The Day Ahead: Hack attacks become branding for Net firms

On the Web branding is everything. So it comes as no surprise that some Net companies are using that latest round of hack attacks as the ultimate branding opportunity

The great hack-a-thon (see Denial of Service round-up) continues as the largest sites on the Web get hit by the dreaded Denial of Service attack. Bringing down a site by flooding it with requests may be evil, but it spells opportunity for some companies that wouldn't get press under normal conditions.

By now everyone knows about the dreaded Denial of Service hack -- a technique where a site is overloaded with page requests.

With the Federal Bureau of Investigation on the case and the list of victimized sites growing longer, the hack attack has become a media circus. That means some players in the Media Metrix top 20 must be begging to be attacked just for the public relations and a potential market boost.

Don't be surprised if you see something like this in the next few days:

SAN FRANCISCO -- Alsoranportal.com suffered an outage for three hours Thursday after devious hackers launched a Denial of Service attack.

"These hackers must be stopped, but we fixed the problem quickly. As one of the fastest growing properties on the Web, we should have known we would be a target. It's a validation of our business model," commented CEO I.M. A. Crook.

Here's the logic behind the "branding in crisis" theory: If hackers attack a site it must mean that it's important enough to get hacked and one of the bigger players on the Web. Put the CEO and look like a Web leader. For some companies, a little hacking adversity could be a springboard to bigger things.

Buy.com gets hacked the day of its IPO, but shares don't miss a beat. Why? Buy.com was important enough to get hacked in the first place. The hack attack probably distracted investors from focusing on the land mines disclosed in regulatory filings.

Lycos must be fuming because Yahoo! and About.com had hacking-related problems and it didn't. Will Lycos -- the fourth largest Web property -- ever get any respect? E*Trade takes a hit so that must mean its more important than Ameritrade. Even ZDNet, the parent of ZDII, got more exposure Wednesday than $25m (£15m) in advertising could ever provide.

Taking the "any press is good press" theory a little farther, some players on Media Metrix's top 20 have got to be hoping for a hack attack for the PR boost. LookSmart hasn't gotten a lot of press lately and should be holding out an "attack us" sign. We can see the press release now, "LookSmart suffers hack attack, we're important too."

And if Go2Net suffers an outage maybe those hot-shot Wall Street analysts will finally take notice. The best-known analysts on the Street ignore Go2Net because they don't have investment banking ties to it.

Of course, there are other companies that will benefit directly from the hack attacks.

"The attacks are driving home the importance of security," said Lawrence York, manager of the WWW Internet Fund. We asked York to pick out a few stocks he thinks could gain from the hackfest.

His top picks were in the online security sector. Check Point Software, Entrust Technologies, ISS Group and RSA Security were among his top picks. All four of those companies deal with either Net security or virtual private networks. RSA had the best run Wednesday, but the others closed up in a down day for techs.

Verisign also had a nice run because it provides software for secure e-commerce. Another one of York's favorites was Keynote Systems, which is a web site monitoring service. Keynote has been branding savvy -- company executives are in front of the media. That extra press could be invaluable when it comes to landing new customers.

Musicmaker.com a hit?

Sometimes it just doesn't pay to make a bet. A few weeks back I criticised Musicmaker.com and its skimpy revenue and one shareholder emailed me in protest. "I expect Q499 revenue to greatly exceed your pathetic expectations. Are you then going to write something positive in your column?" he asked.

I was so sure of myself I made a little wager. "Sure, what's optimistic for you. $250,000 in sales. $300,000 in sales? If they break $300,000 in sales I'll mention them," I quipped.

So now it's time to pay up -- the company said fourth quarter sales would be about $787,000. There, I mentioned it.

See ZDII for US tech investor news.

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