ELC 498 ELC 498 ELC 498 ELC 498

Day 12Day 12

DAY 12 Agenda• Today October 20

– BMG Entertainment - Kristin

– Recap of Online Content Providers

– Intro to Online retailers

• October 24 – Staples.com -Anup – Round 2 Grading due

• October 27– Petstore.com –Steve

• October 31– Sendwine.com – Jeff– Recap of online

retailers• November 3

– Intro to online brokers– DLJDirect – Donnie

• November 7– Carpoint - Kristin

General Comments on Midterm

• The majority of answers required more analysis in the context of the GBF model derived by the author

• I am always looking for objective analysis (not subjective)

• Make sure your facts are correct– Be wary of stuff you find with a “google”

search– Use good research materials

INTERNET BUSINESS MODELS

• ACCESS PROVIDERS• PORTALS• CONTENT PROVIDERS

– BET.com; CNET; Boston.com; BMG

• RETAILERS• BROKERS• MARKET MAKERS• NETWORKED UTILITY PROVIDERS• APPLICATION SERVICE PROVIDERS

Issues Facing Online Content Providers

• Register users or find other ways to target ads?• Become a vertical portal/“infomediary”? (CNET; BET;

Boston.com)– Link to third party information sources– Add commerce capabilities– Be “complete, credible, and convenient”; aggregate and

integrate

• Syndicate content to other websites?• Exploit multi-media linkages? (e.g., CNET: TV and radio)

Issues Facing Online Content Providers

• Revenue Streams– AD Revenue

• Targeted raises the premium – Paid Content– Licensing

• For an incumbent is the Internet a Threat or an opportunity??– Boston Globe– CNET– BET– BMG

GBF for Content Providers?

• GBF when you believe– Online ad/commerce revenue will surge

over next few years– AND, new web user’s brand loyalties are

malleable– AND, “winner-take-all” dynamics apply, due

to:• Network effects• Scale economics• Intrinsic ability to retain customers

GBF for Content Providers?

• GBF when (con’t)– AND, the lifetime value of a customer’s

cash flow exceeds the cost of acquiring the customer

– AND, the risks of competitor preemption are high

– AND, the company can manage operational growing pains

– AND, the capital markets will reward market leaders

Get it right First when:• Protecting quality and brand is

paramount• “learning by doing” yields a big payoff

• Which is it for these providers “GBF” or “GIRF”?– Boston.com– CNET– BET.com– BMG