As part of the tooth-and-nail fight to turn a profit, Web search engine and directory companies are imitating a medium that has already proven itself: television.
The latest example surfaced today when Excite (XCIT) rolled out a new format on its Web site that includes 14 channels organized around general topics: arts and entertainment, sports, business and investing, computers and the Internet, careers and education, games, health and science, lifestyle, news, people and chat, politics and government, shopping, travel, and "my channel," customized by and for the individual.
As first reported by CNET NEWS.COM in March, the channel approach is designed to lure more users--and therefore more advertisers--by targeting specific audiences. The idea is to cater to the interests of pre-determined demographic groups, a strategy new to the Web but tried and true for television.
As Excite chief executive George Bell puts it: "The Web can now be modeled after popular media that consumers are comfortable with, such as TV. Excite has become both the remote control and the TV program guide that takes you to each content-based Web topic or channel you select."
Yahoo, for example, offers 14 categories on its Web site, including arts and humanities, business and economy, computers and Internet, education, entertainment, and society and culture. AOL offers a "channel screen," with topics such as computers and software, sports, and kids only.
Its travel channel means that "you don't have to fiddle with pamphlets and call your aunt's best friend who took that cruise to Alaska last year," AOL said. Content on the travel channel includes Frommer's travel guides and Preview travel reservations, which lets users book an airline flight
The channel approach makes sense, most analysts agree. "Companies that are the leading providers of information about specific areas of interest will attract the majority of advertising dollars and transactional fees," William Gurley, analyst with Deutsch Morgan Greenfell, noted in a report today.
As search engine companies and directories move to become more like online services by expanding into content, it will be the quality of that content that differentiates the winners from the losers, analysts say. How users will judge that content is still unknown.
Since the search engine's advertising model is based on volume, Excite executives hope the strategy will make its advertisers happy by bringing more eyeballs to Excite pages.
Excite's free offering, dubbed "Channels by Excite," claims to organize more than 50 million Web sites on the Net. For example, a user clicks on "arts and entertainment" and sees news stories (Brooke Shields weds Andre Agassi) as well as Web sites dedicated to kids (The Dog Ate My Homework) and music (J.S. Bach archives and bibliography).
Later this year, Excite will build out each channel to provide more in-depth content. A producer will be assigned to each channel, developing programming much as a TV producer would for a specialized audience.
The strategic shift comes as Excite plans a secondary stock offering for a much-needed cash infusion. Like many Net companies, Excite lost money for its most recent quarter. After starting trading on Wall Street last year, all of the search engine companies are under pressure to come up with money-making formulas that will justify the interest of their investors.