Portal power? GO.com didn't get it
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"GO.com failed at its broad-based portal strategy because they came into the game too late and didn't put enough of a focus on what the brand was going to mean to consumers and advertisers," explained Charlene Li, analyst for Forrester Research. "GO.com didn't stand for anything."
GO.com's failure to compete with already established top-tier portals such as Yahoo! (Nasdaq: YHOO) and America Online (NYSE: AOL) was a combination of slow-moving bureaucracy and a lack of understanding of what it takes to compete in the Internet arena, according to a former high-level Walt Disney Co. executive with access to the company's interactive strategy.
"The real answer is they didn't get it until it was too late, and largely the response has been reactionary," said the former Disney executive. "They allowed Web companies with more flexibility to drive the agenda."
According to the source, Disney (NYSE: DIS) initially purchased the Infoseek portal strictly to acquire a quick Internet presence. Later on, the company realized Infoseek was a good search engine but had little in the way of content.
At that point, said the source, even though the deal wasn't what Disney originally envisioned, momentum pushed it forward.
Change from the top
The change of strategy is largely due to the efforts of newly appointed GO.com Chairman Steve Bornstein, who, as the head of ESPN, successfully led that network's efforts to establish a strong Internet presence. The new GO.com direction is likely to be well-received within the company, according to a former employee.
The new direction may even extend into a new name for the GO Network, if search engine GoTo.com prevails in its trademark infringement lawsuit. GoTo.com recently received a reinstatement of a temporary restraining order preventing the Disney from using the traffic signal logo for the GO Network.
Although he believes Disney will likely continue to fight the suit, trademark attorney Jeff Schwartz of McKenna and Cuneo says that in the meantime, the company may need to slightly change the name or logo in order to comply with the court's ruling.
That, combined with new focus, makes this an "opportune time" to change the name and logo, according to Li.
A GO.com spokesperson denied there were any plans to change the company or portal name "at this time."
Despite an advertising effort valued at nearly $40 million, unique visitors to the GO Network remained fairly static, at around 21 million, throughout its tenure as a broad based portal. This was largely due to the company's lack of focus surrounding the purpose of the portal, according to industry analysts.
Lessons to be learned
"A lot of these media companies who own these Web properties think it's enough to put up an URL and people will go there. But people are fickle," said Li. "They want to know why they should go there."
Li believes that logic explains why Disney's other, more-focused Internet properties like ABCNews.com and ESPN.com continued to grow while GO.com languished.
It's a lesson that GO's competitors, particularly NBC, should pay close attention to. NBCi, the network's Internet company created in November 1999, incorporates NBC properties such as Snap.com and Xoom.com.
Like GO.com, NBCi appears to be targeting a broad-based portal strategy. However, unlike ABC and Disney -- which owns established brands like ESPN -- NBC doesn't own a great deal of its own programming. That could limit its ability to expand vertically should its broad-based efforts fail, warns Li.
CBS, on the other hand, has largely stayed out of the portal wars, choosing to focus on making strategic investments instead. This is what Li calls a "smart strategy" because "they're sticking to what they know about."
More strategy shifts coming
Strategic shifts and site relaunches are likely to become par for the course over the next few years as mainstream media companies struggle to find their place on the Internet, according to media analyst Gary Schultz, of the Multimedia Research Group.
It's all part of balancing "big and bureaucratic" old fashioned media companies with the fast-paced Internet world.
"You'll see some really silly mistakes still happening over the next five years with the major networks," said Schultz. "You'll see a lot more of this. It'll be messy."
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