of Web searching and our industry--whatever industry name we choose to use? Are these companies all going to merge into new media conglomerates? Will dominance of these mega-media Web companies actually foster more divergent growth opportunities for commercial vertical Web-solution providers? We've asked some industry folks to give us their thoughts on these recent developments. Here are their comments. Readers are invited to send in their own reactions and reflections, and we'll publish some of the best. Please send them to me, Paula J. Hane, contributing editor, Information Today, firstname.lastname@example.org.
As I was putting these comments together for publication, I received news of another mega-merger. USA Networks is proposing to buy Lycos and merge it with its cable television Home Shopping Network--and Ticketmaster is in the mix as well. Looks like entertainment and new media attached to e-commerce is the ticket for portals these days; information seems to be taking a back seat--at least in the news. I thought the description in The Industry Standard's Media Grok was quite appropriate (http://www.thestandard.com): "In this warp-speed game of Net-consolidation musical chairs, you never know who might end up in your lap."
A Reflection on the Future of Web Searching
C. David Seuss
CEO, Northern Light Technology, LLC
The recent announcement of @Home's acquisition of Excite made me think about how quickly this industry is changing. Excite was once a search engine, like Northern Light still is. They went on to become a portal, and now they are under the wing of one of the Internet's growing cadre of media elite hopefuls. This trend towards consolidation on the Internet concerns me. It also reminds me of an earlier phase of media development.
Years ago, when TV first hit the airwaves, there were dozens of small, independent broadcasters around the country. Over time, those independents were absorbed into the major networks until even the few independent UHF channels have become fiefdoms in someone else's larger media empire. This resulted in a uniformity and general decline in the quality of broadcast TV, none of which benefited the consumer. The advent of cable has led to an expansion of niche broadcasting--outlets like ESPN, CNN, The History Channel, Nickelodeon, and the Weather Channel all serve specific communities, and in most cases serve them better than the big networks.
Interestingly, although we have TV to look to in terms of a development model, the Internet seems bent on repeating the errors of TV by moving towards more homogenized content and services. Putting everything into the hands of a few big media companies that blandly copy each others' moves seems like a ticket to the same show big media companies have been giving us for years. We watch it when nothing better or more useful is on the niche channels that focus and innovate, but that doesn't mean we like it.
And so Excite has moved into the @Home camp. They have completed the journey from a useful broad-based search service trying to cover the whole Web to a cog in someone else's media company with the strategic imperative of serving the needs of the corporate parent. I wish them luck.
At Northern Light, we are going to maintain our focus on search, and continue to do it well. We will not rely primarily on ad dollars as a source of revenue or on keeping people on our site longer than necessary in order to show them more ads. Instead, we will continue to take searching seriously by providing the business user as well as the intelligent consumer with the highest quality online information. In these chaotic days of "new media networks," I guess you can think of Northern Light as analogous to a highly focused cable channel--doing one thing very well for people who really care about and need that one thing.
The Web Keeps Pressure on the Information Business
Director of the library at Frederick, Maryland
The recent turmoil of the Internet is an effect, rather than a cause. It's the result of the emergence of the Internet as a genuine mass medium. (Estimates are as high as 100 million users in the U.S. alone.) The convergence and promotion of several technologies has made it possible for people to do almost anything online effortlessly, from old-time applications like email to completely new and unforeseen ones like creating and sending your own digital greeting cards.
In this giant, new mass medium, there is great deal of money at stake. The race for it is driving the hypervalued stocks, the sudden mergers, and the entrance of the world's largest media companies. Today's turmoil is just the start of an upward spiral. As more people participate, more businesses will step in with more applications and uses, which will attract more people, etc. There's no telling where it will stop.
I'll predict that the uses with the greatest upside potential are those involving person-to-person communications, or in Internet lingo, "communities." I think the Internet will reprise the experience of consumer online, in which communications activities such as e-mail, chat rooms, and forums held the greatest appeal. Thus, among all the recent deals, Yahoo!'s purchase of GeoCities, a leading communities service, is the most telling. The others are more conventional consolidation events.
Where does this leave the information industry and the information profession? Fairly well-positioned actually, but only for the most nimble. Information producers and distributors are "recovering" their traditional markets. The novelty of the Web as an information retrieval tool has faded, and the corporate, professional, and academic organizations that require extensive, coherent data are reaffirming the values of their traditional suppliers. Nevertheless, the competition in this arena may be tougher now than it has ever been.
In the mass market, it has always been hard to sell information, and the typical consumer seems satisfied with the free but erratic information that abounds on the Web. As the mass market character of the Web grows, the weight of recognizable, comfortable brand names increases accordingly. This puts little-known information companies at an even greater disadvantage. Their best chance for success here may lie in partnering with the household names, but this will be accomplished only by the most flexible and innovative companies.
Librarians and other information professionals are also well-positioned, since their expertise is needed now more than ever. People are recognizing that the Web increases, rather than simplifies, the complexity of their information environment, and they welcome experts who will help them deal with the challenge as they face it. However, this places relentless pressure on information professionals to upgrade their skills, and to extend them continually into new areas.
So, all of us in the information business will do quite well--as long as we work and change at Web speed.
Reaching the Next 50 Million
Chairman, Infoseek Corporation
Some time ago the label of "visionary" was bestowed upon me, perhaps less for my profound insights on technologies of the future and more for the success I have stumbled upon by getting into booming markets early. One of my more profound moments in the visionary role was when I smartly predicted that the Infoseek business model would be "widely imitated." I was right, of course, but to be perfectly honest, at the time I was talking about the 10-cents-per-search query model we were using then, not the advertising-supported service we pioneered soon after.
No, my visionary aptitude lies in knowing how to apply new technologies to address emerging needs. As a "visionary," I could wax eloquent about an Orwellian future where the few computer peripherals still needed--scanners, digital cameras, and audio recorders--plug directly into the walls of your house with terminals behind a paper-thin screen in every room. That might be, but I am more interested in defining the industry by getting the next 50 million users onto the Internet, and their needs are different than were the needs of the first 50 million.
The first 50 million Internet explorers would put up with the complexities of getting around that vast space, but the next 50 million will not be the early adopters their predecessors were. First, they will demand simplicity in their Internet access devices. Then they will expect their Internet service to actually work--easily--every time. They will be influenced by, and look for, content and brands they are familiar with in the off-line world, such as TV, radio, movies, and print.
Why would technology be so important to this simplicity-seeking crowd? The two largest Internet sites today de-emphasize original content and technology, treating content as a commodity and licensing technologies, such as search engines, rather than investing in them. But to make things that are increasingly complex and difficult to maintain appear to be simple, reliable, and easy to use requires great technology. Developing an intuitive, seamless experience that connects easily and directly with people's daily lives will be key to winning over the next 50 million users. This will require a level of integration of tools, services, and content that does not exist today. This can only be achieved through great design and engineering. A simple example of such an integration is a time-sensitive site that highlights stock, traffic, and breaking news on weekday mornings, but, come Thursdays, offers 3-day weather forecasts and tailored local sports and entertainment reminders for the weekend.
Search will be central to this integration and will be woven into the user's daily Internet activity rather than experienced as a stand-alone service. For example, a search tool will be embedded in a local entertainment guide that allows a user to quickly and easily see if their favorite band is performing in a 50-mile radius in the next 30 days. Once they know when the band is playing, they will want to find the latest reviews of the band's live show as reported in their favorite entertainment magazine or TV shows. They will want to buy tickets, get directions to the venue, buy the group's latest CD, and e-mail their friends to tell them they have tickets, all in one simple integrated experience. That does not work the way it should today, and it will take well-designed technologies to make it a simple reality.
This is the flavor of things to come--not in the Internet house of the future, but in the era that must precede its arrival. I believe it is inevitable because users will demand it, and, for now at least, there is no single monopolistic force controlling or limiting the rate of innovation.
Say It Isn't So
I've been watching Internet search services since before the Lycos spider first crawled across the screen (remember Archie, gopher, VERONICA, and WAIS?). Each search engine has gone through astounding changes in very brief periods of time. At first we laughed at them for not understanding how people search. They learned. They added new features. They searched more pages. They changed their search algorithms to improve retrieval and confound spammers. They improved their interfaces and added information handling tools. These companies are flexible and adaptable. They are not afraid to experiment.
For years, we have worried that Web search engine companies were unstable, that their commercial advertising-supported model would collapse. Recent months have seen these threats of instability replaced by threats of too much commercial emphasis. Large media company pairings, such as the Disney Company with Infoseek, @home with Excite, and, most recently, the proposed merger of USA Networks with Lycos, may affect how and if we can continue to search effectively for information on the Internet. Or, perhaps not. All of these companies can use deeper pockets behind them, if those deep pockets are committed to improving search effectiveness. That is the unknown. Research costs money. It also requires the willingness to take risks and to be wrong.
The question is, will fame and fortune ruin their capacity for innovation? That depends on why they have all been snapped up. If they are allowed to pursue their experiments and their quest for improved retrieval tools, then extra funding will help them concentrate on that task. If they are to be used as cash cows, then probably they will start playing it safe. They may cater to investors, or sell the right to be listed in the top 10 sites retrieved. The best of all possible worlds would be for the new parent companies to understand that developing more effective information tools will enable them to improve access to their other online products and commercial sites. Will the bottom line rule? If it does, then the end of the great information experiment is at hand.
The past Web years have spurred a tremendous growth in research and innovation in information retrieval. Millions of queries have created a vast pool of real user data. Theories have become products. The search engine companies have responded by inventing a spate of new tools and products. We know so little about how people seek information. We are only beginning to differentiate among users and among information needs. Once we know these a bit better, it is possible that useful niches could be developed for each kind of information need. Rather than being all things to all people, a search engine could be terrific at finding products or technical reports, or pictures, or news, or stock quotations, or entertainment tidbits. We don't know enough yet to even define these niches.
From the information professional's point of view, Internet searching has been a poor cousin to traditional searching since its inception. Not because the information isn't there, but because there is currently no efficient way to search for information on the Internet. Current Web searching frustrates us. We do not know what is being searched. We can't rely on the content we find for its veracity and value. No efficient means exist for snatching and reviewing multiple sources in one fell swoop. Time is a real stumbling block. What we want, ideally, are the graphics and the price of the Web combined with the speed and content of our traditional online service providers.
This has been a pretty confusing time for those of us who knew our way around the online industry. We could quote you who had what information, and how much it cost us yesterday, and whether the latest search commands were worth bothering with. Those days are gone, and we are all floundering in information chaos. What Web search engine works better this week? Which one searches what and how well? And, for heaven's sake, how do they work and how can we fine-tune or even coarse-tune our searching skills on the Internet?
While the Web has lacked assurance of quality or even a list of its contents, it has caused a revolution in our ranks. We are no longer the guardians of the information treasure trove. We don't need to yell about its value from the rooftops. Our users know. Instead, we are trying to create good access systems. We are making treasure maps.
If David Seuss is right [in his comments above], and commercial pressures force the Web search companies to start playing it safe and conservative, we will have lost a brief opportunity to find out enough about the information-seeking process so that we can create systems that work well. This last year has seen a move to more sophisticated approaches by all the search companies. Their influence is apparent in all sectors of the online industry as well. Every information service, traditional or Web, now has a Web interface. It is possible to do a search without learning the secret handshake or mortgaging your house. If this impetus for change and innovation becomes instead a retreat toward information pap, we will have missed the chance to do it right.
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|Author:||Hane, Paula J.|
|Article Type:||Industry Overview|
|Date:||Mar 1, 1999|
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