Continuing a trend which began in 1998 and is reshaping the terrain of the Web, yet another of the premier Internet portal sites was bought out by a larger company this week. On Tuesday, high speed Internet access company @Home said it would acquire Excite, the Redwood City, California company which, like its better-known competitor, Yahoo!, was started by a group of enterprising university students.
Portal sites are large Web supersites which conglomerate a range of services like news headlines, free email, weather, online shopping links and stock quotations. They've been held in some disdain by more experienced Web users, who often see them as the strip malls of the Internet - a bit commercial, soulless and bland, happy to hand-hold the Net "newbie". But many old-timers like them for the personalised information they can offer.
Most portals began life as Net search engines, often quite small sites based out of university computer science departments. As the Web took off, so did the fortunes of the search sites like Yahoo!, Infoseek, Lycos and Excite. Yahoo! has surprised many by posting good results over the past year, and Excite has begun to steam along as well, but many portal companies are being buoyed by the general Internet stock fever, in which company valuation pays little regard to income, revenue or expenditure.
In the uncertain world of the Web, though, the old search engines proved they could attract visitors because everyone needs some help at some time in finding something online. In a young medium, search engines demonstrated longevity. The problem was, the Web economy dictates that users will not pay for information, and search sites needed to find ways of making money.
The method which has worked for several is to become a portal, add more features, buy up sites which can add value to the basic search site. Excite was one of the first search sites to do this, offering a customisable, personalised homepage which users could create to track their own choice of news interests, stock quotations, regional weather, and so on. Excite's success with this model encouraged others to jump in.
Then the problem became one of funding. Adding services, especially by acquiring smaller companies which offer niche services, takes deep pockets. At about the same time, the large, so-called "old media" companies like Disney were looking for ways of getting into online media by buying in existing expertise rather than trying to create it from scratch.
At the same time, large telecommunications companies which already had a stake in the Web through offering Internet connections to users were growing interested in acquiring "content" as well.
Last year produced a rash of shotgun marriages between search engines, media companies and telecommunications powerhouses. Disney snapped up Infoseek. America Online plans to merge with Netscape - which in the past year has created a strong portal site - and has just announced a deal with several telecommunications companies to offer high-speed Internet access to its subscribers. Now, there's @Home and Excite - and telecommunications giant AT&T plans to acquire cable company Tele-Communications Inc, which is @Home's parent.
The one large portal site which hasn't made one of these colossal partnerships is Lycos. However, Lycos has been busy hoovering up smaller content companies and search engines. In its most high-profile deal last autumn, it scooped up the former Wired magazine online arm, Wired News, Wired's popular search engine, HotBot, and the satirical emagazine Suck.com. Lycos now terms itself a "network", not a portal, because its many varied content properties all maintain a separate identity. Lycos clearly hopes the network model will take over from portals, placing them in the supersite lead. Regardless of whether that happens, Lycos is certainly ripe for a deal with a telecommunications or media company sugar daddy.
