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Were these Verticals too Horizontal? The Slow Death of Mega-Guide Sites

By Andrew Goodman, 3/4/2002

"When you control the mail, you control.... INFORMATION!"

- Newman, vague 20th-century poet


Tireless business journalist Dana Blankenhorn recently profiled Wz.com, an "About.com-like" site, a collection of expert guides (in this case, called "realms") at Wz.com. Blankenhorn praises the site as a kind of savvy dot com survivor, but I'm afraid I don't share his optimism for the concept behind it.

Remember Geocities? It grew quickly as an easy-to-use online publishing platform with a huge user base and a sizeable flow of raw traffic, using phony citizenship-speak to imply community which didn't really exist. Acquired for $1 billion by Yahoo. Today, a nearly-worthless platform and customer list to which Yahoo is trying to sell an upgrade to full service web hosting.

Underline the "trying" part. Yahoo overpaid for a money-losing asset, and have a revenue generating idea that *might* work. Yahoo does make it up in volume, though. They've purchased quite a few overpriced online community thingies. Enough users have stuck around to at least give Yahoo in general the scale to do the things you can do with millions of daily users.

Remember Deja.com? Think hard. They got ahold of Usenet newsgroups, meshed it together with a comparison shopping service, put it all in a big room filled with nerf balls and twentysomethings, and promptly went out of business. The newsgroups were topical, and cool. The revenue generation plan sounded good on the surface, but failed miserably. The theme gets repetitive: "we've got all this information, and plus we're going to get people to buy, uh, stuff." It *can* work. It didn't here. Real market needs and real customers beat a clever business plan nearly every time.

More than a few "entrepreneurs" tried to start the next Geocities. Some managed to pull it off. Xoom gave away oodles of free webspace to users, created a lot of raw traffic, and sold out fast. Xoom was timed so well, and gave away so much more to users, they managed to get to an IPO. This worthless company was bought out by NBC Internet, and folded into a messy agglomeration called NBCi before the parent company, GE, pulled the plug. Obviously there was a logic to the founding of Xoom, but it's a logic that no longer applies.

I don't even know what TheGlobe.com is or was. But the basic story is the same. A really big community that managed to IPO into a ridiculous valuation in the stock market. Geocities all over again. Xoom times ten.

I have nothing against About.com and their first cousins, Wz.com, now-defunct ThemeStream, and ever-hopeful Suite101.com, and their second and third cousins, the plethora of expert sites and multifarious variations on the theme of topical community. I enjoy many of them, and in rare cases, I've connected with one of their guides or realms. [It's also worth mentioning that the Lanfords, founders of Wz.com and veteran marketers, obviously know how to run a business AND give something back. Their Internet Scambusters site looks very useful.]

But if their predecessors’ failure is any indication of future prospects, the remaining mega-guide-sites are fighting a losing battle. About.com was absorbed by print trade mag and magazine publisher Primedia, it's slashed its complement of guides in half, and molecular activity on topical forums led by many About.com guides is approaching absolute zero.

About.com, like Geocities, was a money-losing proposition. The story kept changing; as ad revenues became nonexistent, new ideas were generated -- a division that would sell web hosting; an advertising network of their own; etc. -- in order to generate revenue, because "now it was time to get serious." They didn't work. About.com never came close to breaking even. The same old story: "We've got all this information. And we're going to get people to, uh, buy stuff." Mainly because we forgot to tell them they'd have to pay for information. Anyway, it didn't work.

Some of About's copycats come closer to breaking even because they have low costs. Unfortunately, they too have very little revenue to speak of.

About.com wasn't what most of its hardworking guides hoped it would be, although some did well. "Congrats, you're a guide. The Brand of You just died."

What seems to have been the downfall of About.com guide sites was that they weren't as vertical as they pretended to be. It's one thing to devote your life and your spouse's high-limit credit cards to one topic on the way to becoming one of the cool destination sites on that topic. It's quite another to sign up as a subcontractor in order to follow a common set of rules, using a common content management system, joining hundreds of others doing the same thing. You start to wonder - hey, what's the difference between doing this, and just starting my own weblog? Or getting a hosting package and running my own site? Or self-publishing on Geocities? Or becoming a star poster on a message board or discussion group; a moderator, even? Or being a volunteer of some kind for AOL (when they emphasized that sort of thing)? In short, as a guide amongst hundreds, how do *I* break through the clutter?

It's not only the truly devoted vertical portals which have been able to kick the generic guide sites' tails - it's also the weblog, and the small, relatively insignificant site that nonetheless has its owner's personality and a less canned feel. These are the kinds of sites, in fact, that have been started by former ThemeStream writers, former About guides, etc.

At the end of the day, About.com may be remembered as a site about everything and nothing, produced by everyone and no one.

Is Wz.com any better? One can't prejudge the case, but the precedents in the slowly-dying-themed-community space aren't promising. "They've got all this information, and now they're going to try to get people to buy some, uh, information." About what? "About all kinds of different topics." Info about all kinds of topics, eh? By people I've never heard of? Hmm.

The following tangent may explain the problem. Not a day goes by when I don’t wonder why Seinfeld is such a good show... and why other shows, seemingly similar, are not nearly as good. If you look at it dispassionately, similar elements are there in many shows. But they’re not Seinfeld. There may be several sources of Seinfeld’s success, but one that cannot be emphasized enough is the characters, and the actors they dug up to play them. J. Peterman, Frank Costanza, the insane mechanic, the Soup Nazi, Krueger, Jackie Childs, the suburban boors, the braless Oh Henry! candy bar heiress... the variety, the passion, the wardrobes, the comedic timing... it’s all there, and there are hundreds of them. Rarely a poor casting decision or bad performer in the lot. By contrast, you could hand the world’s funniest material to the cast of Suddenly Susan and they’d find a way to screw it up.

If you’re going to write a show about nothing, then, you’d better have the world’s most interesting cast of character actors tilling that barren soil. The same goes for web sites, I guess. When good writers leave an avidly-followed site like ClickZ.com, and reasonably able (but not outstanding) writers replace them, the site is not "just as good." Readers lose interest. They regain it when those outstanding writers return.

Last-ditch revenue generation ideas in this space have generally fared no better than their original back-of-the-envelope projections based on ad revenues and fantasy market valuations. It's easier to break even when your costs are low, but from a business perspective, that's setting the bar pretty low, isn't it?

Speaking of philanthropy, has anyone figured out how Google plans to generate revenue from Usenet newsgroups? Maybe some things just weren't meant to turn a profit.

Related story:

<

a href="http://www.traffick.com/story/2001-04/online_community.asp">Online Communities Endure as Platforms Come and Go

Andrew Goodman is Editor-in-Chief of Traffick.com and principal of Page Zero Media, a Toronto-based consulting firm which focuses on search engine optimization and related marketing services. To stay in touch with search engine and portal trends, be sure to sign up for Andrew's Traffick Monthly email newsletter.  

 

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