[Nettime-bold] The Economist: The Internet sells its soul

["geert" <geert@xs4all.nl>]

(Is the commercial doom right? Perhaps not. The tendency described in the
article below has always existed and could even be traced back to 1993.
Still, there are concrete measures of certain firms taken, such as Yahoo!,
which now seriously start to piss off users. I would like to call on
everyone here to start to withdraw from Yahoo!, especially those who have
lists running there. The adds underneath the each posting are becoming
really huge, much bigger then most of the postings. A few lists that I know
have recently take the courageous step to move their database to
indepedendent servers. That's great. The issue often is that list owners
often do not know reliable servers they can trust which could host their
list. But the point is: there are so many! Maybe we post a list of servers,
ready to receive former Yahoo! groups and make a wider public announcement,
showing that there are viable alternatives to Yahoo! All the best, Geert)

---

The Internet sells its soul
Apr 16th 2002

>From The Economist Global Agenda
http://www.economist.com/agenda/displayStory.cfm?story_id=1085967

A new hard-nosed commercialism is spreading over the Internet. Users are
increasingly being asked to pay for information and services, while
advertising is becoming more intrusive. The backlash has already begun

WHEN times are tough, commercial realities bite hard. Internet users are
increasingly being asked to pay for information, music and other services.
Advertisers, too, have grown more demanding. As a result, the Internet is
being transformed from a vast repository of mostly free content into a
commercial cauldron where almost everything is for sale. Gone are the days
of static banner ads tucked quietly away in the corner of a website. Now
ads leap out from all over the place, obliterating the web page or lurking
below a browser window ready to pounce when it is closed. Even Internet
search terms are up for sale as advertisers bid to have their sites appear
at the top of search-engine listings. As if to confirm the trend, Yahoo!
has just told its millions of users that its revised privacy rules will now
allow it to exploit users' personal information to market its own and
business partners' products and services unless users take the trouble to
opt out by ticking a long list of "preferences".

In retrospect, more aggressive commercialisation of the Internet seemed
bound to happen. As the thousands of dotcoms that have already gone to the
wall discovered, making money on the Internet is not easy-especially from
advertising. Yahoo! might be one of the biggest Internet portals with more
than 230m users, but it is now desperately trying to reduce its reliance on
ad revenues by providing new paid-for services and content. Last week, the
firm posted its fifth consecutive quarterly loss. If users do not go to a
special site in the next 60 days to change their "preferences", they are
likely to be barraged by e-mails, telephone calls and other
direct-marketing material.

Yahoo! says that its sales pitches will be restrained: it plans to send
e-mails and make calls on target groups of users on behalf of advertisers.
But other portals have already gone further and are renting out their
customer lists directly to advertisers. As Internet companies try to wring
more revenue out of their operations, such business strategies are becoming
more attractive. This has handed advertisers a bigger bargaining chip,
which has resulted in ads becoming more intrusive. One of the most popular
new forms of Internet advertising are "pop-up" ads which appear on the
front of a web page whenever it is opened. To close them, users have to
click in the correct place. But that can be hard-the pop-up ad for one
major car producer dashes off across the screen as soon as a mouse-pointer
comes near it.

A more subtle version is "pop-under" advertising. Here the ads appear
behind the browser, waiting for the user to close their browser before
bursting forth. There are also many variations, such as "pop-over" ads
which can cover the entire screen; pop-ups which delay their appearance
until the user has spent a certain period of time looking at the site, and
all sorts of animated ads, some with audio and video files which play
without request. A more menacing variety are ads which attempt to "hijack"
a browser and repeatedly direct it to a specific site, or automatically try
to download a promotional file. Some of these techniques were pioneered by
pornographic sites. Now they are becoming mainstream.

This new flood of advertising is beginning to irritate many users. But the
managers of websites argue that, with advertising revenue so hard to come
by, they have little choice. And yet, enraged customers are not in anyone's
interest. So some companies are trying to strike a balance between grabbing
the attention of users, and infuriating them. For instance, Orbitz, a
Chicago-based travel site, tries to set a limit on its pop-under ads so
that users only see them once a day on the sites where they appear.

A new business is also growing up to provide software that blocks Internet
ads. A program called "Smasher", for instance, claims to stop pop-up ads
and remove from PCs the "cookies" which advertisers and websites plant on
to a user's machine in order to monitor the use of their ads. The cookie
works like a small electronic name-tag. Each time a surfer visits a site or
clicks on an ad, the cookie identifies that person as having visited the
site before or as a newcomer. They can also be used to track what pages a
user visits and any data entered. Such information can be aggregated into
huge direct-marketing databases, creating a composite profile of an
individual web-surfer's habits, often without their knowledge.

If the Internet has a soul, it is the vast pool of information which people
can explore, usually using one of the web's many free search engines. Now
even search engines have become vehicles for marketing products and
gathering information on individual surfers. Someone using the search term
"digital cameras" to search the Internet, for instance, is probably
interested in photography and may be on a shopping expedition. Many
search-engine sites are now auctioning such search terms. The more money
companies are prepared to pay, the higher their websites will appear in the
results.

The pioneer of paid listings is Overture, a Californian firm which has
built a profitable business from a string of partnerships in which its
search results appear on sites such as AltaVista, America Online and
Yahoo!. These paid-for results are sometimes identified as "sponsored
sites" or "featured sites". An advertiser bids an amount which they are
prepared to pay each time a customer clicks on their listing. Those that
bid the most appear closest to the top. Advertisers are presently paying
around 60 cents to get towards the top of the listing for "digital
cameras".

The idea behind paid listings is rapidly spreading. Overture, however, is
now suing Google, one of the Internet's most popular search engines,
alleging that Google's own recently-launched system for auctioning keywords
infringes an Overture patent. Google denies this.

While the Internet's growing commercialisation is unlikely to slow down any
time soon, the most effective strategies and business models are still far
from clear. Aggressive, in-your-face advertising seems to be working, at
least according to many advertisers. They say that their "click-through
rates"-the percentage of visitors to a website who click on an ad-is
greatly increased by the use of pop-ups. One music site claims 15% of
visitors click on its pop-up ads, compared with just 0.3% who click on
stationary banner ads. Other sites claim big increases too. And yet many
people may be clicking on these ads accidentally as they desperately try to
get rid of them. And some sites have become virtually unviewable because of
the barrage of advertising directed at anyone who visits. A user backlash
seems inevitable. But if users do not want to be hounded and harrassed by
advertising, they may have to consider something which most have been loth
to do-paying subscriptions for their favourite sites, just as they do for
newspapers, magazines or cable-TV stations. The Internet may be a
mould-breaking new medium but, like all the media that came before it,
someone has to pay for it, and that usually means, one way or another,
users.



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