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The Great Internet Portal Shake-Out: A Battle for Eyeballs

Strategic Insights

— 2 min read

The Internet has become a battleground for multi-billion dollar companies vying for users' attention. Portals like Yahoo!, AOL, and MSN are battling to capture the most surfers, with the goal of securing lucrative advertising banners and sponsorships. This intense competition has led to a frenzy of takeovers, with companies like Yahoo! spending billions to acquire new assets. The stakes are high, with the potential for billion-dollar losses and gains.

Key Takeaways:

  • Yahoo! has acquired several companies, including Broadcast.com, GeoCities, ViaWeb, Yoyodyne Entertainment, HyperParallel, and WebCal, to enhance its portal services.
  • AOL has made significant purchases, including CompuServe, Netscape, Mirabilis, and When Inc., to strengthen its online presence.
  • Microsoft has created a string of Web sites, including Microsoft.com, MSN, Expedia, and MSNBC, and has acquired companies like Hotmail, Link Exchange, and Electric Gravity.
  • Excite has taken over the Webcrawler search engine, Magellan, NetBot, MatchLogic, and Classifieds 2000, and has been acquired by AtHome.
  • Lycos has picked up several companies, including WhoWhere, Angelfire, Tripod, GlobeComm's iName, and Wired Digital, to expand its portal services.
  • Portal players are aware that the game is not even half over, with millions of potential users still to come online in the next five years.
  • TV networks like ABC, Disney, and ESPN are building their Internet presence through portals like Go, which has 20 million users and is aiming to attract the next 50 million people to come online.
  • Lycos is merging with USA Networks and its television channels, including the Sci-Fi Channel and QVC Home Shopping Network, to create a combined company with top Web site rankings and significant TV and online presence.

Statistics:

  • AOL has 16 million subscribers, generating significant income from paid subscriptions.
  • Yahoo! has reported $86 million in revenues for the first three months of this year, three times last year's figure.
  • Yahoo!'s operating profits jumped from $2.6 million to $20.6 million in the same period.
  • AOL and Microsoft both have substantial incomes from other businesses, including sales of personal computer software and subscriptions.
  • Microsoft has set its Internet Explorer (IE) browser to direct traffic to its MSN portal, while paying some PC manufacturers to set Yahoo! as the default home page.
  • The merger between Lycos, USA Networks, and their TV channels will create a combined company with four of the top 20 Web sites, 19 online city guides, the Internet Shopping Guide, and First Auction site.
  • The combined company will reach 70 million homes with TV sets and handle over a million telephone sales per day.

Sources:

  • Jack Schofield, "Microsoft, AOL, Yahoo! and - are locked in a multi-billion dollar battle to give you something for nothing", The Register, no date provided.
  • Jeff Mallett, president and chief operating officer of Yahoo!, as quoted in The Register.
  • Chris Charron, research director at Forrester Research, as quoted in The Register.
  • Barry Parr, director of the Internet and e-commerce strategies programme at International Data Corporation, as quoted in The Register.
  • Harry Motro, chief executive officer of Infoseek, as quoted in The Register.

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