The Clickable Corporation: Successful Strategies for Capturing the Internet Advantage - Hardcover

Rosenoer, Jonathan; Armstrong, Douglas; Gates, J. Russell

Hardcover

ISBN 10: 0684855534 ISBN 13: 9780684855530

Publisher: Free Press, 1999

Synopsis

Case studies of twenty-five companies that have designed successful Internet projects mark a comprehensive discussion of the marketing possibilities offered by the Internet, based on Arthur Anderson's "Best Practice" techniques, and includes inventive and practical advice. 20,000 first printing.

About this title

About the Author

Jonathan Rosenoer is Director, Electronic Commerce Readiness, in Arthur Andersen's computer risk management practice. He has spent the past decade developing commercial online systems and concentrating on associated business risk and process issues, and is the author of CyberLaw: The Law of the Internet.

Excerpt. © Reprinted by permission. All rights reserved.

Chapter 1

The Future Is Only a Click Away

Now that most of us do business on the Internet, none of us can do business without it.

Remember great travel agents? They were the godsends who saved us from squandering our time punching telephone buttons. Like brilliant sleuths, they penetrated mazes of travel gobbledygook, getting straight answers to the simple question of how we could get from A to Z and back again.

And then, alas, they began disappearing, victims of turmoil in the travel industry. But, wonder of wonders, we may have gained something better. Thanks to the Internet -- the world's most useful do-it-yourself tool -- the best travel agent may, in fact, be sitting right in your chair.

The Internet has changed everything. Today anyone can be his or her own travel agent, easily locating the best fares, flights, hotels, or car rentals in a few minutes of tapping away at the keyboard of a personal computer.

Because millions -- and more millions each day -- routinely access vast banks of travel data at 56K modem speed, customers need not cede control to someone else, as in the past. In a notable shift in power, travelers are increasingly taking charge of the travel business.

So who besides travelers are profiting from this phenomenon? Easy: tens of thousands of Web-savvy businesses, whose customers are the millions of mouse-clicking computer users across the planet. They are clickable corporations -- and the topic of this book.

Clickable corporations are dramatically closing the old gap between themselves and their customers. On the Internet, buyers and sellers can achieve nearly instant rapport. Mutual satisfaction is only a few clicks away.

Microsoft originally planned a CD-ROM of travel information culled from some twenty printed guides and travel magazines. The company simply wanted a piece of the $200 million travel-guide industry, which seemed ripe for a user-friendly alternative to print media.

But Richard Barton, the manager at Microsoft in charge of the project, spotted a bigger opportunity. His idea: Sell not just travel information, but actual travel services online. As he noted, "That's a $200 billion industry."

Microsoft's co-founder, chairman, and chief executive officer, William H. Gates III, approved, and Barton established Expedia's Web site. Launched in 1996, it was an instant hit. Within a year, it boasted 150,000 visitors a month; within two years, that figure had risen twenty-fold. Today, net monthly revenues top $12 million.

Just what services MSN Expedia performs for its obviously pleased customers -- and just where its burgeoning revenues come from -- are detailed in Chapter 2. But Expedia is hardly a special case.

This book argues that the Internet is the business opportunity of the century, an electronic Klondike, a new gold rush for all sorts of companies, provided they can solve the puzzle of how to turn trillions of mouse clicks into solid sales.

In the pages that follow, we profile twenty-five companies that seem to have, in fact, solved the puzzle and opened opportunities for themselves.

But this book is addressed to other companies: the hesitaters. They are the businesses -- thousands of them across the globe -- that remain dubious, confused, or simply uninformed about the Web's ability to sell their products and services.

If your business is among them, you may have good reason for your reluctance. Maybe you tried the Internet and had a difficult experience. Or maybe you just don't want to fool with something you don't know enough about. Or you hesitate to send your credit card number into the ether.

All are valid reasons -- assuming the Web won't be a competitive factor in your industry anytime soon. If that is your assumption, we suggest it is time to think again. In our view, all the evidence confirms that Internet usage will soon -- in five years at most -- dominate every industry in every corner of the world.

The Web is already a planetary infrastructure, like highways and electricity. Now that many of us do business on it, we argue here that none of us will be able to do business without it.

How long can you afford to hold out? That's really for you to analyze -- and carefully. We simply think the time for hesitation was yesterday.

Our own assumption is that most holdouts are either swayed by misconceptions about the Internet or not yet sufficiently briefed about its extraordinary advantages. Let's examine the misconceptions first.

* Nobody makes money on the Web.

The media's frequent stories about the Internet's profitless companies typically overlook the fact that many currently spend more than they earn, because they are building infrastructures from scratch. Wall Street understands: Many Internet startups boast stock-market valuations in significant multiples of their revenues, giving them easy access to the capital they need to grow.

* It doesn't hurt to wait and see.

Many companies prefer to let others in their industry break the trail and cope with the headaches that Internet leaders sometimes encounter. That strategy didn't benefit Barnes & Noble, Inc. It simply watched an Internet-only bookseller, Amazon.com, Inc., seize a strong first-mover advantage (and a market capitalization that tops Borders Group, Inc., and Barnes & Noble combined). Now Barnes & Noble is catching up, but not without paying a price.

* Doing business on the Web costs too much.

It certainly isn't cheap, but many companies say the benefits far outweigh the costs. Autobytel.com, Inc., the leading Internet car-buying site, has seen demand for its services grow from 361,000 purchase orders handled, for all of 1996, to more than 970,000 handled, by the end of the second quarter of 1998. Autobytel.com assures us that its Internet investment has paid for itself many times over. Cisco Systems, Inc., which attributes $500 million savings in annual operating expenses to its networked business model, reports that online sales have resulted in about a 15% increase in account executive and sales engineer productivity. The benefits for Cisco have even spread to the recruiting process, where receiving resumes via the Internet has led to an $8 million recruiting cost reduction.

* Internet customers are vulnerable to theft.

Some holdouts fear losing customers, who worry that Internet intruders will steal their credit card data. If this were an uncontrollable problem -- which it isn't -- scores of the nation's biggest companies would not be conducting millions of credit card transactions, safely and smoothly, round the clock, every day of the week.

* Web sites are vulnerable to competitors.

The perceived fear here is that your site may be picked clean by competitors poaching proprietary information about your customers, products, or services. This isn't the case.

Actually, some Internet companies rather hope their competitors do snoop around their Web sites. Autobytel.com and Coldwell Banker Real Estate Corporation, for example, believe that it makes good business sense to let competitors see what you have for sale.

* The Internet isn't big enough.

More than 100 million people are already online. At the current growth rate, that number will reach one billion within five years -- an order of acceleration and connectivity never seen before. And even in five years, the vast majority of the world's people won't yet have owned computers, much less have gone online, ensuring future Internet growth for years to come. If that isn't a mass market, what is?

So these misconceptions have been dismissed -- or at least addressed. What, then, are the Internet's advantages?

The twenty-five businesses we pr

Edition details

• Publisher: Free Press
• Publication date: 1999
• Language: English
• ISBN 10: 0684855534
• ISBN 13: 9780684855530
• Binding: Hardcover
• Edition number: 1
• Number of pages: 172