From...

February 25, 1999
Web posted at: 5:11 p.m. EST (2211 GMT)

by Tom Spring

(IDG) -- Millions of us use portals when we're trying to find just the right Web site. But even veteran online seekers get lost in the digital static.

Nobody is more deflated by this fact than Yahoo, Excite, Lycos, and the other members of the billion-dollar portal club scrambling to create Web destinations so enticing you don't dream of going anywhere else. That's why portals have gotten "sticky." They're trying to inspire loyalty and get users to stick around longer -- which in turn strengthens their capability to sell ads.

But to the chagrin of portal companies, data suggests that users are loyal to no one. Most Internet users rely on two or three different portals and have no portal loyalty, according to a report released Tuesday by International Data Corporation and RelevantKnowledge.

These findings underscore the difficulty the medium has with fostering customer loyalty, which is at the heart of the portal mania gripping the Net.

"User loyalty and duration are fast replacing reach as the most accurate method of measuring portal effectiveness," reports Jill Frankel, an IDC analyst, in the recent study.

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The ultimate goal for a portal is to build an online utopia, enticing surfers to loiter just a little longer. But for now, many users (including me) are stuck in portal purgatory.

Yahoo has the most loyal user base, according to IDC and RelevantKnowledge. Their study found that the "loyal" 36 percent of Yahoo users hang around on Yahoo-owned sites for 161 minutes a month, compared with the "discrete" remainder, who stick around for 67 minutes.

Sticky versus stuck

In most cases, what's wrong with portals doesn't outweigh what's right. But I find it hard to muster the same type of loyalty to a portal that I have to the CBS Late Show hosted by David Letterman. Even during a dud show by the gap-toothed comedian, I'll sink back zombielike into my couch waiting for a laugh.

The Web is a different beast. With a million channels just a mouse click away, little keeps me from hopping from Yahoo to Lycos if I'm not satisfied. America Online, USA Networks, and @Home know this. That's why they've invested billions in acquiring Internet properties to create one-stop shopping and surfing destinations designed to be irresistible to all. But as portals try to boost their stickiness, I'm finding myself stuck.

Take, for instance, the growing number of advertisement-covered screens it takes to find exactly what you're looking for at Yahoo. It took three pages and five banner ads before I got to the official CBS Web page for the Late Show.

Sites like Excite, Lycos, and Yahoo used to make most of their money selling ads. However, revenues are no longer dominated by banner advertising. Instead, electronic commerce transactions and sponsorships have supplanted ads. This trend, many consider, blurs the line between editorial content and advertising.

We interrupt this commercial

Amazon.com, the Web's largest bookseller site, charges publishers as much as $10,000 for prominent placement on its Web site.

The company says it will disclose to users which book features are sponsored and which are selected by editors. While Amazon.com is not a portal, its practice raises a question about the sincerity of such sites. Are they quickly serving up exactly what you are looking for, or what's for sale?

Don't call me paranoid.

Most search services, including those from Yahoo and Excite, don't charge advertisers for placement in search results. Those screens are generated based on editorial judgments or automated technology.

Lycos, the fourth largest site devoted to helping you navigate the Web, is looking more like a commercial online service. Notably, it offers "channels" that organize information into categories. It sprinkles results with banner ads for related products, as do the other portals.

Yahoo now offers certain businesses the option of paying $199 to be considered for inclusion in its popular Internet search directory ahead of other submissions. Only e-commerce sites are eligible to pay the fee and receive what Yahoo calls "express consideration."

Yahoo emphasizes that the program guarantees only that a site will be considered within seven business days, not that it will be placed in the directory.

Portal upstart GoTo.Com takes pay-for-placement one step further, offering top placement on its search site to the company willing to pay the most. GoTo.Com ranks Web sites based on their willingness to pay for a spot at the top of the search-results list, under a real-time competitive bidding process. The portal is up-front about this policy -- in fact, the company considers it a feature.

Who can you trust?

I'm really not that paranoid, but some users are.

To get you to stick around, many portals -- Lycos, Excite, Go Network, and others -- offer free come-ons such as e-mail, chat, stock quotes, and news in exchange for personal information. Some sites don't ask; they simply keep track of your surfing habits, creating a personal dossier that is a marketer's dream.

Not everybody likes this. AOL created a national outcry last year when it released information about one of its members to the U.S. Navy. Timothy McVeigh had identified himself as gay in an anonymous online profile. The Navy convinced AOL to reveal McVeigh's identity, then discharged him from the service.

After McVeigh challenged the Navy's action in federal court, the service reinstated him. But for many, the incident illustrates an ugly and disloyal side of the Web.

The Coca-Cola of portals

"Few sites have garnered the kind of trust and loyalty that brands like Coca-Cola have," says Barry Parr, an IDC analyst. Portals need that too, he says, if they want to survive. "Portals that will prosper are those that can build closer and tighter relationships with consumers."

Microsoft's MSN is adopting this approach. MSN owns 20-plus Web properties and services, says Nichole Hardy, MSN product manager. Each property compliments others, with the idea of ultimately building MSN loyalty.

MSN started out in 1997 as Internet Start, a default start page for the Internet Explorer browser. In October 1998, MSN put all its sites under one branded MSN.com roof.

Hardy says she recognizes the fickle nature of Web surfers who will bounce from the MSN-owned Expedia Web site to Yahoo, but she doesn't sweat it.

"We just want them to come back," she says.