The Skinny On Niche Portals
Just when you thought you knew all there was to know about portals--those whopper World Wide Web sites that offer a dizzying array of services and information--a new generation is emerging. Called specialty portals, these sites are single-subject hangouts--like the No.1 sports site, ESPN--that are now racing to adopt the features of their broader counterparts, like E-mail, search, and E-commerce. "I don't think there's anyone out there who now thinks a narrow play can carry the day," says Geoff Reiss, senior vice-president for programming and production at ESPN's Internet Group.
Broader is definitely better on the Web. In short order, megaportals such as Yahoo! and Excite have expanded their turf to include areas the single-subject sites once claimed--finance, health, sports, women's issues, and the like. That has attracted a boatload of visitors--and advertising dollars. Yahoo!, for example, draws over 40 million different users a month, while iVillage.com, the most popular women's site, brought in just 3 million in September, according to Media Metrix Inc. What's more, this year megaportals will grab about 67% of North American ad dollars spent on the Internet, or $870 million, estimates Forrester Research Inc.
FIGHTING BACK. Now specialty sites, such as E*Trade and ESPN, are fighting back. Book-and-CD goliath Amazon.com Inc. in August snapped up PlanetAll, a service that allows people to stay in touch by organizing address books and their calendars. Women.com Networks and iVillage.com have added E-mail. And ESPN plans by the end of the year to offer search capability. "If you think there are going to be three big [portal] brands and everyone goes there, it's not so. There will be a lot of specialized sites," says Oracle Corp. CEO Lawrence J. Ellison.
E*Trade Group Inc. saw the shift coming 18 months ago and immediately began planning its strategy. E*Trade's goal: to become the hub for all things financial on the Web, not just a low-cost trading site. Late this summer, E*Trade launched a totally revamped site. Gone was the front door that gave only members access to E*Trade's services and data. Now the site provides information, such as financial news reports, company releases, and stock quotes--for free--and has added chat, insurance, and mortgage services. Since the beginning of September, traffic to the Web site has more than doubled, says Christos M. Cotsakos, E*Trade's chief executive officer.
E*Trade's approach is only one of many being adopted by the crop of finely focused portals. CNET Inc., a popular tech-news service, is making a more radical change, morphing into a be-all of tech information. Many health sites already have links to government and nonprofit sites, but they're adding online shops for health insurance or prescription refills.
The end goal is to pump up revenue. By adding free services and more content, these sites could attract more visitors--hence sorely needed advertising dollars. After ESPN reconfigured its site in September to serve as an umbrella portal linked to other sites, including NFL.com, it had the best monthly growth spurt all year: about 1.1 million average daily visits in September, up from 628,000 a year ago. And, while ESPN won't disclose revenue, it says it had its best ad sales ever in that month.
And there could be additional revenue streams. The megaportals already have shown that drawing more visitors translates into distribution deals in which a portal collects a fee for directing consumers to a partner's Web site. Last month, for example, portals AltaVista, Infoseek, Lycos, and Snap! ponied up over $60 million to be featured on Microsoft Corp.'s newly launched MSN.com portal site.
Now vertical portal SportsLine USA Inc. is doing the same. It has inked a dozen marketing deals with companies, including Mining Co., which provides site reviews and discussion groups to SportsLine. "Content is king, but distribution is King Kong," says Andrew S. Sturner, SportsLine's vice-president for business development.
The skinny-mini portals expect that new users, once they learn about the specialized services, will prefer them over megaportals. "Portals are a bit of a hodgepodge," says Candice Carpenter, CEO of iVillage.com. Inc. "Our users have said, `Give us a place that will serve us so we don't have to go somewhere else."' And so portal combat rages on.