With its $207 million acquisition of the
Gamesville.com gaming site, Lycos has validated a new truth about the Internet:
Games are turning into a must-have feature for aspiring Internet portal
A year ago, the big portals raced to outdo each other, dressing up their
sites with sundry free e-mail and e-commerce features. But in the search to
offer something truly different, portals are looking to entertainment as the
next holy grail.
"Now, games are what
everyone needs to have," said Doug McFarland, the senior vice president of
Internet tracking firm Media Metrix.
That point was underscored by a rush of activity this week. On Tuesday, No. 1
Online Inc. unveiled a deal with game giant Electronic Arts Inc. to run its online game
channel. One day later No. 4 Lycos announced the Gamesville.com acquisition, a move analysts said would prevent the
gap with AOL from widening.
On the surface, the acquisition changes little; Lycos only adds a couple of
points to its audience. But there's a less apparent gain: The addition of
Gamesville.com boosts the amount of time users spend on Lycos' Web properties by
a whopping 22 percent.
Gamesville lets visitors play games, such as Bingo, Poker and Acey-Deucey,
for free and gives the audience chances to win prizes. In return, Gamesville
peppers the players with commercials from its advertisers. It's a model that
allows a company to profile its users and target the advertisements as well.
The result: More than 2.2 million registered users glued to the Web despite
frequent advertisements -- so much so that the site proudly claims, "Wasting
your time since 1996."
Follow the leader
firms like Media Metrix have come in for recent criticism from Web industry
executives who complain about the accuracy of the numbers. They contend that the
methodology doesn't fully take into account the number of users on their sites,
let alone the amount of time spent there.
But as the focus shifts from page views to ad
impressions and time spent, quality of reach is sure to become a major
consideration in how Internet companies get ranked.
"Obviously, advertisers are going to look at overall reach, the size of the
audience," said Eddie Ranchigoda, the product manager for the MSN Gaming Zone.
"Only three percent of users have played a game online. There is a lot of
potential for growth. As important, advertisers are looking at quality of reach
and that is where stickiness is a factor."
To be sure, the portals need to offer what consumers want and broad-based
games appeal to a general audience. Other gaming sites, such as Pogo.com --
which rents out its leisure games to sites such as Excite
-- and Uproar are based on a similar strategy, said Jeremy Schwartz, senior
analyst with market watcher Forrester Research Inc.
"Personalization of advertisements is pretty big," he said. "The audience is
like a big focus group for (Gamesville). The data comes back and they can tweak
the games in real time."
While the deal between Electronic
AOL is similarly rooted in the search for new audiences, the EA-AOL deal is much
more focused on delivering entertainment, said Mark Blecher, vice president of
marketing and e-commerce for EA.
"The Internet has been successful in delivering information. It has been
successful in making communication easier and allowing e-commerce, but it really
isn't that entertaining of a place," he said. "Our venture (with AOL) is about
making the Web a more entertaining place."
In contrast, Gamesville is less about gaming and more about direct marketing.
Lycos CEO Bob Davis put the focus more on Web traffic than on entertainment.
"The addition of Gamesville to the Lycos Network adds to our revenues, grows our
average daily usage minutes by nearly 20 percent and adds depth to our direct
marketing efforts," he said.