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Friday - May 26, 2000

Media Websites Must Change Strategy to Succeed

Web media sites that have yet to achieve a dominant position in their categories must change strategies and deliver more focused content while joining "invisible networks,"—those that allow them to aggregate multiple audiences for advertisers and retailers—according to new research released today by Jupiter Communications, the worldwide authority on Internet commerce. The research, unveiled during the opening presentation of the flagship Jupiter Consumer Online Forum showed that almost half of US online consumers prefer more targeted affinity/genre sites over general-purpose portals, while 39 percent of those consumers gravitate towards familiar off-line brands.

Jupiter surveyed approximately 1,500 online consumers on the way in which they selected their online media source, 46 percent of respondents indicated a preference for more specialized sites. Twenty-six percent liked sites focused on a single topic or genre, such as sports or health, whereas 11 percent favored affinity sites that cater to a given audience, such as young families or boomers.

"Even in the limitless arena of the Internet, consumers spend most of the time on 20 or fewer sites," explained David Card, director of Jupiter's Content and Programming services. "The leading general portals—America Online, Yahoo!, and MSN—have opened a sizable gap between themselves and their competitors, each averaging above 50 percent reach of the online audience. Sites that hope to capture a meaningful relationship with the rest of the audience must create invisible networks that cross media and audience."

Invisible networks allow sites to deliver critical mass to their advertising and commerce partners by pooling large shares of smaller audiences while at the same time retaining the higher revenues associated with specialized audiences. "Targeted online advertising has always commanded higher cost per thousand (CPM) fees than run-of-site placement. While premiums vary widely by site, they range from 25 percent to six times as much with affinity portals positioned to exploit this demand for targeted marketing," added Card. "Further, retail partners will pay more for the higher conversion rates delivered by these focused audiences."


CNET: Majority of B2B Firms to Vanish
The majority of B2B firms will simply vanish within the next two years, according to a CNET article. This is apparently the consensus from the Association of Strategic Alliance Professionsals Sumit, being held in San Francisco.

According to the article "Shakeout Looms Over B2B Market,"

"Government antitrust investigations into online exchanges and viscious talent poaching among business e-commerce companies and their clients are the main culprits in draining enthusiasm from the sector. Since the beginning of the year, Wall Street has smacked B2B stocks harder than almost any other business category.

Such disdain is a dramatic reversal from five months ago, when Wall Street touted B2B as the ne plus ultra investment segment and pushed company valuations to unprecedented levels."

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