Business Users Spur the Evolution of Search Engines
Internet search engines were the pioneers of popular Web sites. By positioning themselves as gateways to the Internet, search engines often became the first place users went when entering the Web.
As the Internet shifts from a resource with unlimited potential for profitability to a real revenue generator, several Internet gateways are evolving from search engines to Web portals.
The most prominent portals are Yahoo, Lycos, Excite, Infoseek, MSN, Netcenter and AOL, nearly all of which were established as simple search engines. "The portal market generated about a half-billion in revenue, so it is most definitely an emerging market," says Joe Bartlett, director of Internet market strategies at Yankee Group (www.yankeegroup.com). "Portals have all the right ingredients, a brand name people recognize, content and users."
As defined by the Yankee Group, a portal is a network that aggregates, presents, navigates and delivers a wide range of Internet communication, commerce and content to a mass number of visitors.
"The customized pages portals offer are gaining popularity as default home pages on the browsers of corporate users and even IT managers," says Jeff Narucki, senior analyst, Progressive Strategies (www.progstrat.com), a market analysis firm. "This is clearly because portals have more to offer than earlier search engines, yet they still provide an avenue to the same places."
David Sze, vice president of corporate strategies at Excite Inc. (www.excite.com), says the majority of Excite’s traffic occurs between the hours of 9 a.m. and 5 p.m., indicating that corporate users are responsible for a lot of that traffic.
Therefore, portals offer business services beyond free e-mail and a virtual personal information manager. For instance, on a few pages companies can create private or public communities for trading information, placing documents for visitors to view, working collaboratively and instantly messaging other members of the online community.
"The more people that come to a site, the more content those visitors provide for the site by communicating with each other," Narucki says. "Content grows exponentially if a site has a hook to bring in visitors, especially if they keep coming back."
As the communications and entertainment aspects of the Internet grow, Web portals will need to offer more to stay afloat. Netscape Communications Corp.’s Netcenter (www.netcenter.com), for instance, grew from its inception as the default home page for its browser.
Netcenter grew so much, in fact, that America Online Inc. (AOL, www.aol.com) recently announced plans to acquire the portal. The deal has AOL controlling the distribution of Netscape’s browser suites and managing Netcenter. "AOL taking control of Netcenter continues the trend towards portals," Excite’s Sze says. "It’s a statement that portals are here to stay, and AOL buying Netcenter legitimizes the market for business portals."
The evolution of search engines does not cease with the portal. The Yankee Group predicts that portals, in turn, will evolve into Internet Media Networks. "Traditional media companies are now turning to the Internet. And since portals have several different facets, much like the traditional media companies, they are a natural extension of the companies," Bartlett says. "As portals become more and more successful, there will probably be -- and this happens in other media markets all the time -- some sort of consolidation."
Such consolidation has begun to stem from the greater media. Disney (www.disney.com), bought 43 percent of Infoseek, and with it created the Go Network (www.go.com). National Broadcasting Company (NBC, www.nbc.com) bought a 19 percent share in CNET/Snap (www.snap.com), with an option to buy more, and American Broadcasting Company Inc. (ABC, www.abc.com) has linked with AltaVista.
Zona Research Inc. (www.zonaresearch.com) predicts that as portals enter this next phase, the manner in which users perceive Web sites will shift as well. Use of a specific site, such as Yahoo, AOL or MSN may become of paramount importance, essentially transforming the more successful portals into what Zona refers to as "Web platforms" in a report titled "Web Economics 101, Economic Opportunities, Trends, and Communities of Interest on the Web Frontier". According to the report, users will align themselves with a Web platform much the same way they have done with Microsoft’s Windows or Apple Computer Corp.’s Mac operating systems.
"Especially among corporate users, personalization will drive loyalty," Sze says. "Once users have their portal services established, such as e-mail, instant messaging, community and the people they communicate with on a regular basis through the site, it’s hard to move over to a different portal."
Such allegiance isn’t likely to occur until portals mature and consolidate, thus reducing the number of portals and increasing the influence each possesses.