Newsletter #74 Some Dominate, Some Die

Created on 12/02/02

A special hello to all new subscribers.

The last newsletter (21st November, 2002) was "Usability Rules Online" and can be found at http://www.netinsites.com/article3.cfm?ArticleID=100

This newsletter only goes to those who wish to receive it. Click on the link at the end of this article if you wish to remove yourself from the list. Note that the next NetInsites Newsletter will be in February 2003.

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As the Internet and e-commerce matures, three of the giants are starting to dominate: eBay, Amazon and Google.

The latest data from Nielsen-Netratings indicates that nearly 12 million shoppers went to the eBay website during the week ending December 1. Amazon followed at No.2 with more than 10.2 million shoppers. According to data released by OneStat.com in October, Google’s global usage share has reached an all-time high of 55.1%, up 1.9 percent on two months previously. The second most popular search website was Yahoo with a global usage share of only 20.6%.

So how did these companies end up dominating?

George Day, Adam Fein and Gregg Ruppersberger have analysed where B2B (Business to Business) marketplaces went wrong see http://www.pembrokeconsulting.com/Shakeouts.html. Their study contends that many companies failed because they didn't know the difference between ‘breakthrough’ and ‘re-formed’ markets.

Breakthrough markets are where there is a new playing field created by technology, and where the assumptions and strategies of existing players don’t help. Television was a breakthrough market. Re-formed markets use technology to adapt existing ways of doing business, rather than creating entirely new ways of doing business. The authors put many B2B exchanges in this category as they attempted to facilitate interactions and lower costs but didn't change the basic structure of the market itself.

The authors regard eBay as a breakthrough market: 'Before eBay, there were few outlets for consumers to connect with other consumers to trade goods. Garage sales and flea markets are erratic and unreliable; eBay created a genuinely new marketplace with customer-centric features such as its ‘feedback’ system for rating buyers and sellers.'

You could argue that Google is king of a breakthrough market, a market that allows people to search for and find information so quickly that it is changing the way we live. Earlier search engines provided some of the functionality, 're-forming' encyclopaedias and directories, but not the ability to answer the most obscure or arcane question in a matter of seconds. Google has taken Web searching to a new level and now 150 million searches a day are answered at Google.

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The other reasons why these three companies have been successful are:

• Amazon and eBay in particular had first mover advantage by getting established early and picked up most of the customers. Although Amazon in particular was criticised for their earlier losses, this strategy has been shown to be sound.
  
• Amazon, eBay and Google invested and continue to invest heavily in building the technology infrastructure for their markets and now they are reaping the rewards.
  Amazon already runs the online operations for Toys "R" Us, Borders Group, Target and has recently signed a deal with Bertelsmann to run the German media conglomerate's CDNow Web operations.
  eBay recently launched an electronics storefront dubbed eBay Electronics and Hewlett-Packard opened a shop within eBay Electronics, where it will sell refurbished servers, computers, printers and handheld devices. Other large companies, such as IBM, Eastman Kodak, Sears and Samsonite already have a presence on eBay.
  The Google searching system is used by the majority of other major search engines, in particular Yahoo uses Google to back up its directory listings.
  
• These companies all made some highly innovative uses of the medium like Amazon's 'one click' ordering system and their setting up the first affiliate system. Google continues to innovate. Recently they introduced Google News, which scours news sites for up-the-the-minute stories, automatically arranging them into a Web page similar to those posted by CNN or Yahoo.
  
• All these three customers are extremely customer-centric - they make it as easy as possible for customers to deal with them and they keep trying to improve the experience.

So what lessons can be learned from these successful Web behemoths?

Getting into a market early can work in the longer term, but only if:

• You use the medium in an innovative fashion to provide users with what they want
• You make sure your technology is robust and scaleable
• You continue to innovate and improve

Have a great and merry Christmas!

Alex Garden

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Newbies

I'll let you in on a secret: keyboard shortcuts are real timesavers. The six I use many times a day involve the Ctrl key ("Apple" on Macs) and the bottom left keys: (+ means hold down the keys at the same time) "Ctrl+Z" Undo Last Action, "Ctrl+X" Cut, "Ctrl+C" Copy, "Ctrl+V" Paste, "Ctrl+O" File Open, "Ctrl+W" Close Current Window. If you can remember these you'll save heaps of time

For previous tips visit http://www.netinsites.com/hottips.cfm

Power Users

PowerToys are additional programs that developers work on after a product has been released to manufacturing. They add fun and functionality to the Windows experience. There are two sets of PowerToys, those for you who have Windows XP and those who don't. XP link first:
http://www.microsoft.com/windowsxp/pro/downloads/powertoys.asp
http://www.microsoft.com/ntworkstation/downloads/PowerToys/Networking/NTTweakUI.asp

For previous Power Tips visit http://www.netinsites.com/hottips_power.cfm

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I haven't read satirical news site BBspot before but must say I enjoyed this article on (yet another) way that Microsoft can make money - advertisements on the Blue Screen of Death! http://bbspot.com/News/2002/10/bsod_ads.html

The best site around for researching what's going on around the Web, and used frequently by this newsletter, is Nua. If you want to check out Internet demographic trends or are just looking for general information about what's happening online you should pay them a visit and sign up for their newsletter. http://www.nua.com/surveys/

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No new articles this month.

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You can see our other Quick Quotes on the front page http://www.netinsites.com; just refresh the page to see another one randomly selected from our database. Great for presentations or times when you want to appear to be a techno-dude(ss)!

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Best wishes

Alex Garden

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