Portals As Reference Bases and an Application from the Industry

PORTALS AS REFERENCE BASES AND AN APPLICATION FROM THE INDUSTRY: TEKNOLOJİM.COM

Prof. Dr. Murat Ferman

Müh.Alp Yörük

Işık Üniversitesi, Büyükdere Caddesi 80670 İstanbul

Introduction:

Portals have been providing content and becoming a dependable reference base in recent years. Portals have the potential to be the most competitive agents of the Internet. Greatly benefiting from the capabilities of the new media, portals attract great levels of popularity and are prime candidates to become the most extensive publication of any kind. As wireless devices are becoming more commonly used, many people heavily depend on portals for reaching up-to-date information and benefiting from rich data reservoir. It is realistic to state that in a short time period the information will be generated shared and flow mostly digitally.

It is certain that portals offer great opportunities for digital information suppliers, however, for an entrepreneur to build and develop a content providing resource, which has the potential to become a competitive reference base, there are some factors to be considered.

Teknolojim.com has been developed with a keen interest on user needs and expectations in Turkish technology markets with an intention of providing actual, practical, objective and experience-based format model approach. Although there is room for improvement, the portal has managed to gain a favorable position in the industry, in less than a year.

The portals do have a high potential to serve as the most effective agents of softening the “Digital Divide“ in current times.

Definition and Scope of Portals

Portals; are defined as, hubs from which users can fulfill their information requirements, a gateway to web access1. In other words , portals provide a single point of access to aggregated information2.

The portal concept has been applied to general audiences on the web (so-called "Internet portals"), to organizational-private web-sites ("Intranet portals"), and to specialized online communities of practice ("vertical portals" or vortals) 2. In the practice, ISPs like AOL, Compuserve and MSN utilized the first portals. As the time passed, the public has started to perceive such portals and search engines as commercial names like those. Today, there are many different sites, which claim to be portals, but they have significant differences in their services interests and structures.

According to Gartner Group, the portals can be classified in four main categories: horizontal, vertical, intranet and Internet portals3.

Horizontal portals are also known as megaportals. They tend to provide links and average detailed information about any specific subject. Some examples for this category are worldwide known portals such as Yahoo!, Altavista, AOL, Excite. Most of the horizontal portals started their lives as search engines, but as they evolved, they increased their functionality and services by adding advanced types of services such as: searches, financial information, e-mail, newsgroups, news. Most of these portals make money from selling advertisement space but due to recent dot-com failures4 and the tightening budgets of the advertisers, they are moving away from business models which advocates advertising as the principle source of income. It is our belief that in the following years, most of them will offer the basic services for free, but they will charge their users for more sophisticated services and advanced applications.

In comparison to horizontal portals, vertical portals provide much more focused content. They mostly create their own unique content while horizontal ones link to information. Some of the vertical portals have gained global success and recognition such as CNET (technology), Register (IT), Tomshardware (computer hardware), Women.com (women issues), MP3.com (music), Sportsline.com (sports). Vertical portals also generate revenue from advertising as well as some using subscription based business models. According to the uniqueness of the content, it can be easier for vertical portals to charge visitors in contrast to horizontal portals.

Intranet portals are built by enterprises, with an aim to supply information, faster to employees and increase organizational efficiency. Most of the big companies utilize Intranet portals, extensively.

Internet portals on the other hand, are gateways or libraries not focused on internal enterprise functions but, open to any interested individual who have access to Internet1.

Internet portals are also widely utilized ones and most of them have gained immense popularitysuch as NtvMsNbc.com, CNN.com, MsNbc.com.

Portals as Reference Bases

Horizontal portals are far from being a reference base as they provide just the links and average levels of details about some particular subjects. On the other hand, the vertical portals focus on specific subjects and therefore is capable to provide different levels of information.

Vertical portals; acting as information libraries can supply both basic, advanced and expert information at a specific subject. For example, if someone would like to learn as much as possible about e-commerce, Internet.com's e-commerce section7offers tremendous amounts of information about any relevant data for specific needs, including e-mail marketing, Internet marketing, news and press releases of e-companies, trend data, market figures, etc. Even one can subscribe to several of the portal’s e-mail lists, built to tailor different needs, in order to receive daily/weekly information. If someone would like to receive information about B2B, one can visit Cyberatlas8 which offers unique research data and explanations. If someone would like to buy products through auctions, then e-bay9 might be the ideal vertical portal. If someone would like to receive IT news, ZDNet10, CNET11, TheRegister12 could be the ideal destinations to visit. As can be seen, these portals are more focused to a subject and supply more detailed information, in contrast with their more focused out brothers, Internet portals.

The vertical portals have the ability to build Internet communities much more than any other portal type, because, the frequent visitors are the ones who are all interested in that specific subject. The forums, newsgroups, e-mail lists, increase interactivity and enrich the content. They even position the portal as a well-shared and belonged reference base in the eyes of the visitors. One unique advantage of vortals(vertical portals), are their ability to attract advertisers, because of the specific market targeting opportunities they present.

Worldwide Internet Advertising Market Size

The worldwide Internet advertising market generated 10 billlion US dollars in 2000, according to dependable researche studies13. In 2003, this figure is expected to increase nearly two to three-fold up to thirty-eight billion US dollars. This figure alone attracts the big players to the market and most of them are positioning themselves to get a major part of the action. Although the dot-com companies are currently the dominant advertisers in the market, the February 2001 figures show that the brick and mortar companies bought more impressions than their online counterparts according to IAR14. This is indeed very promising, as the success of the online advertising, greatly depends upon the existence of the offline players (brick and mortar companies such as IBM, Volvo, Pepsi), buying advertisement and building trust in Internet advertising. It should also be noted that, the extensively discussed topic of Internet’s ability to build brand and product awareness, has been largely resolved in the year 2000. The new media's brand building effect is proved with several researches conducted by respectable companies15. All the mentioned aspects point out a promising future for web advertising, but the current global economical conditions can slow down the expected growth.

An Application from the Industry: Teknolojim.com

Teknolojim.com, a vertical portal which is focused on technology, providing content in hardware, software, web-design and daily technology news in Turkish, since May 2000. Although starting with the disadvantages of the lack of a professional team and proper funding, Teknolojim.com was successful enough to position itself as a dependable reference base and receiving wide respect in its sector. Above all, Teknolojim.com is a project which gives everyone the opportunity to examine the Turkish Internet industry at first hand. One of the basic goals of Teknolojim.com is to determine the right strategies and the appropriate business models to be utilized for Turkish Internet sector. Before proceeding any further to present what have been accomplished and what is being planned to do, it will be appropriate to look at the vision of the portal:

"To create, develop the best and the most detailed reference base of the high-tech and computing industries by providing unique content."

Creating the best and the most detailed reference base in its category is a very tough task when one considers that Teknolojim.com hasn't been financially supported by any companies from the start-up. But with untiring efforts and highly motivated staff contribution, it has been possible to position Teknolojim.com as one of the most respected hardware sites of our country in the beginning. Presently, Teknolojim.com is working with ten of the biggest computer hardware distributors in Turkey. Up till now, the portal has published 62 different articles, totaling up to 700 pages of content. Our industry news are prepared daily with an average of twenty titles every day. It is our proud achievement that all the distributors cooperating with the portal, start to regard Teknolojim.com as a comprehensive web-media, capable of informing both professionals and potential buyers in a relatively short time.

Being the first to review/preview several different products and services of the computing industry, Teknolojim.com is recognized as "fast, detailed, always up-to-date". These are the most crucial properties that are to be found in a vertical portal and Teknolojim.com is recognized to have those realized, although, there is still room for improvement and future advancements. The difficult task here seems to be sustaining the achieved initial success and improving the capabilities in a competitive fashion.

Several modifications are made depending on the first ten-month experience. We had to focus-out our content with an intention to serve to a bigger market but we were aware that we should not alienate our existing customers, meanwhile. Based on this perspective, some of the best editors in the field were contacted to provide the best content on web-design (html, dhtml, css, Javascript...), daily sectoral news (computer, IT, e-commerce, e-advertising) and Macromedia Flash. With only five editors providing able contribution, Teknolojim.com has managed to gain wide acceptance as well as winning industry contests16.

A business plan, which is built on two different business models, as well as utilizing several locally customized strategies, is prepared. As the first business model is built on the assumption of raising all revenue from advertising, the second model, plans to build one of the first B2C digital marketplaces of Turkey.

Some Observations and Recommendations for Vertical Portals

Internet and its abilities are one of the hottest, as well as, highly promising subjects of the new millennium. The question here is that if it is a balloon/hype or a sure technology, which is capable of delivering what it has promised. With the collapse of the NASDAQ markets, venture capital funding has dried and become more difficult to acquire4. The survivors in the field are the ones, which are utilizing the right strategies to benefit from the Internet's capabilities to provide content and act as electronic magazine look-a-like portals.

There is another critical question to be raised; “Are the portals going to be able to survive in these turbulent times?”.

Although, there is lack of specific data available, we believe that the main criteria should lay within the capability of Internet companies to come up with sound business plans. Of course, the basic characteristic of a sound business plan is to give main emphasize to the “long-term commitment”. No wonder, even some of the most successful and early players in the field is yet to generate profits17. Just providing content and forming a reference base are not enough to be considered as a competitive player. Portals have got more to do to be profitable and respectable in order to be able to survive and buy themselves time to reach their pre-determined goals. In the early days of the web, when generating high amounts of revenue stream was possible, just by acquiring thousands of visitors daily, are long gone. The advertisement budgets of the companies are much more decreased in today's highly turbulent economic conditions. There were many dot-coms, which were the dominant ad buyers, mostly shut their doors while the traditional brick and mortar companies have been approaching the Internet advertising much more cautiously, then ever. The negative psychological effect of failed dot-coms which has created a very cautious attitude. We believe that this will be eliminated with the contribution of Internet-age's creative minds. The worldwide known brands (i.e. NBA and NBL leagues webcasting in RealNetworks, Pepsi cooperating with Yahoo! 18, Volvo paying for ads webcasted in Microsoft's WebTV and Sportsline.com19, Unilever running TV ads20 , Coca-Cola promoting DietCoke21)are trusting more and more to the Internet's potential to build brand loyalty, brand image14 and even act as a direct response marketing tool.

One must understand that the biggest and strongest portals on the market will grasp the high advertising revenue potentials of the future. The small and mid-sized portals will have much more difficulty in acquiring ad-money. Therefore, a specific portal must reconsider its goals and maybe redefine its vision in order to place itself to a position which will able it to become a key player in its specific market. The portals, which are providing content in local languages and niche interest subjects must be even more careful as their potential market is even more limited. Regarding these facts we have attempted to develop and propose schematic approach which will state or demonstrate the critical factors to be considered in developing and sustaining vertical portal.

A Schematic Approach to Evaluative Factors of Vertical Portals

By careful and systematic analysis of the subject, we have determined six major factors to be considered as parameters of a schematic approach.

Six Parameters of Evaluation

• Content Focus
• Language
• Ad Management Capabilities
• Technological Capabilities
• Expert Workforce Establishment
• Business model(s)

Content is the core element in any reference base. For vertical portals, the content does constitute more significance, especially the degree of focus. Careful analysis should be conducted to find out the right focus content, due to the fact that, when focus is limited target market becomes even more limited. In many cases, a narrow focus content limits the number of potential visitors. For example, if you are providing content about technology, then you can look into a target market of millions of visitors per month. But if you focus more and provide content about computer hardware then your target market will be more limited and achieving 100,000 visitors per month could be called as a great success. So, in many cases “focusing-out” rather than “focusing-in” should be considered carefully and options of fine-tuning should always kept open. Also, one specific factor to be considered when focusing out is; not to focus out too much. For example, if one provides content in IT sector, one should not include any content about fashion!

Vertical portals should also give high-priority to the selection of the language(s) which they will provide content in. The portals using local languages can limit their potential market or portals preferring popular languages can face bigger and tougher competition. Presently, English is the mostly utilized language on the Internet, therefore, most of the vertical portals are supplying content either completely in English and/or English version. If your content language is creating a bottleneck in attracting the desired number of visitors, than either changing the language or focusing-out become the alternatives for consideration. If one decides to supply content in a more popular language then one should be prepared for a even tougher competition and must consider capability to grasp a portion of a more competitive market. For example, providing IT content in Italian is much more easier than providing the same content in English as well as competing with bigtime players, such as, ZDNet, CNET.

Any portal, which plans to generate revenue from advertising and attract advertisers, should be able to offer detailed advertisement campaign reporting. However, currently , there is no standardized ways of Internet advertisement campaign reporting. Some advertisement sellers show the hits, some provide visitor numbers(daily, weekly, monthly unique?) while others report pageviews. What is more, the industry respected adserver softwares, which are capable of producing detailed and trusted reporting, are so expensive that only the big players in the market can afford them. This is an important barrier, which the sector has to overcome before being recognized as a dependable advertising media type. For a portal to be able to satisfy the reporting needs and demands of an ad-customer, if and when the appropriate software can not be purchased, working with an Internet advertising agency should be the logical decision to be made. Up till today, the Internet advertising heavily depended upon certain standard types of banners(i.e. *.gif, animated.gif). These banners don't have the ability to appeal to the visual and hearing senses as the television ads. But this is about to change. Fast Internet connections, new media types (Macromedia Flash, streaming ads...) are promising visually rich ads which even have the opportunity to collect visitor feedback and offer superior interactivity in contrast with TV ads. Consequently, Internet ads will strengthen their competitive position and increase their share of the promotional budgets of the companies supported with their direct response marketing capabilities to offer. Any competitive portal should be able to follow the latest trends and guidelines of respectable organizations. The rich media advertisement opportunities like Macromedia Flash, Streaming ads should be offered to the ad buyer for increased efficiency of the campaign, depending on the available bandwidths in the specific geographical region. It should be also stated that, a portal, which has got a WAP site, can greatly benefit from the wireless advertisement opportunities.