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Internet Marketing in the New Millenium: Friend or Foe? David Strom david@strom.com, (516) 944-3407 October 5, 1999 Summary Good and bad examples of Internet marketing Lessons learned from various Internet leading companies Who is really in control of the Internet today?

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Internet marketing in the new millenium friend or foe l.jpg

Internet Marketing in the New Millenium: Friend or Foe?

David Strom

david@strom.com, (516) 944-3407

October 5, 1999

ITSMA Oct 99 © David Strom Inc.


Summary l.jpg
Summary

  • Good and bad examples of Internet marketing

  • Lessons learned from various Internet leading companies

  • Who is really in control of the Internet today?

ITSMA Oct 99 © David Strom Inc.


Some perspective 1 l.jpg
Some perspective: 1

"This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value."

--- Western Union internal 1876 memo, 1876

ITSMA Oct 99 © David Strom Inc.


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Some perspective: 2

"The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?"

--- reaction to David Sarnoff’s (RCA) investment in 1920s radio

ITSMA Oct 99 © David Strom Inc.


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Some perspective: 3

"The concept is interesting and well-formed, but in order to earn better than a 'C', the idea must be feasible."

--- A Yale University professor's response to Fred Smith's (FedEx) Biz School thesis paper

ITSMA Oct 99 © David Strom Inc.


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Yet the speed of Internet adoption is immense!

  • Radio: 38 years

  • TV: 13 years

  • Internet: 4 years to reach 50 million users

ITSMA Oct 99 © David Strom Inc.


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Bloody battles of our not-so-recent techno past

  • VHS vs. Beta videos

  • QWERTY vs. Dvorak keyboards

  • RJ11 vs. everything else for phone connectors

  • Ethernet vs. Token Ring

  • Whether to bundle Windows with every new PC

ITSMA Oct 99 © David Strom Inc.


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<1998 Internet-based services

  • Find people, email, phone numbers

  • Convert currencies

  • Translate text into other languages

  • Track Bill Gates’ wealth: www.webho.com/WealthClock

ITSMA Oct 99 © David Strom Inc.


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>1999 Internet-based services

  • Maintain contacts, schedules, calendars: my.yahoo.com

  • Maintain email lists: egroups.com

  • Send a fax: efax.com

  • Build a web storefront

  • Pay your US income taxes: Intuit.com

  • Store, backup and exchange large files: click2send.com

ITSMA Oct 99 © David Strom Inc.


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What do all of these have in common?

  • Browser-based services, with little or no desktop software needed

  • Internet-based server and data store

  • Email used for notification and interaction

  • Leverage existing office applications and processes

ITSMA Oct 99 © David Strom Inc.


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The browser has become the desktop

  • Just about everything these days uses a browser as user interface

  • A good way to enfranchise non-Windows users

  • Of course, you may need to upgrade your browser

ITSMA Oct 99 © David Strom Inc.


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Lessons learned from Microsoft

  • They aren’t always prescient

  • They truly understand software developers

  • They know how to grab market share better than anyone

ITSMA Oct 99 © David Strom Inc.


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Microsoft Internet mistakes

  • MSN -- now more than ever

  • Internet Explorer v1 and 2

  • MSFDC -- bill presentment via the Internet

  • Active X: remember the exploder? www.halcyon.com/mclain/ActiveX

ITSMA Oct 99 © David Strom Inc.


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Microsoft’s Internet timeline

  • 1/93: NCSA Mosaic 1.0 released

  • 4/94: Netscape founded, MS hold first Internet meeting

  • 9/94: Netscape 1.0 released

  • 12/94: MS licenses Spyglass Mosaic for IE

  • 11/95: IE 2.0 released

  • 12/95: MS finally has Internet strategy

  • 5/96: IE 3.0 released

  • 10/97: IE 4.0 released

ITSMA Oct 99 © David Strom Inc.


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Things Bill Gates probably wouldn’t say today

  • “640K ought to be enough for anybody." (1981)

  • "I believe OS/2 is destined to be the most important operating system, and possibly program, of all time.” (late 1980s)

  • “There is nothing in this industry that Windows 3.0 isn’t going to change.” (1990)

  • “If you don't know what you need Windows NT for, you don't need it." (1993)

ITSMA Oct 99 © David Strom Inc.


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Microsoft understands developers

  • What tools they need

  • How they think

  • What sodas they drink

  • What snacks they eat

  • What games they need to play when not coding

ITSMA Oct 99 © David Strom Inc.


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How well Microsoft markets its technologies

The latest on CarPoint is a new home page and site layout. Based on extensive usability testing(1), we found that users have trouble finding the info they want quickly using sites that have hierarchical layouts and home pages with too many links. Consequently, CarPoint now has a more task oriented design(2). People are coming to CarPoint to research and buy vehicles so we've streamlined the home page(3) to these two popular areas within CarPoint. The New CarPoint user interface puts everything 1 or 2 clicks away(4) from the home page. As a result, users are now finding exactly what they are looking for, quickly(5). The majority of Internet sites today still(6) have a home page and site layout like the old CarPoint.

-- (actual email from Wayne Phillips at Shandwick, one of MS’ many PR firms)

ITSMA Oct 99 © David Strom Inc.


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Anatomy of a good marketing pitch

1. We’ve done research to prove it!

2. Buzzwords meaning good stuff!

3. Gives impression of advanced web technologies

4. Gives further impression of #3

5. Benefits to users realized!

6.Trash (gently!) the competition

ITSMA Oct 99 © David Strom Inc.


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But there are other leading-edge Internet marketers

  • AOL

  • Amazon

  • Yahoo

  • Selection criteria: companies a start-up wants to be bought out by!

ITSMA Oct 99 © David Strom Inc.


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Who is in control of the ‘Net today?

  • Not Al Gore or the US government

  • Not Network Solutions or ICANN

  • No single authority, other than to track .com’s

  • Suggestions: Microsoft, AOL, and Yahoo.

ITSMA Oct 99 © David Strom Inc.


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What about eBay?

  • Let’s not forget they are profitable!

  • Millions of users, lots of traffic and imitators

  • Well-publicized outages

  • Draws on mission-critical service and support from computer vendors

ITSMA Oct 99 © David Strom Inc.


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Lessons learned from AOL

  • Can send everyone in the US at least four CDs or disks per year

  • Can sign up new users faster than anyone

  • Understand their competition: network TV!

  • Understand their most rabid audience: teens and their moms

ITSMA Oct 99 © David Strom Inc.


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Lessons learned from Amazon

  • Customer convenience is critical

  • One-click ordering (using web cookies) for easy payments

  • Email notifications and book recommendation services

  • Associate programs extends your sales force

  • One of the first to use email gift certificates

  • No one cares about profits if you provide the best service

ITSMA Oct 99 © David Strom Inc.


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Lessons learned from Yahoo

  • There is tremendous value in a well-formed directory

  • A large audience can justify expanding services widely

  • Anything can be done if your market cap is high enough

ITSMA Oct 99 © David Strom Inc.


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Is the Internet a friend or foe?

  • Friend if you can embrace its culture and leverage its breadth

  • Friend if you can use it to better know your customers and partners

  • Foe if you can’t serve your existing customer base

  • Foe if you worry more about control vs. providing service

  • Foe if you forget about infrastructure

ITSMA Oct 99 © David Strom Inc.