Internet Portals Leave Adolescence Behind

By now, you have probably realized that Yahoo! (Nasdaq: YHOO) is up to something.

Just this week, the company cut a deal withCigna (NYSE: CI), agreeing to build a custom portal for the health care heavyweight. Doesn’t sound like the zany, business-casual Yahoo! we’ve grown to love, does it?

Last month, Yahoo! hip-checked out ofthe bidding warfor, with a hostile US$436 million offer.

In his six months at the portal’s helm, Yahoo! CEO Terry Semelhas aspired to just one goal: profitability. Yahoo’srecent dealings signify a distinct culture shift, notonly within the company, but in the Web portal space.

So portal devotees beware. The days of freeinformation and services for all may be over soon.

Grab Bag

To date, portals like Yahoo! and Microsoft’s MSN haveoffered a little bit of everything. And I mean everything. Crammed onto their home pages are bits of news,directories, online shopping, games and otherofferings.

Until recently, portals fed their top lines with steady streams of advertising dollars. After the online advertising market faltered, executives like Semel were forced to ferret out new ways to bring in the dollars.

Building Bridges

I don’t blame Yahoo! in the least. With the advertising market on a slow comeback and an industry-wide mandate for profitability, Semel is trying to bring Yahoo! out of adolescence into adulthood.

On top of the Cigna and HotJobs deals, Semel is eyeingthe Internet service provider arena. Jointly with SBCCommunications (NYSE: SBC), Yahoo! will offerco-branded high-speed Internet access to SBC’s 3.6million subscribers by mid-2002.

For its part, MSN has entered into a promotional dealwith automaker Volvo. Similarly, AOL Time Warner(NYSE: AOL) has agreed to market Unilever (NYSE: UL)products online and on television.

Sharper Image

So, what do these new revenue strategies mean forloyal portal users? We should count on a small upsideand potentially a big downside.

First, the good news. The inch-deep and mile-widedilemma faced by most portals is likely to go away.

Rather than serving up a little bit of everything,portals will begin to deepen and taper their offerings.

Powerful Packages

Further, Web development deals — like those Yahoo!struck with Cigna and Sony — will bringscalable Internet expertise to the brick-and-mortarcompanies on which we all rely.

Re-packaged technology from Yahoo! and other portals,which has graduated through many development cyclescan only help the product and service offerings of oldeconomy companies.

And as end-users, we ultimately will benefit.

Location, Location, Paid-For Location

Now, the bad news. Remember how Yahoo! and otherportals went to market? Exhaustive directories ofvital Web sites, sometimes hand-combed by humaneditors, drew droves of needy surfers.

With content becoming more closely tied to revenue,the neutrality and accessibility of portal-hostedinformation will suffer.

For instance, Yahoo! plans to deploy a sales force tosell directory listings. As did rivals MSN and AOL,Yahoo! already partnered withOverture (Nasdaq: OVER), which sells search engine prominence.

Looking for information on vacation venues or businessschools? Soon enough, all of the portals will answer inquirieslike these with sponsored information first andtopically relevant information second.

Paying Dues

What’s more, content and services we’ve enjoyed at nocost will soon carry fees. Have you come to rely onyour Yahoo! e-mail account? Don’t flinch if thisservice requires a subscription by year’s end.

Indeed, Semel has announced to the press his plans tocharge users for access to premium news, sports,music and other content.

Growing Pains

We may feel like mounting a protest, in the name ofsome constitutional right to information. But inreality, the novelty of the Web is officially gone,and with it goes the free passes we’ve enjoyed.

As evidenced in the portal space, Web businesses arestarting to bow to the same financial constraints asthose in the physical world.

I suppose we all knew it was coming. But we can stillgripe about it.

What do you think? Let’s talk about it?

Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.

1 Comment

  • Yesterday’s harsh reality that today’s netchist (anarchy) failed to see. Today we saw VIVENDI buy a movie studio, yesterday it was Warner and CNN being taken over by AOL. What all these business transactions mean is that Internet companies are buying content-rich business — both text, audio and visual. By the time broadband is well established, this medium will become the most all-encompassing pastime of today’s Twenty-something. I believe that diversity will suffer on the internet but then this will decongest the net of all sorts of trash that cannot pay for the more expensive infrastructure nor sustain itself by offering a commercial service. There is no point in grieving, it is sign of the times.

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