Yahoo, Netcenter draw loyal customers
Unlike other Web portals, Yahoo and Netscape Communications' Netcenter are forming a loyal base of users who keep coming back for more, according to a new study.
The second in a series of joint reports from research firms International Data Corporation and RelevantKnowledge, this report, dubbed "The Power of Portals: Who's Using Them and How," noted that of the 22 million home users of online services, most are not faithful to any particular portal. However, Yahoo is beginning to pull away from the pack, as more users become loyal to the brand. Netcenter ranked a close second.
In the past month, the portal battles have heated up with the big players forming alliances with broadband access providers or larger media companies to draw more traffic and to spark e-commerce transactions. Excite was acquired by @Home; Yahoo bought Web community site GeoCities; and Lycos merged with USA Networks.
Despite the growing number of portals and their increasing popularity as destinations for news, information, and entertainment, most users don't see much of a difference between sites.
"Most portals have evolved similarly and as a result, remain relatively undifferentiated," Jill Frankle, program manager for IDC's Internet and eCommerce Strategies Group, said in a statement. "Lack of distinction is a key reason behind user promiscuity. However, there are some significant differences in loyalty between the sites."
The report said that Yahoo has the greatest reach for home Web users with 47 percent of the total home Web population. America Online and Netscape rank second and third, respectively, but the study noted that the accuracy of their reach numbers is distorted by a default home page advantage. AOL has more than 16 million members whose first link to the Internet is AOL.com. Netscape, the maker of the Navigator browser, also has Netcenter as the default home page. AOL moved to acquire Netscape last November. The deal is pending a Netscape shareholders vote to be held in March.
"A portal may reach several million discrete visitors, but what is truly important in terms of measuring effectiveness is how many of those people are loyal visitors or members and how long they stay per visit," Frankle said. "As a result, user loyalty and duration are fast replacing reach as the most accurate method of measuring portal effectiveness."
According to the new report, 36 percent of Yahoo visitors are loyal visitors, and 34 percent of Netcenter's visitors are coming back for more.
The study notes that duration of the visits is also an important measurement tool as it ties directly into the effectiveness of a portal's business model.
"Heavier users are more likely to generate higher ad or transaction revenue," Frankle said.
Yahoo also leads the pack in terms of duration of both discrete visitors and loyal visitors. Its discrete visitors stay for an average of 67 minutes; its loyal visitors stay for 161 minutes. Excite ranks second in both categories. Its discrete visitors stay 45 minutes; its loyal visitors stay 160 minutes.
The new study is part of an IDC/RelevantKnowledge Web Trends Report series. IDC presents metrics for determining the relative success of six popular portals. The report introduces IDC's Membership Model, which examines the key leverage points where a vendor can improve its value proposition to users and therefore lock in members and drive revenues.
The report also examines several of the multimillion-dollar deals that have taken place between the portals and some of the leading merchants on the Web. IDC introduces its cost per referral analysis and in doing so, highlights some of the more successful deals made to date.