A Niche of One's Own
Forbes ASAP , October 03, 1999
A recent study from Xerox PARC seems to confirm what some critics have long feared: that the Web is fostering not diversity but a "winner-takes-all" world.
The study, by Lada Adamic and Bernardo Huberman, looked at traffic patterns for 60,000 America Online users visiting 120,000 Web sites. It further broke down the traffic to educational (.edu) and sex sites. In all cases, Adamic and huberman found significant skewing. The top 5% of sites (excluding AOL's own) got 75% of the visits; the top 5% of educational sites got nearly 60%; and the top 5% of the adult sites got about 42%.
Reporting on the study in the New York Times, correspondent John Markoff cast it as bad news for the little guys. The results, he wrote, seem "to undermine arguments by some entrepreneurs and technologists that the world Wide Web would be a democratizing force, allowing a large number of relatively equal market contestants to compete on a level playing field."
Adamic and Huberman's results aren't really a big surprise. We all know that a few sites, such as Yahoo and Amazon, account for a huge percentage of total Web clicks -- a fact that helps expalin their tremendous market capitalizations. It's also not terribly surprising that a lot more people visit the top-ranked University of Michigan site (among other factors, its Survey Research Center is a major social science destination) than, say, the site of Grand Valley State. And sites devoted to esoteric fetishes aren't likely to dominate the sex trade.
But Markoff's idealized world of small, equal players is not only unrealistic, it's undesirable. The only way to achieve such a "democratic" result would be to have bland, interchangeable sites, the cyberequivalents of agricultural commodities. No differentiated market looks that way. Just because TV Guide has an enormous circulation doesn't mean there's no room for profitable niche magazines. Indeed, it's much easier to survive as a niche publication. Given enough niches, even a winner-takes-all world produces a lot of winners.
What makes cyberspace democratic isn't that nobody gets big. It's that sites can start small -- entry is cheap and easy -- and that small sites can survive and thrive in particular niches. The importance of links makes the symbiosis between big and small sites even more complex and interesting than the mix of businesses in the rest of the economy. On the verge between large and small. between the general and the specific, we find much of the creativity of life online.
If people find niche sites through Yahoo or go to them to buy books on Amazon, that traffic is good for Yahoo and Amazon. But those high-traffic sites don't turn the Web, as a social or business phenomenon, into a unitary experience. Indeed, any site that relies on links, whether coming in or going out, absolutely depends on the diversity of other sites.
Consider the largest of the large, Yahoo. When Adamic and huberman did their counts, the top 119 sites (0.1% of the total) drew almost a third of all visitors. But if 119 sites were all that mattered -- or were even a third of the sites that mattered -- no one would need Yahoo. Bookmarks and simple keyword searches would suffice. Instead, the value of portals and intelligent searches springs from the plenitude of sites and the diversity of users. Such big players depend on the small ones. Without the links to aggregate, there can be no window onto the Web.
Interestingly, even Web sites that serve as portals for specialty markets are just as dependent on yet more specialized Web sites. When John O'Neill and his three partners started SF Site (www.sfsite.com) in July 1996, they envisioned their venture as an advertising-supported, one-stop shop for science fiction. But they soon discovered that their target advertisersÜscience fiction book publishers and magazinesÜweren't on the Web. High-priced Web design firms in Manhattan had scared them all off.
That presented a dilemma: SF Site couldn't create a portal unless there were science fiction sites to bundle. So the fledgling company decided to fill that gap by creating sites, first for the two leading science fiction magazines, Asimov's and Analog, then for book publishers and a dozen other publications. SF Site charged nothing for these early services, which established science fiction publishing's online infrastructure. With a good reputation as a specialized shop, the company now includes Web design as part of its business model, a complement to the banner ads it runs. "A banner ad has to link back somewhere," says O'Neill.
Crucial to SF Site's success is that its designers create customer back ends on a budget suitable for midlist books; a simple site for a new book can run as little as $1,000 to $2,000. The company would like to handle blockbusters too, but O'Neill is happy to help the small guys."You can sustain a busmess doing that for a dozen authors a month," he says.
SF Site publishes a biweekly e-zine to draw in readers and provides the portal its founders originally envisioned, linking to some 8,000 sites, of which 4,000 to 5,000 are active at any given time. All told, SF Site had 116,000 readers in May.
The site represents a part of the Web that rarely gets discussed: a commercial venture on a relatively small scale for a specialized market. "We're never going to be Yahoo, bringing in 2 million visitors a day," says O'Neill, a Spyglass veteran who splits his time between SF Site and a job as a business development manager for a large corporation. "Much as we hate to admit it, reading is almost a niche market today."
Within its niche, SF Site is taking the Yahoo-Amazon approach -- trying to include everything. If it succeeds in dominating the niche, the site will be the winner in this round of winner takes all. But its traffic would barely show up on a PARC data plot.
The SF Site story suggests that not only don't sites have to be large to succeed, they don't even have to be "category killers." The verge between large and small also encourages boutiques, where visitors are attracted by the proprietor's eye for what's appealing. Instead of expecting visitors to sort through thousands of sites themselves, portal-style boutiques select wares from the Web's vast supply of options. The service that attracts visitors is the skill of the selection.
For now, such boutiques mostly package "content," otherwise known as writing (or sometimes music). In an avalanche of information, the editor's classic tasks -- sorting through possibilities, upholding standards of quality, and figuring out what will interest a particular audience -- become valuable. "People used to say that the great thing about the Internet was that it had no gatekeepers. They were right, of course, except that the worst thing about the Internet is also that there are no gatekeepers," says one such boutique operator, Denis Dutton of Arts & Letters Daily (www.cybereditions.com/aldaily). "The wired world needs good editors more than ever!"
Founded in October 1998, A&L Daily combines an elegantly simple interface -- the site includes just a home page, two pages of archived links, and a couple of info pages -- with interesting writing. Dutton and three editors scour the Web and link to three new articles a day. Each piece gets a provocative blurb to draw in readers. The home page also lists publications, news services, "amusements," and other resources for people who want to do their own scouting. Most of the articles come from well-edited magazines and newspapers, whose staffs and regular audiences are usually much larger than A&L's.
Editorial boutiques like A&L Daily save visitors time. They also offer a useful model for Web commerce. "Editing" is a general skill: knowing your audience and having an intuition about what will please it. That skill applies to tangible goods as well as to writing. As the Web begins to develop more goods/delivery services, the opportunities for cooperation between smaller, specialized sites and large, comprehensive suppliers will increase.
Before that can happen, however, the big suppliers will have to figure out how to make it easy for specialty sites to link to particular items for sale, and how to reward them for doing so. Amazon.com's Associates program is one model. The program, in which member sites link directly to Amazon titles and get a percentage of any sales, has nearly 300,000 affiliates. They range from Yahoo to individually run sites attracting visitors in the dozens. In effect, Amazon serves as a back-end supplier that happens to have a front end as well, sort of a wholesale warehouse with a retail store on the street. The associates act as the kinds of guides to books, videos, or music -- providing both selection and commentary -- that A&L Daily's editors are for online articles.
But if Amazon doesn't carry something, specialty sites probably don't sell it either -- yet. For instance, Outside magazine's site (www.outsidemag.com) is a major destination for outdoor enthusiasts, who often have a keen interest in hiking and camping. The site sells books through Amazon. It also provides useful gear reviews and even features a clever gift-suggestion service: You select a price range and recipient category (e.g., "devoted dayhiker"), and it recommends an appropriate product. But you can't order the suggested gear online. All the site offers is a separate list of gear-company addresses and 800-numbers.
Similarly, Brewit.com, a small site devoted to home beerbrewing, sells books through Amazon. But it can only promise visitors that "there will be lists of local supply shops as well as access to mail order and Internet suppliers." As long as small sites have to do time-consuming research or cut individual deals to offer goods online, e-commerce will be underdeveloped.
For now, the specialty sites are out there, waiting to feed business to the generalists and, by selecting from the big guys, to enhance the service they offer their audiences. When the missing pieces are in place, the traffic from small to large sites will make the high-profile winner-takes-all sites look even more dominant. And social critics will further bemoan the end of the Web's bright promise of equal opportunity.
We've been here before. The verge between the broadly popular and the culturally specific is complex and fertile. But that verge always confuses those who can imagine only winners and losers, segregation or homogeneity, rather than symbiosis and creative exchange.
Thirty years ago, for instance, it was a truism that Western pop would wipe out the wide variety of other music. In a winner-takes-all world, there would be nothing left but the Beatles and their progeny. Global communications meant the end of diversity. The influential ethnomusicologist Alan Lomax gloomily predicted what he called a global "gray-out."
Just the opposite happened. Traditional musicians borrowed elements from Western pop -- rock, jazz, or country -- and generated new musical forms while reinvigorating their old genres. "Western-American cultural influence has generated enormous cultural production, in some cases amounting to near hypercreativity in the popular cultures of the world," writes Harvard sociologist Orlando Patterson, pointing to such examples as "the modernization of the traditional Cameroonian makassi style with the introduction of the acoustic rhythm guitar; the development of the highlife music of Ghana, which fused traditional forms with jazz, rock, and Trinidadian calypso rhythms; the vibrant local modernization of traditional Afro-Arab music in Kenya." Some of the new styles were local; some, such as reggae, became global phenomena. There was no global gray-out.
Nor will there be on the World Wide Web. The high-profile success of a few major sites will, over the long run, enhance the overall environment in which specialized sites can flourish. The verge between large and small produces not homogeneity but plenitude.