Worldata

Internet Profit Report

Your guide to who is making money on the Internet - so you can model success.

Single Issue Price $32.00 U.S.© 1995 Stephen R. Kelly, Inc.

Link Brokerage Business Emerging On The Internet.

As the Internet and the Web develop, there will be new services emerging to aid us in our quest for profits by bringing value to our customers. Some will be bogus, some will be valuable. One of the ones that is seeking to prove its value is the link brokerage business.

As the number of web sites proliferates some people maintain that it will be challenging to keep track of new links that could be beneficial to your web site. Enter the link broker. The link broker will attempt to track and evaluate links that have a benefit to your site and then link them to your site for a fee.

Another potential benefit of the link broker is that it could be a large source of pure revenue for your site. How? By linking your visitors out to complementary sites you could have a new source of pure cash flow. That is assuming your buyers are ultimately willing to buy from the site that is paying you for your link. This is very similar to the rental of a customer list in the non-cyberworld.

This brings us to Roy Schwedelson and his company, Worldata. Worldata is one of the larger mailing list brokers and managers in the United States. Their area of specialization is the high tech market. Roy Schwedelson is the president of Worldata. What Roy and others are starting to do is organize the brokerage of links among the various web sites. This is a development that we, as students of Internet profit, need to keep abreast of.

"One of the things that web site owners have told me they need is a way to bring qualified buyers to their web sites. So Worldata started a new service called Web Connect. We have set up links between Omaha Steaks web site and Sharper Image web site because we feel that they share a similar customer profile.

CD Now, which your reports covered, (reader see December 1995 Issue of Internet Profit Report) has links to the Zima web site because we feel that their buyers have similar demographics. What we are trying to do is create a media buying service for links. We are currently working on ways to measure the links so that the value will be clear to our customers. Our http address and phone number for your readers are:

http://www.worldata.com

(407) 393-8200

Roy's business, Web Connect, is an interesting evolution for making profit on the web. However, the measurement of the value of brokered links will be critical to the success of this type of service.

Smart purchasers of link connections will insist on an accurate count of actual orders precipitated by each link. Hits and clicks will eventually be meaningless. Orders will be everything. Auto by Tel (see first interview in this report) has reached that point in that they are paying their links on a per order basis.

Without some way of proving that the link generates an acceptable profit, ongoing monthly rentals will prove impossible.

Roy is underscoring what the Internet Profit Report has been advocating in each issue. You must seek out complementary links where buyers have demonstrated demand and link to them. Whether you do it yourself, or have a company such as Worldata do it, is a decision you will need to consider.

We have asked Roy to check back in with us in the next few months to give us concrete examples of how his web connect service is building profits for sites on the web. We look forward to having some updates in this evolutionary business.

Roy went on to comment on the need for congress to enact some privacy laws for the Internet in terms of measuring visits. This is unusual for a market oriented businessman to advocate regulation by the government. What he is about to reveal goes well beyond what many people consider to be valid market research. I think you will see why he is concerned after the next few paragraphs.

"There are certain reasons why the Federal Trade Commission should get involved. There are companies right now that are out there invading privacy. There are companies that are offering to look at a person's clickstream history without anybody's permission."

What Roy means by "clickstream history" is potentially every web site you visit, every web page you read, every order you place from the time you turn your computer on to surf the web until the time you turn it off.

"There is a company in Atlanta that is offering to sell your clickstream information or my clickstream information to media buyers for the purpose of marketing. I am not an advocate of the government stepping in but this is similar to the Bork Ruling from the 1980's.

In the 1980's a certain video company proposed selling names of its customers based on the types of videos that the customer rented. Judge Bork, who was asked to review this practice, viewed it as an invasion of privacy. The Bork Ruling stopped this practice.

I think that what you do in the privacy of your home on the Internet should not be available to a marketer without your permission. Not all data available out there is marketing information.

There are four or five firms out there that can track your IP address. They can track your clickstream for a day, a week, or a month. Then they assign you a profile, which you never see. When you go to a web site that has purchased their service, the server at the web site will access their server. It will look up your IP address and your clickstream history. Based on your clickstream history, which you never gave them permission to store, they will show you banners and advertising that they think is what you will buy. This is not the future. This is being done right now. It has been in beta test for the last few months.

Web Connect wants nothing to do with tracking of this type. We think that storing someone's clickstream history without their permission is dangerous. That is why we need the Federal Trade Commission to look into this."

I found Roy's revelation about the covert collection of one's clickstream history to be amazing to say the least. Don't you think that many people would be outraged by the thought of a faceless organization covertly recording their every move made on the Internet? Which brings us to our next interview with two computer security experts.