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Tech Industry

Portal mania

Whether they're talking about portals or gateways, destinations or search engines, investors and entrepreneurs have gone portal crazy.

    Whether they're talking about portals or gateways, destinations or search engines, investors and entrepreneurs have gone portal crazy.

    Similar to the way Tom Cruise and the other pioneers in that otherwise bland movie Far and Away rode furiously into unmarked territory--caring more about having a fat piece of land than the right piece of land--Internet Age companies, and, even more so, physical incumbents, have gone portal crazy, paying any price to be part of a portal.

    Don't get me wrong, I'm not saying that there aren't great bargains out there (Amazon.com and Telesave on America Online, Netscape's Netsearch button, for example) based on revenue per lead equations. I just question whether the portals of today will be the portals of tomorrow.

    In my opinion, the primary portals--like America Online, Yahoo, Netscape, Excite, Lycos, and Infoseek--are only one part of the story. The portals of tomorrow will not only include the online content sites geared towards specific subjects (sports, finances, dating, etc.) and demographics (women, students, minorities, etc.) but perhaps more importantly, the portals of tomorrow are the corporate Web sites that are being constructed today.

    While investors and entrepreneurs are fighting for space on portals--paying very large, up-front, traffic-related, multiyear deals--large corporations are quietly building utility into their Web presences. Furthermore, we shouldn't underestimate the value of the demographics these intranets and extranets aggregate. Talk about highly targeted! Companies like Boeing, Compaq, Ingram Micro, and National Semiconductor are extending the reach of their Web sites every day for one reason and one reason alone: utility.

    Corporate Web sites first were used for very basic functions, such as 401K plans, bulletin boards, company calendars, and events announcements. Now, these same Web sites have, in effect, become business destinations. By aggregating critical information for employees, customers, and partners, corporate Web sites are no longer "go-through" sites; they're becoming important pit stops. In fact, certain companies are building elaborate extranets that are accessed three to four times daily by corporate customers and partners.

    Indeed, corporate customers increasingly are seeing their Web sites as the most important cross-departmental, cross-company communications application infrastructure that can be leveraged. As a result, they are increasing the amount of information and the quality of the information accessible inside their firewalls, and are including everything from relevant articles found on NEWS.COM, Reuters, and Bloomberg business wires to stock charts and even Yahoo's or Snap's directories. Going forward, corporate customers will look to make their corporate Web sites either a default or frequently visited destination for their employees, partners, and customers.

    What does this mean for existing portals? Well, two companies already have partially committed to leveraging portal opportunities, namely PointCast and Lycos, PointCast because its network is geared toward businesses and integrates internal news with external news, and Lycos because it has licensed its search functionality to corporations. These two companies have taken some good first steps, but are far from exploiting the real opportunities available in the portal space.

    I look forward to watching what happens to the traffic numbers of specific sites as corporate Web sites become prime destinations. Some questions to consider: What will happen to the sites that don't have corporate portal-compliant offerings? What will happen to those who don't choose (or can't provide) a licensing strategy?

    Danny Rimer writes regularly about the Internet in Marketwise.