Werbach's Supernova blog

Mr. FoRK fork_list@hotmail.com
Tue, 7 Jan 2003 10:03:43 -0800

Here's the blog from Supernova. Interesting read.

Here's a quote:
"In about 2-3 years you'll be able to have the bandwidth of a medium-sized
city's telephone CO, for about $1000."

What does this mean? Who is 'you' (individual, company, etc)? Is this $1000
yearly or single-time capital cost? How is this technologically possible?
How do the bits move? Who owns or controls those pathways?

----- Original Message -----
From: "Rohit Khare" <khare@alumni.caltech.edu>
To: <Fork@xent.com>
Sent: Tuesday, January 07, 2003 12:20 AM
Subject: Werbach in Slate on back-to-1995: B2C is back!

...can't believe he didn't add your favorite B2C and mine, HOTorNOT :-)

The challenge is really the conclusion: it is NOT obvious to all that
the conglomerate model fails. Personally, I believe it, but there have
been long periods of time where the fashion (and returns) have accrued
to conglomerates.

The more interesting story is whether it was ever thus -- could any of
those companies he mentions have possibly avoided bloating? It was the
rule, back then.

But then again, not bad for a quickie creampuff piece. It's no 20page
exposition, folks.


PS. Do go have a look at Werblog...

Party Like It's 1995
The commercial Web in 2003 is getting back to what worked years ago.
By Kevin Werbach
Posted Thursday, January 2, 2003, at 1:43 PM PT

Way back in the mid-1990s, search was one of the Internet's primary
battlefields. AltaVista, spun out of high-end computer vendor Digital
Equipment Corporation, competed with Infoseek, Lycos, and Excite to
offer the biggest search-engine database and the most accurate results.
Yahoo!, which had the most Internet users thanks to its deep
subject-oriented directory of Web sites, chose not to develop its own
search engine. Instead, it licensed technology from a startup, Inktomi.
Yahoo! believed that its transcendent brand and a growing array of
services and content—rather than a lowly search engine—would allow it
to remain the starting point for most Internet users.

So, although Yahoo!'s original claim to fame was helping Internet users
find Web sites and other online resources, it allowed Google to become
the king of that function today. Big mistake. Search engines have
re-emerged as critical assets for Web-based businesses. In a belated
effort to regain search supremacy, Yahoo! just plunked down $235
million in cash to buy its old friend Inktomi.

Yahoo!'s saga is a microcosm of the entire Internet industry. Today, as
companies retreat to their core businesses, they are finding, to their
horror, that nimbler competitors have occupied the ground they
neglected. Through the heady days of the dot.com boom, Yahoo! and other
leading Web-based businesses larded on feature after feature, including
stock quotes, Web-based e-mail, shopping, calendars, streaming audio
and video, chat, instant messaging, and games—anything to increase
traffic and therefore revenues. Companies that were once simply "search
engines" fattened themselves into "portals." Yahoo!'s Web directory,
its original raison d'ętre, became an afterthought.

But as it turns out, the one thing people really want to do online is
find things. A Pew Foundation study last month found that more than 60
percent of Americans expect they can locate information online about
government resources, news, health care, and business products and
services. That's among all Americans. For those online, the numbers
surpass 80 percent. The Web has become so enormous that it's a virtual
certainty the answer you're looking for is out there; the hard part is
locating it.

Google, launched in 1998, came on the scene too late to join the portal
wars. It put all its energy toward one goal: being the best at search.
While Yahoo! slept, Google quietly became the dominant Internet search
engine, handling one-half of all searches. With its Day-Glo logo,
grad-student founders, and offices featuring a masseuse and a
professional chef, Google is a caricature of the bubble-era dot.com
startup. With one difference: It's profitable. It's now the fourth most
popular destination on the Internet, trailing only Microsoft/MSN (which
publishes Slate), Yahoo!, and AOL Time Warner. For many users, Google
is the Web, in the way that AOL and Netscape once were. It's the
primary interface they use to maneuver online.

Buying Inktomi is Yahoo!'s last, best hope to reassert itself as a
starting point for users. But it's too late. Yahoo! is still trying to
be all things to all people. Google succeeds because it concentrates
exclusively on search. It's no accident that the other profitable
search company, Overture, maintains a similar focus. Overture's secret
is that it sells its listings to the highest bidder, much the way
companies can pay for bigger listings in the Yellow Pages.

The Net has come full circle. The enduring startups fall into the
categories that led the market in the early commercial days of
1995-1996: search engines (Google and Overture), business-to-consumer
e-commerce (Amazon and eBay), and infrastructure software for business
(BEA Systems and VeriSign). Meanwhile, the landscape is littered with
the carcasses of companies, from incubator CMGI to Excite@Home, that
convinced themselves that more was always better. Like Yahoo!,
Inktomi's story follows the script: Instead of extending its early lead
in search, it jumped into unrelated businesses such as content
distribution. As a result, Yahoo! abandoned Inktomi for another search
technology vendor—none other than Google. When the bubble burst,
Inktomi was forced to scale back through layoffs and asset sales.

The Googles of the world, who found valuable niches and stuck to their
knitting, are thriving. Yahoo! and Inktomi find themselves the
equivalent of a 1970s conglomerate: The whole is worth less than the
parts. It doesn't take a search engine to figure that out.

Kevin Werbach is an independent technology analyst and organizer of the
Supernova conference.