Sign of success: The Net's trash underbelly

19 Jan 2006
00:00

The combination of overnight wealth and sheer tackiness makes the Million Dollar Home Page one of those irresistible sites.

The MDHP www.milliondollarhomepage.com, if you haven't heard, is the exceptional idea of UK student, Alex Tew, to pay his way through college by auctioning off a million pixels on a Web page at a dollar each.

It shows all the hallmarks of Internet success: instant riches for its founder, dozens of imitators and a DDOS attack.

But trawl through the page introduces you to the trash underbelly of the Internet: 'Free Hosting', 'Download Movies', 'F.A.R.T. - funny and rude T-shirts', 'Date Tonight', 'Do Male Enlargement Pills Really Work‾', 'MillionDollarWeightLoss.com', 'Free Poker Chips', 'Free Domain', 'Cancer Cure', 'Rent PixelAds.com', 'Lowest Priced Cruises', 'Sexy Women Pixels', 'Loan Credit Card Insurance'.

Sure, most, if not any of these are 'businesses' in the accepted sense. Many are obviously phishing bait, mafia storefronts or simply scamsters preying on the lonely and the desperate.

But Convergence was reflecting on these august enterprises last week when Yahoo missed its profit forecast by a penny, sending the Street into a mild panic for a day.

You see, revenue for the quarter had risen a mere 39%, compared with 120% in calendar '04 and 48% in '05.

Growth has tailed off because there was only one way to go.

If anything, the figures suggest Yahoo is struggling in search against Google, but look at the size of the business. Yahoo racked up $1.5 billion sales for the period - with nearly 90% derived from advertising - for a $683 million net.

Internet advertising is still in hyper-growth phase - yet the realm of targeted, digital advertising is only just opening up.

That's an opportunity that will play well for telcos because, unlike media companies, they know who their customers are and what they are doing.

Operators might take some comfort at just how fluid the advertising market is today.

Network TV and radio audiences and newspaper and magazine circulation are all in sustained decline.

TV in particular has become a complex product. Viewers are deploying the remote or Tivo to avoid ads, or going out and buying DVDs, or downloading onto their iPods.

The next step will be to take this to the mobile device, and this is what has fueled the noise around mobile TV in recent months.

Unlike any other marketing medium, the mobile channel is 'personal, interactive, real-time, and location-independent,' as the US Mobile Marketing Association puts it.

But mobile doesn't just mean cellular. We're also talking play stations, portable music and media players like iPod and Archos. Each of those platforms will know something of their owners and will be networked with them.

Mobile's unique strength is, as the USMMA observes, that it can take advertisers to their preferred consumers and locations in real-time.

It now has to make the technology work. BSkyB head James Murdoch said last week that Vodafone's 3G network has delivered more than five million streams of live TV channels since launching mobile TV in November.

That's a start. When the airwaves are clogged with offers for free gambling and male enlargement pills, we'll know the market has really made it.

Robert Clark is a Hong Kong-based technology journalist and analyst [email protected]

(The views presented in this article series are those of the author and in no way reflect those of Lucent Technologies)

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