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Strategic alliances

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Strategic alliances Powered By Docstoc
					                  Presented by

                  Fabio Priori
                Miguel A. Sanjuan
                   Eric Sovish
               Sophie Wawrzyniak




May 10, 1999
                                                                Table of Content

EXECUTIVE SUMMARY .........................................................................................................................................2

MARKET ANALYSIS ................................................................................................................................................3

MARKETING ..............................................................................................................................................................7
   INITIAL CONSIDERATIONS ...........................................................................................................................................7
   MARKETING TACTICS FOR WEBPARTNER ..................................................................................................................8
STRATEGIC ALLIANCES ..................................................................................................................................... 12

WEBPARTNER’S OPTIONS .................................................................................................................................. 14
   ALTERNATIVES ......................................................................................................................................................... 16
APPENDIX 1 ............................................................................................................................................................. 19




                                                                                                                                                                          1
                                           Executive Summary1

Founded in June 1998, WebPartner provides web-based services to small and mid-sized e-
commerce businesses. The services consist of monitoring online store performance by alerting
the client per e-mail or pager notification if the site is not accessible, giving them an explicit
explanation of the failure, and providing a benchmark comparison against industry leading sites.
On March 4, 1999, WebPartner began its first service and now has several hundred registered
users.
WebPartner’s challenge is now to reach a goal of 100,000 registrants as quickly as possible in
order to build an attractive customer base. This will allow them to market their services on a
broader scale, obtain more bargaining power to partner with complementary websites, and
increase traffic. The second goal is to increase the conversion rate from free service registrants to
fee-based registrants, which should secure their main revenue stream (85% of revenue).
Our analysis covered the market potential, the marketing tools over the Internet, the strategic
alliances and partnering possibilities, and the services offered by Webpartner. All the statistics
gathered demonstrate the increasing number of small and mid-sized companies getting online
and doing business online. It is estimated that by the end of the year 2000 half of all US small
and medium companies will conduct business online in a way specific to the industry they are in.
Branding and advertising are imperative to the future of these companies and heavily reliant on
smart strategic partnering with complementary websites. Personal contacts to marketing
departments of well established companies constitute a main short-term strategy to access an
already broad and established customer base. However Internet-specific marketing channels
should be used to maximize the recognition and differentiation of WebPartner among Internet
monitoring companies. To this end, WebPartner should develop a distinctive “value add”
proposition and create an environment which not only attracts traffic but also intensifies
interaction with the clients and creates a “word of mouth” or Internet-based self advertising
stream.




1
 A WebPartner representative kindly provided us with confidential and valuable information that we used as the
main source to write this overview.


                                                                                                                 2
                                               Market Analysis


Small and midsize businesses comprise more than 99% of all US employers. The easy access of
the Internet makes possible an increased number of competitors in any sector, regardless of
geographic location. In the past, small and medium businesses focused their operations on a local
population. Today the Internet is leveraging the playing field and presents greater potential
geographic opportunities for businesses2.


In order to compete with larger organizations, smaller firms rely today on the quality and
accessibility of their Internet site, which sometimes may be comparable or superior to that of
larger companies. Small companies can access a wider range of customers within a niche and
better market their offer to a very specific segment. Tracking customer taste, preferences,
behavior and decision patterns is essential to provide information on which to base reliable
business forecasts and identification of strategic windows of opportunity. Such in-depth analysis
of markets seems out of reach for small and medium size companies due to a lack of time and
prohibitive costs. An alternative to customized research may be provided through Internet access
to user, topic and newsgroup on issues related to an organization’s market offering. For small
and medium businesses the most important factors driving Internet usage are as follows:3
     Improving company's image
     Providing customer support
     Increasing sales
     Creating a site in response to customer requests


The barriers to realizing additional such benefits are, for example, the difficulty in promoting the
site and finding qualified personnel for maintenance, and the additional time needed to analyze
and respond to customer feedback.




2
    Source: Internet research ISSN 1066-243 volume 8 number 3 1998 page 229




                                                                                                   3
In order to establish the segmentation of the market we looked at the needs of seven types of
industries.
Use of the Internet for Business
Industry               Marketing &             Information gathering      Customer service        Electronic
                       Advertising                                        and support             transactions
Computer and           Product and             Feedback                   Press releases          Sales orders
information            services                New products               Useful hypertext        Software delivery
technology             Information about       Information sourcing       links                   Subscription to ISP
                       the company and         Competitors Tracking       Assessing FAQ’s         Customer’s
                       market trends           customers                  Down-loading            correspondence
                                                                          drivers                 Online consulting
Hospitality            Sales promotion         Feedback                   Press releases          Room reservation
                                               Market research            Useful hypertext
                                                                          links
Manufacturing          Product and             Feedback technical         Press releases          Sales order
                       services                information                Useful hypertext        Exchange files
                       Information about                                  links                   between engineers
                       the company and                                    Allowing                Simultaneous
                       market trends                                      customers to access     projects’ work
                                                                          database
Retail                 Electronic catalogs     Feedback                   Press releases          Sales order
                                               Market research            Useful hypertext
                                               Competitive tracking       links
Publishing             Trial products          Feedback                   Press releases          Subscription to the
                       Information about       Opinion soliciting         Useful hypertext        magazines or
                       the company and                                    links                   newspaper, on-line
                       market trends                                      Online information      publication and
                                                                                                  services (consulting)
Banking/               Financial products      Feedback                   Useful hypertext        Trading
Finance                and services            Improving websites         links                   Personal account
                       information                                                                transaction and
                                                                                                  verification
Travel                 Tour packages           Feedback                   Press releases          Tour package
                       promotion               Latest updates             Useful hypertext        Reservation
                                                                          links


Adapted from: “The Use of the Internet for Business: The Experience of Early Adopters in Singapore” page 217 Internet research
ISSN 1066 2243 Volume 7 number 3 1997




3
 Auger and Gallaugher 1997 report “Factors Affecting the Adoption of an Internet-Based Sales Presence for Small
Businesses” The Information Society, Vol 13 No1 pp55-74


                                                                                                                             4
According to Cyber Dialogue/Find SVP in association with C+C Data survey, more than 25% of
small businesses online today attribute sales increases to their Internet presence. 37% of all US
small businesses, or a total of 2.6 million operations, now conduct business online. In addition,
another 1 million small businesses are likely to come online in 1998, meaning that half of all
small businesses in the country could be online by year's end. Thomas Miller, Vice President of
Cyber Dialogue, said in a press release, "Nearly half of all small businesses online now have
Web sites, and half say they expect the Internet to help them save costs on advertising,
telephone, and courier services.”4


As the article mentions, 84% of online small businesses send e-mail to customers, and 50% of
those with websites believe their sites enhance customer service. In addition, 39% expect
Internet use to result in lower long distance phone costs in 1998. Brendan Elliott, president of
C+C Data, said that "Already, 11% of small businesses online have integrated online banking
into their business processes." Nearly a third of small businesses that now bank online had
revenue growth in excess of 20% last year.


Additional results from the survey show that 80% of small businesses with Internet capability
seek information on business products and services online, 65% use e-mail daily, 53 % use the
Web daily, and 38% purchase business products and services online.


The U.S. Small Business Internet Survey included six focus groups and comprehensive
telephone interviews with 1,000 U.S. businesses comprising less than 100 employees. The
research was completed in February 1998.


According to the article, "44% of the amount of investment planned by 160 small businesses
surveyed will be spent on upgrading existing computers and 16% will be used to replace existing




4
 Source: http://www.techweb.com/wire/story/TWB19980331S0012 "Small Businesses Use Web to increase sales”.
03/31/98, :04pm ET



                                                                                                        5
computers with new ones. These improvements are important if a company is to have a
significant online presence5."


With such an increased presence on the Web the activity will have to be monitored closely to
define the return on investment of doing business over the Internet. Several companies such as
Andromedia have developed complete software solutions to monitor traffic and site performance.
Small and medium size companies that do not have information technology services in-house, or
do not want to manage the technology, might prefer to outsource this task. Monitoring is not as
simple as it may sound. In some cases, caching, proxy servers and trawler software may bias the
counting results.


A cache is a temporary memory device resident in the web browser software that the surfer uses,
and is a standard feature of most software products. Although illegal in Europe, its purpose is to
accelerate access to a particular data source. This previously retrieved home page may be stored
on the surfer’s hard drive (the cache in this case) to speed up the access for the next time that the
surfer points to and clicks on this site, without actually going to the site. In short deployment of
cache memory speeds up retrieval, reduces network traffic and decreases the load on both the
server and the browser’s computer.6 An unfortunate and unintended marketing research
consequence however is that data collected by a web server inevitably undercounts hits. For
example Netscape offers the use of three levels of caching: once per session, always and never.
With no caching, the browsers will not retrieve the latest version of the website despite the
website owner’s updates, innovations and changes. The customer may be viewing a page that is a
month old.




5
   Source: http://www.techweb.com/se/directlink.cgi?VAR19980330Soo28, "Small Business on the Net", March 30,
1998 Issue 1407, section Data Bank
6
  Internet Research, volume 7 number 1 1997, “Visits, Hits, Caching and Counting on the World Wide Web: Wine
in New Bottles?” P5 Pierre Berthin, Leyland Pitt and Gerard Prendergast


                                                                                                          6
                                             Marketing


A major challenge for Web-based companies is to create a strong presence through branding to
increase traffic to the site. WebPartner’s current marketing strategy is mostly focused on
developing networking and relationship marketing with potential partners who share the same
target market. They plan to establish strategic partnerships and alliances that would allow them
to obtain exposure in the market as well as increase their customer base from the "hundreds" to
the "tens of thousands".


Such a strategy, which aims at developing online strategic partnerships, is indeed critical to the
future success of the company. To help WebPartner successfully pursue relationship marketing,
we researched the many different marketing tactics available online that WebPartner may
consider to select and implement as part of a more comprehensive marketing strategy. The
results of this research are presented in this section, whose main objective is to provide
WebPartner’s management with marketing-related information and ideas that may be used to
supplement what the company's marketing department has already done.


We believe that online advertising is critical. As reported by an article in Business Week7, this
year small businesses will account for only 2% of the $1 billion budgeted for online ads, as they
generally do not consider online ads to be the best use of their company's limited advertising
budget. The article, however, also highlights the importance of online advertising, especially for
those companies whose services or products are purchased online, as it is the case of
WebPartner.


Initial considerations
The following are important considerations that guided our research on marketing tools.




7
 "Can Cyber-Ads Work for Your Company?",
www.businessweek.com/smallbiz/news/date/9809/e9809/e980924.htm


                                                                                                     7
Budget: As a start-up company WebPartner’s current marketing budget is limited to $3,000 per
month, although the company plans to raise additional capital in the near future and therefore
increase that limit. The current budget is for all PR, trade show, and promotion efforts.


Objective: WebPartner’s marketing objective is to obtain visibility and reach 100,000 registered
users.


Target customers: Their target customers are small- and mid-size E-commerce businesses. Two
sub-segments of this target are individual online stores and merchant affiliate stores.


Benefits of WebPartner’s service: Marketing the "added value" of WebPartner’s service is as
important as marketing the service itself. Any marketing tool adopted should somehow educate
the potential customer that WebPartner’s online store performance monitoring service is a
"Unique Selling Proposition" (UPS) and solves the clients’ specific problems.


Positioning: What is WebPartner’s current positioning based on? Is it the cheapest monitoring
service? Is it the only service available? Is it the most comprehensive monitoring service?
Webpartner may want to describe specifically the key differentiating aspect of their offering as
"The only every-15-minutes online monitoring service to help small- and mid-size e-businesses
maintain an effective, competitive and profitable online store."


Marketing Tactics for WebPartner
In order to obtain visibility, advertise their monitoring service and reach their target level of
customer base, WebPartner’s management should explore and test as many low-cost online
marketing tools as possible. Even within the limits of the current marketing budget, it is possible
to select and implement a combination of marketing tactics that would most probably improve
the results of a partnership-only marketing strategy.




                                                                                                 8
"There are hundreds of Web sites that offer free or low-cost help to boost Web traffic -
everything from sites that will register you with multiple search engines to so-called link
exchanges for swapping ads with other sites"8.


   Registering the website with search engines. The leading search engines are AltaVista,
    Excite, Infoseek, WebCrawler, Lycos, HotBot and Yahoo. There are several types of "search
    engines": Search directories (such as Yahoo), Spider Engines (such as AltaVista and
    HotBot), Classified and FFA Pages. Each search engine has different characteristics: for
    example, while Alta Vista takes advantage of "meta tags" when indexing a website, Excite
    looks at words in the "title" of the document9. Appendix 1 provides more details about each
    type.
   Registering for many search engines at once at sites such as www.register-it.com.
   Publishing an E-mail newsletter, which goes directly into subscribers' mailboxes.
   Sponsoring somebody elses newsletter.              www.copywriter.com/lists   is a Direct E-mail List
    Source that includes websites of newsletters, e-mail lists, and brokers who place ads in the
    appropriate newsletters. (Approximate price to reach a list of random subscribers is $20 for
    1,000 readers. More targeted audiences cost up to $300 per 1,000 readers).
   Free self-promotion is possible by participating in Usenet bulletin boards and subscriber-
    based E-mail discussion lists ("listservs"). (To subscribe to such groups useful websites are
    www.dejanews.com    and www.liszt.com). Here, the company can post a comment, sign off with a
    "signature file" that includes the URL, or a free offer.
   Cyber-partnering. It is effective to swap links with other websites. It is possible to do this
    informally by agreeing with other sites to create links on each other's sites. Also, it is
    possible to join a "Web ring", which is a group of sites that have a common theme, topic,
    audience, that allows visitors to click from one to the other. There are 44,000 rings at the
    Ring World directory, run by the site WebRing. After visiting the home pages of appropriate
    rings and applying to join the selected rings, a ringmaster determines the eligibility of the
    applicant.


8
  "It's Honey of a Web Site, But Where's the Buzz?” www.businessweek.com/smallbiz/news/columns/98-
41/e3599021.htm. This article is also the source of some of the information that follows this quote.
9
  www.rankthis.com/guide/excite.html


                                                                                                        9
    Banner-ads. There are two types of banners: 1) banners, on websites and the pages of search
     engines, that link directly to the company's website; 2) banner ads that appear on a search
     engine's webpage if a company purchase a specific "key word". The cost for key words
     ranges from $35 to $85 for every 1,000 times the word is used. It is possible to select the
     desired sites where to buy banners. Typically the cost is $3-5 for every 1,000 banners
     displayed ($10-15 for more targeted audiences).
    Affiliate networks: Affiliate networks "are a World Wide Web company's way to get other
     people to do its marketing"10. Amazon.com Associates Program is an example of affiliate
     networks that counts approximately 100,000 affiliated websites. Basically, Amazon.com
     pays its affiliates a commission whenever they entice surfers to visit Amazon.com's website
     and buy a product. This tactic may be used for two different purposes:
     a) Create a new revenue source (i.e. the commissions that WebPartner would receive if,
        using the above example, WebPartner signed up to become an affiliated website of
        Amazon.com Associates Program).
     b) Increase the customer base by creating a "WebPartner’s Affiliates Network".
        WebPartner would pay a commission only if the affiliate website sent surfers who
        actually request WebPartner’s fee-based service.
     Affiliate marketing seems to be the most popular alternative to banner campaigns.                       A
     company determined that its cost of acquiring one customer was $100 with broadcast
     advertising, $30 with banners and $15 with affiliate programs. One CEO even calls it
     "recession-proof marketing channel", meaning that this channel allows to cut on marketing
     costs while maintaining good exposure11.
    Animated ads: These are a result of the evolution of Web advertising. Basically, they are
     banners transformed "into small programs that enable viewers to play games, get
     information, print out forms or give advertisers information about themselves"12.                  At the
     forefront in developing this type of ads are two companies: The Thinking Media and Enliven.
     Their approach in Internet-advertising is that instead of simple animations, Web



10
   "Affiliate Networks: Letting Other Sites Do Your Marketing", by Evan I. Schwartz, The New York Times on the
Web, Business Technology, Aug. 10 1998, www.webeconomics.com/nytaffiliates.htm
11
   "Other Ways to Spend Your Ad Money", by Jacob Ward, The Industry Standard, Fe. 15 1999
12
   "Animating the Ad", by Mark Gimein, The Industry Standard, Feb. 15 1999


                                                                                                             10
     advertisements can be entertaining Java programs. Interactive Java banners most likely can
     get a greater share of surfers' attention13.
    Press releases: An article about WebPartner’s website and monitoring service in USA
     Today, Internet World, Business Week, Interactive Age could generate great visibility and
     opportunity for WebPartner’s business. Also, press releases in less well-known magazines
     specialized for small E-commerce businesses may be very effective. WebPromote Press
     Release service starts at a price of $395 when the copy is supplied by the customer (they
     distribute the press release to 7,000 individual writers). When their professionals draft the
     press release copy the price goes up to $69514.
    Initiative in offering free service: WebPartner may take a pro-active strategy and search for
     small E-commerce businesses, monitor their sites, and send them results of the free
     monitoring service. These actions may entice some of these businesses to later request full
     service to WebPartner.
    Rewards programs: Like several companies are doing in order to increase traffic,
     WebPartner could create a "rewards" program that gives users points for viewing pages and
     buying services15. If the company increases traffic enough, this will also help to sell banner
     space for a higher price and generate more revenues from advertising.


For a sampling of Web resources (with a brief description for each) to help drive traffic to
websites please refer to Appendix 2. Additionally, Appendix 3 describes in a table format the
type of service that three well-known companies offer. These are DoubleClick, Flycast and
LinkExchange. While both DoubleClick and Flycast sell advertising on networks of sites,
LinkExchange is an ad-swap service. The three companies also represent three different levels
of pricing: from rather expensive to free.




13
   "Animating the Ad", by Mark Gimein, The Industry Standard, Feb. 15 1999
14
   www.webpromote.com/pressrelease.html
15
   "The Trouble with Web Advertising", by Marc Gunther, Fortune.com, Apr. 12 1999


                                                                                                11
                                                Strategic alliances


Another way that may help WebPartner to achieve its goal of “100,000 registrants” is the
implementation of alliances. During the past several years, we have witnessed a dramatic
increase in strategic partnerships, in the high-tech industry the number of such alliances has
increased at a fourfold annual rate16.


In general, strategic alliances are pursued as a result of increasing cost pressure, rising
development costs, shorter product life cycles, or to improve the economics of existing
businesses. The need for a strategic alliance in WebPartner’s case is emphasized by the need of
rapid growth. Our recommendation is to further look and analyze the possible types of alliances.
In the following table we provide a matrix of alliances matched to the pursued strategy:


                                    Fast         Gain      Gain Market   Fast time-    Add new        Increase
                                  Start-up    Productivity    Share      to-market    knowledge        Profits
       Licensing                                                                              
       Precompetitive R&D                                                                     
       University Links                                                                          
       Comarketing                                                                      
       Technology Exchange                                                                   
       Consortium, Network                                                                    
       Project JV                                                                      
       Equity JV                                                                            
       50-50 Equity JV                                                                    
                                                                                           17
                           Effectiveness:     = very effective,   = less effective




As we can see in the matrix, Licensing, Comarketing and Project Joint Venture constitute the
most suitable strategies for fast start-up, which is what WebPartner is trying to achieve.
However, since WebPartner does not yet have a particular technology or business model to
license, Comarketing and Project Joint Venture should be the two axes to follow. Both are
effective ways to gain productivity and market share, and increase profits.


16
     Collaborating to Compete, Using Strategic Alliances and Acquisitions in the Global Marketplace
17
     Global Trends and alliances, Marcar 2000, Dave raphael


                                                                                                                 12
WebPartner offers a monitoring service of e-commerce websites 24 hours a day to alert the web
administrator of web failures such as downed servers, broken links, and slow access times. This
is a new and innovative service, which has been created in response to the growing importance
of e-commerce. This service can easily be expanded and incorporated into other services.


In order to better understand and foresee the possible strategic choices that WebPartner might
have, we have developed a web model presenting two different but complementary strategies.
The first step, that we called “formation”, is the current state of the company.


To perform a successful alliance, WebPartner should choose a company with complementary
services. This strategy would enable WebPartner to acquire an extended customer base,
capturing customers who have a simple web sites and those with more complex architectures.
The objective is to offer them a comprehensive monitoring product that would include more
services to be offered on a pay-per-use base or in a package.
                                                                                              Value Chain #1




                                                                            Complete
                                                                         e-bus solutions
                                           PSDM                        monitoring services.

                                            (Company monitoring
                                            transaction services)
 Monitoring       Med -Small size bus
  Services         e-commerce sites

                                               Alliance with
                                               Web Hosting
              Formation                                                Offer Complete
                                                                      Monitoring Services




                                        Mobilize
                                                                                            Value Chain #2
                                                                    Grow
As we can see these strategies are consistent with the current market segmentation that
WebPartner has developed allowing even further customization of services.




                                                                                                               13
                                     WebPartner’s Options


WebPartner makes several references in its business plan to the notion that “e-businesses have a
hierarchy of needs analogous to Maslow’s hierarchy of needs for individuals”. WebPartner sees
itself as helping these e-businesses achieve self-actualization. This begs the questions of:


   How to get the attention of e-business managers?
   How to convince them that WebPartner has something valuable and different to offer?


We defined the key question as: “How to get registrations at low cost to WebPartner” and we
used the following simple tree to record some options.


                                      Alliances with similar businesses


                       Alliances      Alliances with dissimilar businesses




More registrations


                                      Use of link engines/services


                       Placement
                                      Link agreements
                                      (get on the LINKS page of small biz sites)




At present, the approach of WebPartner is relying on getting the attention of e-businesses by
strategic placement on the Web. This means either alliances with other e-commerce-related
business or by placement on sites relevant to e-businesses. The alliances can be with similar
service businesses or with dissimilar ones. The similar businesses would be other ones offering
site monitoring and similar services, such as Andromedia. WebPartner sees its services as



                                                                                                14
complementary to these businesses because WebPartner is offering a more accessible
information format targeted at small businesses. Andromedia offers site monitoring, but as less
processed data aimed at IT managers. Alliances with Web hosting companies would also be a
good fit since those ISP focuses on the server potential, speed and access technology but don’t
want to get involved in the management of each specific website and check their URLs.
WebPartner enjoys a key strategic position and provides the client with bargaining power toward
their ISP as well as a mean for the ISP to show up in a ranking list. The dissimilar alliance
partners could be sites such as on-line magazines aimed at small businesses, or financial services
offering small business help, such as Amex, with their particular department targeting small and
medium businesses. WebPartner would gain access to the other company’s customer base, and
by selling both services in a bundle they would ensure a continuous cash inflow. In the same aim
we also recommend to make an alliance with an Internet transaction based company such as
PSDM. This company provides credit card transactions on line. WebPartner’s service would also
match PSDM by monitoring online transactions and alerting customers of problems in their
transaction processes. WebPartner has expressed an interest in partnering with both such similar
and dissimilar businesses.


It is also possible that a large e-business related site could buy out WebPartner. Link Exchange
is owned by Microsoft and WebPartner has mentioned the idea of being bought out by such a
deep-pocket alliance partner. The other approach is advertising via placement. This would entail
getting WebPartner’s name in front of as many small business operators as possible. Such
advertising was described in an earlier section of this paper.


In either case, WebPartner either needs a distinctive service or at least needs to create the
impression that it is distinct. Although the manner in which WebPartner is offering its service is
now different, there is little to prevent competitors from offering a similar service. ISP and site
monitors as Redalert or Freshwater already offer data about a web site’s up time or effectiveness.
If they started to offer the option of paging a customer every time a site had problems, they
would take away WebPartner’s differential advantage.




                                                                                                      15
Alternatives
These conditions lead us to consider if there are other possible business models for WebPartner
to consider. We expanded the present model in two directions: one direction was to change the
manner in which Webpartner is presented to the customer but with the same service offering; the
other direction was to consider new services to offer.


Webpartner as an e-business benevolent association
One weakness in the options of alliances or partnerships is that it rests upon the assumption that
the amount of information that the Web makes available can be exploited. In other words, that
getting in front of the customer is effective. But how long will this remain effective? It is
estimated that consumers receive 3,000 marketing messages/day. A 2% response rate is the norm
for direct marketing. Webpartner’s e-business customers are also subject to such bombardment.
Not only is it likely that many of these e-business operators do not have the time to spend on the
Web where they can be influenced by banner ads, but as the Web grows and becomes more
saturated with advertising, there will be attempts by consumers to limit the amount of advertising
they are exposed to. There will likely be new technologies that will limit effectiveness of on-line
ads such as:
     Identity shielding software
     Cookie suppressors
     E-mail filters


Third party information intermediaries will likely arise to act as custodians and brokers of
customer information. Webpartner could perform this function for e-businesses. An analogy
would be associations such as the AARP. Webpartner could present itself as a benevolent
association to help the e-business community. Low level advice would be offered for free to
members (as it is now), and high level advice for a fee. Low level offerings might include advice
on:
•Site establishment
•Financial processing
•Security
•Advice on taxation issues


                                                                                                  16
The benefit to Webpartner is avoidance of privacy shielding, acquisition of customer data, and
the trust from branding as a benevolent association.


Netside protection services
Currently, Webpartner’s service is to alert the customer when their site is down. They do not
provide assistance to fix it. While one of Webpartner’s advantages is that it is simple to establish
(no software or configuring required by the customer), customers who value this simplicity will
also be disinclined to fix problems themselves. Webpartner does have a very simple diagnostics
service available. This service is an on-line glossary of what error messages mean. When a
customer receives a report describing error messages they can use this glossary to look up the
problem. Yet, this is still not enough to give them the ability to fix it.


As a remedy to this situation, a possible modification of service offering by Webpartner would
be to offer remote repair service. Analogous to the AAA, Webpartner might enhance its product
offering by providing “insurance” against down-time of e-commerce site hazards such as:
• Site down
• Congestion and overload detection (detecting sudden upswing in traffic)
• Security violations
• Backup protection (by temporarily moving website to Webpartner hosting affiliate)


Webpartner might offer their site monitoring for free, and a limited level of such coverage could
be offered at a nominal fee. Remote repair of problems might be carried out by building a
“learning” database of error messages and the manner in which they were repaired. Eventually
this system might be able to analyze error messages and fix them remotely. This would require
that Webpartner have access to the customers site, but would be a considerable benefit to the
customer. A similar idea would be to enhance on-line analytics from the glossary of error
messages to an interactive “virtual repairman”, perhaps similar to the know-bots developed by
Big Science (www.bigscience.com) or Ask Jeeves.




                                                                                                  17
All of our suggestions, whether involving a new business model or not, have been based on the
assumption that Webpartner would like to develop an attractive service offering without
significant investment of labor. We have examined Webpartner from the perspective of how the
Web enables an innovative idea to be leveraged using the ability of the Web to reach a wide
audience and its ability to use technology. The additional suggestions we presented to enhance
Webpartner’s offering demonstrate the wide range of possibilities the Web presents a small start-
up company.




                                                                                              18
                                                Appendix 118

There are three basic types of "search engines" to which WebPartner could submit its site. Each
should be handled differently. They are Directories, Spider engines, and Classified and FFA
Pages.

1) The Directories are categorical listings of websites usually accompanied by a short review or
description. Yahoo is an example of this type. You can search the listings at Yahoo, and Yahoo
has also a "Spider" type engine on the back end, when it cannot find a listing in its directory.

To get a high rank in a directory, you need to be either placed in a category that shows up before
others or your listing needs to start with a low letter of the alphabet depending on how the
directory delivers search results. This is highly dependent on each site.

When submitting to these sites, people review (although some sites do not review) your listing
before they enter it into the database. The challenge is presenting a listing that is acceptable to
them and also one that will entice the web surfer to visit the site.

Acceptance is not guaranteed, especially in top directories such as Yahoo. Therefore, in order to
please both the reviewer and, eventually, the surfer it is important to get to the point, be concise
and stick to the facts. Try to include some of your keywords in your title. Since many people
will conduct a search of the directory listings and not just browse to the right category, it is
important that the site will be indexed in such a way that a potential visitor interested in what you
have to offer can easily find you.

2) Spider Engines (or True Search Engines) are based on actual extracts from the contents listed
on your site. Contrast this with the directory that bases its listings on what you submit or a
reviewer writes. Examples of spider engines are HotBot, Alta Vista, and WebCrawler. These
engines work by sending out a "spider" (an automatic surf robot) that visits your site and takes
snapshot of your page(s). This snap shot is different from engine to engine. It may consist in
looking at the first 500 characters of your site or only title and meta-tags.

Each one in turns ranks search results differently as well. When people say they want to "come
up first in the search engines", they are generally referring to manipulating the spider engines in
such a way that they will come up first when someone searches for a particular keyword.

There are many sophisticated methods for attempting to achieve this goal. The very basic things
to enhance your listing are the following:

a. Title Tag: This tag is in the page "head" of your HTML (between <head> and </head>). You
want to use as many keywords here as possible. When most search engines display your page
data as the result of a search, the <title> tag is the first thing they display. This
Makes it doubly important to ensure the tag looks professional.

18
 The main source of information included in this section is an Internet Marketing Course offered by Aesop
Marketing Corporation. The course can be requested at wysiwyg://119/http://bblmedia.com/


                                                                                                            19
b. Meta Tags: Meta Tags are the most basic tools for manipulating the search engines. Some
search engines will use these Meta Tags to index web content and give this more weight than the
actual content of the page.

There are two main Meta Tags recognized by the search engines: "description" and
"Keywords". These tags need to be placed in the "head" section of your html document just like
the "title" tag mentioned above.

c. Body Text: Since some engines do not look at Meta Tags at all, you need to ensure the body of
your document contains some of your keywords as well. In general, you should try to include
them up close to the top of the page (although some engines will spider the entire contents of
your page no matter how much content you have).

3) Classified and FFA Pages are usually dumping grounds for adds where your listing is added
instantly and you are free to submit what you want. Generally you submit a URL and a title for
that URL. The trick here is to get your listing to stand out above all others. Since hundreds of
listings are added to these pages every day and your listing will be sandwiched among many
others, it is a challenge to write a headline that gets read at all.

Further information regarding search engines and how they work can be found in
www.rankthis.com/guide/yahoo.html.




                                                                                               20
                                                Appendix 219

Following is a sampling of Web resources to help drive traffic to websites.

 Search Engine Registration
 www.register-it.com
    Register companies for free at 16 search engines (not the top engines).

    www.gonetwide.com/gopublic.html
     Is a links page that connects to about 200 registration and announcement services and Web
     resources.

Diagnostics
 www.siteowner.com
   Checks for free the Web page coding that search engines use to find a site. Part of search
   registration site Submit-it.com.

    www.websitegarage.com
     Web site tune-up (free and fee-based services).

Web Rings
 www.webring.org/#ringworld
  Lists Web rings where a company can place its site.

Banner Ads
 www.linkexchange.com/webresource/wrc1.html
  Site for swapping ad banners; also has links to online tutorials. (See Article 2)

    www.flycast.com
     Matches buyers and sellers of discount banner ad space. (See Article 2)

Search Engines
 www.searchenginewatch.com
   News and links to other resources; good how-to tips on using search engines.

    www.monash.com/spidap.html
     Tips on using search engines, with ratings.

Free Links
 www.barnsides.com/links.htm
   A list of sites, directories, and search engines that allow to list Web sites for free.

    www.100hot.com
     Lists popular sites by category; good for link prospects.
19
 The listing provided in this Appendix was sourced from "It's Honey of a Web Site, But Where's the Buzz?",
www.businessweek.com/smallbiz/news/columns/98-41/e3599021.htm


                                                                                                             21
                                                     Appendix 320

                              DoubleClick.net                              Flycast                          LinkExchange.com
Key                   Well-known online advertising              It also offers a collection       LinkExchange (LE) is the largest ad
characteristics        agency                                      of sites                           network in the world
                      Sells in 8 countries for 170 (70 in        It buys space across a            LE allows everyone to get a free
                       the U.S., including Altavista and           much larger universe of            advertising slot somewhere, in
                       Dilbert Zone)                               566 websites in 13                 exchange of two advertising spots in
                      Clients can select the sites they           categories                         your website
                       want to use                                They reach 10 million             LE's network counts about 250,000
                      "DoubleClick Local" service for             users a month                      websites, mostly run by small
                       small businesses is available in 14        Advertisers can buy                businesses
                       Western states and sold through             spaceacross a package of          LE' advertising reaches nearly 40%
                       U.S. West's Yellow Page unit                sites or specific sites            of surfers
                      The system customizes banner               Its local-advertising             You can target your offering among
                       ads based on a Web surfer's                 initiative uses BellSouth'         3,000 categories or geographic
                       location and uses user's telephone          Yellow Pages sales force           areas, in 30 languages
                       area code or zip code for                   to solicit Web ads from           LE provides free statistics on how
                       geographic target                           small companies                    many people see and click through
                                                                   throughout the South               your ad
                                                                  It selects geographic
                                                                   targets through users' zip
                                                                   or area code
Cost              For local service, the minimum             CPM averages around $ 30            In addition to free service, LinkExchange
                  purchase is 10,000 impressions at $ 35     for a minimum buy of                Express is a service that allows small
                  CPM (for basic service) or $ 50 CPM        approximately $ 2,000 spread        businesses to pay for advertising in
                  (for better targeting). Hence, the         over a year (about 67,000           increments of $ 50 to $ 2,000
                  monthly minimums are $ 350 or $ 500        page views at the $ 30 rate)
                  (minimum purchase is for 3 months)
Strengths              Its network is a collection of       They reach a smaller network            The electronic reporting is a handy
                        brand- name sites that reaches       than DoubleClick, but they               tool and LE has become a credible
                        more than 35 million viewers         reach a diversity of sites,              advertising vehicle
                        monthly                              many with a narrow focus.               LE's network is particularly
                       Its targeting software is suitable   This may be good to reach a              attractive for WebPartner as its
                        also for companies that want to      specific market niche                    members include thousands of small
                        sell to other businesses, because                                             business sites
                        they can tell whether a visitor is
                        logged on from a corporate
                        domain name and can tailor ads
                        accordingly (with additional fee)
Weakenesses       It promises successful geographic          Many of the sites on the            Participants have no total control on over
                  targeting only for 73% of viewers          network are not professionally      what appears on their site. Hence there is
                                                             designed. This may have a           the risk of cohabiting with unattractive
                                                             negative impact                     advertising that may have a negative
                                                                                                 impact
Other                                                                                            AdStore Leis a fee-based service that
                                                                                                 allows to purchase on line advertising on
                                                                                                 the Excite Network for $ 1,000 or less.
                                                                                                 The offer is interesting and affordable, as
                                                                                                 the advertising would be on one of the
                                                                                                 best known brands on the Internet


Note: This type of advertising is usually priced in "cost-per-thousand" page views, or CPMs. So,
there is a set price for every 1,000 views of the ad (the range is $2 to $120). The cost changes
depending on the desirability of the site and how the ad is targeted. By using

20
 Sources for this comparison are "Can Cyber-Ads Work for Your Company?",
www.businessweek.com/smallbiz/news/date/9809/e9809/e980924.htm and the companies' websites


                                                                                                                               22
telecommunications technology, the ad can be targeted more precisely (and these are the most
expensive). Ads scattered with no specific target are cheaper.




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