by Tom Snyder on Nov 30, -0001


The impressive ad in the paper promises a path to online riches that starts at a modestly priced seminar at a local hotel and ends with you buying space in an online mall. A well-dressed entrepreneurial type asks you for your business card while you’re shopping at the local computer store. He calls you a couple days later to invite you to see an incredible new online opportunity that will enable you to tap into the power of the Internet with what turns out to be a Multi-level marketing-based shopping mall. An ad on a radio talk show offers a “space” in an online shopping mall for dollars a month. All of them sound good, and only require an investment that is touted as puny compared to all the money you’ll make by being “on the ‘Net.”

Too good to be true? Depends which side of the opportunity you’re on. The guys selling the space who talk a good line will make a bundle… off the gullible ones who believe them! If you’re being sold the space in the mall, you might as well kiss your money good bye.

We’ve been criticizing the online shopping mall concept for four years. We, and the other critics of the concept, have been vindicated by the failure of virtually all the biggest e-malls to produce the results they hoped for (and promised their tenants). The pitch promises one-stop shopping… everyone’s favorite merchandise, from the best-known manufacturers, all in one place… and if you put a home page there, too, you’ll benefit from the traffic. The bad news is this: while this may describe their mall, it also describes the Internet itself. And if you think your little home page will attract the teaming millions just because it’s in either, you’ll find out soon enough (and sadly enough) that you’re wrong.

So what’s an aspiring capitalist to do?

The online mall concept breaks down because it offers nothing that the Internet itself doesn’t (i.e. the cyberspace version of a message in a bottle, thrown out to sea in hopes that someone – anyone – might find it). However, a slight variation on that theme is actually the next big growth opportunity because it exploits the main weakness of the Web: the inability for people to find what they want. The opportunity is called a vortal, or vertical market portal, and in the next year, you’ll be seeing some huge IPO’s exploding out of this category.

Before we define a vortal, we must define its predecessor, the portal.

Portal sites have been around since the Web’s infancy – Yahoo is probably the most famous. A portal is a hierarchically designed, well-organized site, that contains links, articles, search engines and intuitive interactivity, designed to help people find what they’re looking for on the Web. A vortal is a portal, too. But what makes it different is that it works a vertical market. Also referred to as vertical trade communities or Net marketplaces, vortals are gathering places where employees, trade associations, or just groups of people with commin interests can get topic or industry-specific news updates, events calendars, the latest
research and statistics, join discussion groups, participate in auctions and engage in various e-business services related specifically to their specific profession or discipline.

The Gartner Group estimates 300 Internet-based marketplaces have been launched to date, serving such industries as chemicals, electronics, food services, office supplies and steel. And Gartner anticipates that number will jump to 10,000 within a year or two. Who will be responsible for these vortals? People looking
for an Internet opportunity, who may not have a product of their own to sell, but have a wealth of information (and a passion) for a specific marketplace, industry or interest.

We have several clients who have already begun to pursue development and construction of vortals that will take advantage of their expertise in their fields. They’ve written their business plans, are seeking the investors and are looking toward being the hot new Internet IPO in a year or two.

How do vortals make money? The income opportunities are as varied and endless as your own creativity… subscriptions, banners, (CPM or clickthroughs), pay-per-event fees, auction commissions, hosting reselling, and, yes, even selling “mall-space” in your vortal.

Yes, we did say “mall-space.” But here’s the qualifier. This mall-space makes sense in a vortal because the site is extremely targeted… People are not just going to this site to “buy stuff.” They are pre-qualified partisans and repeat visitors for the specific products or services the site has to offer. Many of them will even (by their own choice or their boss’ mandate) make the vortal the start page that comes up when they fire up their browser. The site is an incredible resource of information about that product and service, so it makes sense for them to be there.

The one warning for you to reinforce to anyone that may be interested in mall-space in your vortal is that the space would not take the place of their company’s bona-fide Web site.

And that goes for you, too. In all the vortal frenzy, make sure that your primary Web site is still being updated, promoted, administered and monitored properly and effectively. Remember that your current company and its Web presence are your bread and butter. But remain open to the new opportunities the Web is providing. Don’t be fooled. Don’t be persuaded. And don’t waste your money or energy in a mall.