I thought I'd share some of the topics Mark Fennell and I discussed in our three hour meeting last week in Sydney with Alan Meckler, Chairman of Internet.com. He certainly has an insight that I have rarely seen before. It’s a long post, my longest ever, but some of you may find it interesting
A little background. Alan is in his 50s and started internetworld in Mecklermedia after he started an internet email list whilst working in a library in 1990. He sold that 1996 to Penton Media for $274 million USD cash. He also owns a large chunk of internet.com.
1. He is very down to earth and has very strong views. He believes the NASDAQ will bounce up when Juniper hit $30 a share. They are at $38 now.
2. He believes in bricks and clicks and that the AOL/Time Warner merger was a great play for AOL. Maximised their stock price and got the bricks.
3. He believes in deep vertical web sites. Sites that are very focussed and cover the subject matter very deeply is the way to go and that broad portals are doomed. He has a PhD is History and resorts to examples often. His example here is Life magazine that had a readership of over 15 million in the 60s and is now defunct. Niche specialist magazines carved up this broad magazine.
4. It is no accident that the Internet.com brand is secondary to the sites in its network – all deep verticals. – as he believes that broad banding on the internet.com is one of the biggest furphies every peddled to Wall Street and companies that pursue broad branding are doomed.
5. He believes that the press are incorrectly obsessed by banner click through rate declining. He contrasts banners to print ads where the media buyers have no idea of how many readers actually read their ads. Also how many people pick up the phone and order when they see and ad in the paper or TV, rather it is a product branding or awareness exercise. Furthermore he believes that having deep vertical sites he can target banners to a certain audience profile that assists the advertising target his market better. For mine this makes a lot of sense.
6. He believes Wall Street still hasn’t figured it out. He commented that 80% of Yahoo’s traffic is useless and Amazon needs to get back to basics as well. His rationale is that they only make money out of 20% of their activities and these are the ones they should focus on. The dilemma the boards of those companies face is how to tell Wall Street they can’t be all things to all people and not have their stock price at $1.00. His experience in running public companies suggests that they would be better off doing it now, and getting down to business as it will happen anyway.
7. He talks passionately about the Internet and his company and how the downturn in the US economy has necessitated him to downgrade his revenue forecasts and thus his resourcing requirements. I remember thinking that I have rarely cone across someone who has his clarity of thought and feeling a little jealous :)
8. We talk of ways to combine Flash Kit with bricks. So watch out for FK Conferences coming out soon.
