Billboard economy

If you’re in New York for Fall Internet World this week, don’t miss my presentation, “The Web in 2004: What Won’t Be,” Friday at 10:00am. Find out the real future of the Net’s biggest myths: online advertising, digital Darwinism, broadband speed, and online customer service.


Judging by the amount of mail I received in its wake, my recent column on DEEP-LINKING restrictions was one of my most popular columns ever [1]. I was amazed that so many people felt so passionately about what at first glance seems to be the obscure collision of an emerging technology with legalistic mumbo jumbo. Who woulda thunk it?

Based on the response, Ticketmaster may be one of the most unpopular companies ever to post a page of HTML. The consensus seemed to be that companies are A) stupid to restrict direct links to pages deep within their sites, and B) even stupider to try enforcing those restrictions through legal rather than technical channels.

After all, many readers pointed out that it would be very simple for Ticketmaster to add a small bit of JavaScript, Perl, or ASP code to their pages that checked where each visitor was coming from. If the visitor was following a link from an external site that’s not on the list of approved partners, simply redirect them to the Ticketmaster home page. Piece o’ cake.

That being the case, I look forward to weeks, if not months, of furious backlash against Ebay for their policy restricting search engines’ access to auction items. Ebay has been threatening legal action against Net startup AuctionWatch, which is an auction search engine that combines listings from Ebay as well as other auction sites [2,3].

I should point out, however, that the legal issues regarding deep linking are far from cut-and-dried. There simply is no clear precedent, yet. And, given the intimidation factor of being threatened with court action by behemoths like Ticketmaster and Ebay, I don’t expect there to be a clear legal precedent any time soon. Most companies, faced with the prospect of a long, costly legal battle with a well-funded opponent, will simply choose to back down, or to settle out of court.

[1] Ticketmaster: You’d better put down that Web link or we’ll sue you

[2] AuctionWatch nips at eBay’s heels

[3] Deep linking: Service or stealing?


The U.S. Congress is making another play at putting a global Internet TAX BAN on the table. This time, Senators Ron Wyden and Patrick Leahy, along with Rep. Christopher Cox, are urging the White House to press for a global Net tax moratorium at this month’s meeting of the World Trade Organization in Seattle [4].

Good call — the WTO approved a one-year Internet tax ban last year, which is significantly shorter than the U.S.’s three-year moratorium, passed one year ago. If nothing else, we need more time. The infrastructure for taxing Internet transactions fairly and reliably just isn’t there yet — and there’s far from being any consensus about what to tax, and how much, and who gets the tax revenues.

A permanent Internet tax ban is bad government — it will lock out too big a sector of the economy from what, in the future, might be perfectly justifiable taxation. But to let city, county, state, and federal governments start taxing the Internet right now would spell the end of internationally competitive e-commerce in the U.S. — or any other country that followed such a course.

[4] U.S. legislators push for global net tax ban


Now that it’s built online anchor stores for selling books, music, movies, electronics, and gifts, only one thing remained for Amazon.com to do in order to become a true MEGA-CYBER-MALL: Invite in thousands of small merchants to set up shop. And that’s just what it did last week, with the introduction of Amazon zShops [5,6,7]. For about $10 a month, any retailer can set up shop on Amazon.com. Amazon supplies its excellent order-processing and transaction-processing infrastructure — and, of course, the foot traffic.

Sure, it makes sense, if you’ve got a mall mentality. But other huge sites, notably Yahoo, also offer online malls with similar models. (Yahoo’s merchant offering, Yahoo Store, costs $100/month.) Yahoo even boasts thousands of merchants and millions of products for sale.

Big deal. How much revenue do you think all of Yahoo’s stores are generating, taken together? My guess is that it’s a fraction of Yahoo’s overall revenue.

The reason is that the mall concept doesn’t really work online. It’s been tried many times, to be sure: MCI and IBM both had online mall concepts that fell flat around 1995. Offline malls are convenient because they bring a bunch of stores together in one place — and that’s a moot point on the Internet, where, as online marketers are fond of saying, every store is just a click away.

But Jeff Bezos is smart. He knows online malls don’t work. His goal is to build an online *superstore*, where Amazon sells anything and everything you might need.

The zShops move is a quick, inexpensive way to round out the product offerings on Amazon.com, to attract even more customers, to do some market research into what other kinds of stuff sells online, and to get everyone thinking of Amazon.com as the place to go to buy anything at all. But it’s not going to take the place of Amazon’s own product category expansions.

I pity the zShops merchants who are doing a fine business selling, say, sporting goods — only to watch Amazon open up a sporting goods department of its own, once the market has been proven.

To the zShops merchants, I have just one word of warning: Seller, beware.

[5] Amazon Asks: Why Shop Anywhere Else?

[6] Amazon tries on hosting hat

[7] Amazon to Remake Itself Into a Bazaar on the Internet
(Free registration required to access site.)


NET PROPHET: Online advertising: a $3 billion industry limping on its last legs
from the October 4, 1999 issue of InfoWorld

ONLINE advertising is dead. This week’s Fall Internet World trade show in New York is as good a time as any to skewer the mythology of online advertising. That’s just what I’ll be doing (among other things) in my Oct. 8 Internet World presentation, titled “The Web in 2004: What Won’t Be.” … click for more …


~ Back issues ~

More than markets: GIF going, going, gone?; SDMI infighting and clueless record companies; how the Net makes demographics moot (9.27.1999).

Search smarts: Fairmarket leads auction sites to gang up on EBay; GuruNet; Web search relief ahead (9.20.1999).

Can ICANN? Quality of service on the Internet; RosettaNet not international enough; Roger Schank on interactive online education; time to replace ICANN? (9.13.1999).

Billboard economy