Saturday, February 24, 2007

Meet the competition

As I'm trawling the Web learning about social networking tools, sites and vendors, I came across Nurse Linkup, a social networking site for the nursing profession. It's got all the standard stuff you'd expect--blogs, networking, forums, news clipping, member pages, etc. What's interesting is the business model. The site is run by itLinkz, which has this to say on its web site:
itLinkz plans to develop, launch and manage more than 500 specialized social networking web sites. We currently own more than 3,000 domain names.

These online communities offer marketers a unique opportunity to identify and reach consumers closely aligned with their advertising needs and, in many instances, represent previously untapped online markets.

Our online communities are successful because they combine cutting edge technology with input from leaders in the various industries and disciplines we serve. These include experts in the fields of medicine, accounting, legal and manufacturing along with thousands of hobbyists including golfers, fisherman and equestrians to name just a few.
So, a mix of B2B and B2C, but make no mistake--the business model here is advertising. In this particular case, I think their goal is a bit overambitious. Remember VerticalNet? A mile wide, a millimeter deep. But still, this is precisely the kind of company that can sneak into your space without a single editor or publisher in that market even knowing about it.
Posted by Dave Newcorn at 7:27 AM I'm reading: Meet the competitionTweet this!
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  1. Will Social Networks and Vertical Search combine to challenge Google?

    Publishers and advertising agencies have a very difficult challenge ahead as traditional “horizontal” media like newspapers, TV channels and magazines see their traditional demographics and advertising revenue streams fragmented by the increasing preference of consumers for online access and the huge presence of Google eroding their audiences and potential future revenues.

    Perhaps they should remember the words of Sun Tsu, who once said: “When the enemy is too strong to attack directly, then attack something he holds dear. Know that in all things he cannot be superior. Somewhere there is a gap in the armour, a weakness that can be attacked instead.”

    Google’s major strength - the clean search box and the ease of use, commoditised ad revenues, perhaps masks its principal weakness. As media content and advertising revenues fragment to serve thousands and thousands of “vertical” online communities based on lifestyle or profession, Google may suddenly seem standardised, commoditised and lacking a sense of unique community. Is Google becoming Wal-Mart, while vertical communities may prefer Harrods?

    Whilst “horizontal” media companies are similar to supermarkets, specialist professional “vertical” publishers are very specific in serving niche communities with totally relevant content and requirements. However, the publisher’s principal operating difficulty in becoming adaptive to this asymmetric Web 2.0 opportunity is that most tend to run each of their print, exhibition and online titles/businesses as separate profit and loss items on their balance sheet. As a by-product the vast majority tend not to have a centralised IT infrastructure or the human IT skill sets to manage a large scale data centre or web spidering facility - the prerequisites needed to datamine and aggregate open source, user generated and blog content to create vertical slices of the Web that are relevant for their audiences. Publishers will also need to integrate this content into the online extensions of their print brands and thereby allowing advertisers the opportunity to target high value communities. In addition, the datamining, crawling and hosting to identify relevant open source content will also need to be a continual process due to the continual growth of user generated and open source content.

    Convera have two very large data centres, an extensive web spidering capability and a web index. Convera are now partnering with a significant number of specialist B2B publishers to create a range of vertical websites for specific professional communities. The first example of this is Searchmedica.com with UBM.

    In building the deep vertical search portals, the key is to reach into the specific professional community in a number of ways. First, you can combined the trade publisher’s knowledge and contacts in the profession with community appeals that engage the specific audience in a way that general search cannot, and also by taking special care to use the taxonomies common to the targeted profession in organizing search results so that the user feels more at home and among peers. Building a good vertical engine can be costly and time consuming, and getting a critical mass of users to de-Google their search habits into more specialized engines is potentially a tough sell. However, in tests with focus groups from different professional communities to test these vertical search properties against Google, the results are hugely encouraging.

    In building the beta test sites, the specialist publishers are providing Convera with “white lists” of data sources online and websites that would be most relevant to its readers so that the searches are restricted to reliable and trusted information. Publishers are also securing agreements with owners of key proprietary content not normally crawled by Google by leveraging some of its contacts and resources so that Convera can crawl and deliver some of their proprietary content.

    Another key consideration is getting the user community engaged in the process as co-developers. No matter how bad the results at Google or Yahoo may be for a given professional segment, the interface is familiar and the destination is always at hand. Getting users to think of a specialized brand as the go-to place for business information is the challenge.

    A number of publishers are actively assessing the potential of adding social networking to the mix in order to get professionals interacting with each other and adding weekly podcasts by industry experts on issues affecting the community - these additional services will create more community loyalty and also additional advertising and sponsorship opportunities.

    The publishers can also use their print titles to drive the audience to the new online areas and this will also assist the transition of their high value print ad revenues to online. Publishers also have exhibitions, seminars, events and email newsletters to assist this transition - and recent research suggests that professional communities will actively attend seminars and events to meet peers and other members
    of their community. The theory goes that once you get some professionals involved then the viral mechanism or behavioural “Hive Mind” also kicks in and professional workers start referring to the vertical portal as a community source. It is also allows advertisers and public relations organisations access to a clearly defined, affluent, influential and stable audience.

    Google does not allow you to have a beer with a potential business partner - it doesn’t have that sense of community. But Google is fighting back - the recent launch of Google Custom Search and acquisition of teenage social network sites indicates they are aware of their weakness - but specialist publishers see this as a Trojan Horse. Social networks for teenagers are highly transient and target a demographic that is volatile, unpredictable and has a low level of disposable income - whereas a social network alongside a vertical search service for 22,000 bio-chemists, 55,000 UK GP’s, 55,000 insurance risk assessors or 120,000 US psychiatrists is stable, affluent and attractive for advertisers.
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