Thursday, June 30, 2005
Yahoo Stops User-Created Chat Following Sex Report
Yahoo has shut down dozens of Internet chat rooms after questions were raised about whether the sites were being used by adults to lure minors into sexual encounters. The portal also removed a feature that lets users create their own chat rooms in Yahoo's popular chat community area, but Yahoo-sponsored and monitored sites remain up and running. The case highlights how Yahoo and others find themselves wrestling with the balance of freedom of speech and its responsibility to ensure the safety of it Web community.
While legal precedent generally protects Web entities from illegal activities of their users, recent lawsuits have raised new questions about the level of responsibility that a portal like Yahoo can and should exert over how members use its networks. Yahoo said it was unable to give an exact number of how many chat rooms would be impacted, since the number that are operating varies from day to day. A note on the Yahoo Chat page about the sites said that they are "currently unavailable. We are working on improvements to these sites to enhance the user experience and compliance with our terms of service."
The terms of use for Yahoo Chat include agreement among users to not "harm minors in any way" or to use the forums to propagate content that is "unlawful, harmful, threatening, abusive, harassing, tortious, defamatory, vulgar, obscene, libelous, ... or otherwise objectionable." The move comes after a Houston television station aired a report showing that chat rooms with names such as "Girls 13 And Under For Older Guys" were being created in areas that were designated for school-related chat. The same TV station, KPRC, said several major advertisers -- including State Farm insurance , Georgia-Pacific and Pepsi -- pulled ads from the chat area of the Yahoo networks after they were contacted as part of the story and told their display ads were found alongside those questionable chat rooms.
Whether or not the move harkens a shift in the online world toward more intervention by those who manage chat networks and other sites where people are encouraged to freely express themselves is open for debate. For one thing, Yahoo might be especially edgy about the issue of children's safety online after being named in May as a co-defendant in a US$10 million lawsuit filed by a parent against the portal and a man who allegedly used a site on Yahoo Groups to swap child pornography.
Around the same time, it was hit with a lawsuit from a woman who said the portal failed to follow through on a promise to remove nude photos of her posted by her husband in a chat room user profile. The decision to end user-created chat has irked many of the users of Yahoo Chat, some of whom say millions of legitimate chat users are being punished for the actions of a few who used the site for illicit purposes. Peter J. Carr, publisher of the Chatmag.com Webzine said Yahoo could address the problems in other ways. Carr said many Yahoo-created chat rooms are now considered unusable by some longtime chatters because they are dominated by "adbots" that generate messages with links to commercial sites, some of them pornographic in nature.
"Yahoo can still be a good chat environment, if Yahoo implements chat moderators, and proactively deletes chat rooms of a questionable nature, most specifically, any pedophile related or hate group chat rooms," Carr said.
The debate over the Yahoo case hints at a larger question of how much responsibility Web companies have to ensure their properties are not being used for illicit activity. In the past, asking users to agree to a strict terms of service has been seen as protection for Web sites, which have maintained that they are unable to monitor everything that occurs on their networks due to the sheer volume of information being swapped every minute. Yahoo has found itself in the crosshairs of that debate for years. The most high-profile example came in Europe, where the portal fought a years-long legal battle over whether it should be held liable for a user's decision to post Nazi memorabilia for sale on its auction site. The selling of Nazi paraphernalia is banned in France.
EBay has likewise been called on the carpet for what its members do and often moves to take action, for instance banning the sale of 9-11-related items in the wake of the terrorist attacks on the U.S. on Sept. 11, 2001. Enabling the formation of informal networks of like-minded users was one of the first uses of the Internet in its earliest days, even before the creation of the World Wide Web. Dozens of law enforcement sting operations have focused on user groups and message boards in the past.
However, Carr doesn't believe that even a stringent crack down on content or strict monitoring will curtail the use of online chat rooms. He said many people can point to friendships and other relationships formed in such places and that have lasted for years. "Internet chat will suffer little due to the current problems at Yahoo," he added. "There are numerous chat sites, and as long as people want to communicate, chat will be an active part of the Internet experience."
Guardian eCommerce Safe Site Privacy Seal Program.
While legal precedent generally protects Web entities from illegal activities of their users, recent lawsuits have raised new questions about the level of responsibility that a portal like Yahoo can and should exert over how members use its networks. Yahoo said it was unable to give an exact number of how many chat rooms would be impacted, since the number that are operating varies from day to day. A note on the Yahoo Chat page about the sites said that they are "currently unavailable. We are working on improvements to these sites to enhance the user experience and compliance with our terms of service."
The terms of use for Yahoo Chat include agreement among users to not "harm minors in any way" or to use the forums to propagate content that is "unlawful, harmful, threatening, abusive, harassing, tortious, defamatory, vulgar, obscene, libelous, ... or otherwise objectionable." The move comes after a Houston television station aired a report showing that chat rooms with names such as "Girls 13 And Under For Older Guys" were being created in areas that were designated for school-related chat. The same TV station, KPRC, said several major advertisers -- including State Farm insurance , Georgia-Pacific and Pepsi -- pulled ads from the chat area of the Yahoo networks after they were contacted as part of the story and told their display ads were found alongside those questionable chat rooms.
Whether or not the move harkens a shift in the online world toward more intervention by those who manage chat networks and other sites where people are encouraged to freely express themselves is open for debate. For one thing, Yahoo might be especially edgy about the issue of children's safety online after being named in May as a co-defendant in a US$10 million lawsuit filed by a parent against the portal and a man who allegedly used a site on Yahoo Groups to swap child pornography.
Around the same time, it was hit with a lawsuit from a woman who said the portal failed to follow through on a promise to remove nude photos of her posted by her husband in a chat room user profile. The decision to end user-created chat has irked many of the users of Yahoo Chat, some of whom say millions of legitimate chat users are being punished for the actions of a few who used the site for illicit purposes. Peter J. Carr, publisher of the Chatmag.com Webzine said Yahoo could address the problems in other ways. Carr said many Yahoo-created chat rooms are now considered unusable by some longtime chatters because they are dominated by "adbots" that generate messages with links to commercial sites, some of them pornographic in nature.
"Yahoo can still be a good chat environment, if Yahoo implements chat moderators, and proactively deletes chat rooms of a questionable nature, most specifically, any pedophile related or hate group chat rooms," Carr said.
The debate over the Yahoo case hints at a larger question of how much responsibility Web companies have to ensure their properties are not being used for illicit activity. In the past, asking users to agree to a strict terms of service has been seen as protection for Web sites, which have maintained that they are unable to monitor everything that occurs on their networks due to the sheer volume of information being swapped every minute. Yahoo has found itself in the crosshairs of that debate for years. The most high-profile example came in Europe, where the portal fought a years-long legal battle over whether it should be held liable for a user's decision to post Nazi memorabilia for sale on its auction site. The selling of Nazi paraphernalia is banned in France.
EBay has likewise been called on the carpet for what its members do and often moves to take action, for instance banning the sale of 9-11-related items in the wake of the terrorist attacks on the U.S. on Sept. 11, 2001. Enabling the formation of informal networks of like-minded users was one of the first uses of the Internet in its earliest days, even before the creation of the World Wide Web. Dozens of law enforcement sting operations have focused on user groups and message boards in the past.
However, Carr doesn't believe that even a stringent crack down on content or strict monitoring will curtail the use of online chat rooms. He said many people can point to friendships and other relationships formed in such places and that have lasted for years. "Internet chat will suffer little due to the current problems at Yahoo," he added. "There are numerous chat sites, and as long as people want to communicate, chat will be an active part of the Internet experience."
Guardian eCommerce Safe Site Privacy Seal Program.
Wednesday, June 29, 2005
Hotmail Implements Sender ID To Thwart Spam
Putting its own anti-spam technology to work -- and possibly hoping to highlight its effectiveness -- Microsoft has begun to use Sender ID to divert questionable messages away from the e-mail inboxes of Hotmail account holders. Microsoft has begun verifying e-mail origins with its Sender ID framework, a technology the company developed and hopes to see adopted as an industry-wide standard for authenticating messages. Users of Hotmail, the free Web e-mail service offered through Microsoft's MSN portal, are being alerted when messages sent to their addresses are diverted into their Junk Mail folder or being deleted entirely because Sender ID could not verify that a message was actually sent from the domain claimed in the "from" field and other parts of the message.
Microsoft began notifying Internet service providers (ISPs) of the implementation this week.
The technology is being rolled out despite concerns from security experts and others, who believe that thousands of legitimate messages might be swept into "junk" mailboxes along with true spam. It's also drawing criticism because it requires senders of messages to employ compatible technology, a move seen by some as a strong-arm tactic to boost Sender ID adoption in the face of considerable resistance. In an interview on the Microsoft Web site, Craig Spiezle, a director in the Technology Care and Safety group at Microsoft, said the move would protect both consumers and legitimate online businesses from both commercial spam and more sinister unwanted messages, such as phishing attacks.
"Not only are consumers at risk of losing their privacy and financial assets, but legitimate businesses that have had their name and e-mail domains used in phishing schemes often are faced with damage to the reputation of and trust in the brand name they've worked so hard to establish," Spiezle said. "It's critically important that the industry and businesses work together to help protect people and organizations from these concerns and help restore confidence in electronic messaging and e-commerce."
In order to ensure deliver of mail, senders have to publish so-called sender policy frameworks. Microsoft claims that around 1 million domains currently publish SPF records, which still leaves more than 70 million registered domains uncovered by the technology, though some analysts say as much as 30 percent of all e-mail carries Sender ID information.
Spiezle also described the Sender ID push as a "to action for domain holders and e-mail senders to publish their SPF records to help protect their brands and maximize the deliverability and reliability of their e-mail." Though designed to cut down on spam, the service could in fact force users to check their junk mailboxes more frequently to ensure that legitimate messages aren't being sent there incorrectly.
Microsoft's efforts to get Sender ID recognized as a worldwide standard for curbing spam have had mixed results, with some ISPs first adopting then later abandoning the technology. Some have cited the rise of alternatives, such as Yahoo's DomainKeys approach and IBM's Fair Use of Unsolicited Commercial E-mail, or FairUCE.
Last fall, the Internet Engineering Task Force dissolved a working group on Sender ID, saying it could not reach consensus on some key issues around implementation. Whatever method emerges as the leader, Forrester Research analyst Jonathan Penn said the various validation technologies are seen as a key tool to fighting spam and have the power to tilt the battlefield in favor of consumers and legitimate businesses in a way that few other technological or legal approaches have. "It's traditionally been too easy for spammers to hide their identities," Penn said.
That likely explains Microsoft's eagerness to be at the forefront of the verification movement. Analysts noted that by requiring Sender ID to ensure delivery to its millions of users, Microsoft is leveraging the popularity of Hotmail to increase uptake of Sender ID. Though some greet its efforts with skepticism given its spotty record on security issues, Microsoft has been at the forefront of anti-spam efforts in a number of ways, forging alliances with other Web service providers and leading the charge into court to sue spammers or help law enforcement bring criminal charges. In fact, Yankee Group analyst Laura DiDio said that if Sender ID had been put forth by another company with a different reputation or grew out of the open-source movement, the reception might have been much different. "The presence of Microsoft creates a fear factor about ulterior motives among the rest of the tech community," DiDio said. That's especially true in times when open-source approaches are gaining increasing favor as a way of making disparate technologies work together.
For more information, please visit Guardian eCommerce.
Microsoft began notifying Internet service providers (ISPs) of the implementation this week.
The technology is being rolled out despite concerns from security experts and others, who believe that thousands of legitimate messages might be swept into "junk" mailboxes along with true spam. It's also drawing criticism because it requires senders of messages to employ compatible technology, a move seen by some as a strong-arm tactic to boost Sender ID adoption in the face of considerable resistance. In an interview on the Microsoft Web site, Craig Spiezle, a director in the Technology Care and Safety group at Microsoft, said the move would protect both consumers and legitimate online businesses from both commercial spam and more sinister unwanted messages, such as phishing attacks.
"Not only are consumers at risk of losing their privacy and financial assets, but legitimate businesses that have had their name and e-mail domains used in phishing schemes often are faced with damage to the reputation of and trust in the brand name they've worked so hard to establish," Spiezle said. "It's critically important that the industry and businesses work together to help protect people and organizations from these concerns and help restore confidence in electronic messaging and e-commerce."
In order to ensure deliver of mail, senders have to publish so-called sender policy frameworks. Microsoft claims that around 1 million domains currently publish SPF records, which still leaves more than 70 million registered domains uncovered by the technology, though some analysts say as much as 30 percent of all e-mail carries Sender ID information.
Spiezle also described the Sender ID push as a "to action for domain holders and e-mail senders to publish their SPF records to help protect their brands and maximize the deliverability and reliability of their e-mail." Though designed to cut down on spam, the service could in fact force users to check their junk mailboxes more frequently to ensure that legitimate messages aren't being sent there incorrectly.
Microsoft's efforts to get Sender ID recognized as a worldwide standard for curbing spam have had mixed results, with some ISPs first adopting then later abandoning the technology. Some have cited the rise of alternatives, such as Yahoo's DomainKeys approach and IBM's Fair Use of Unsolicited Commercial E-mail, or FairUCE.
Last fall, the Internet Engineering Task Force dissolved a working group on Sender ID, saying it could not reach consensus on some key issues around implementation. Whatever method emerges as the leader, Forrester Research analyst Jonathan Penn said the various validation technologies are seen as a key tool to fighting spam and have the power to tilt the battlefield in favor of consumers and legitimate businesses in a way that few other technological or legal approaches have. "It's traditionally been too easy for spammers to hide their identities," Penn said.
That likely explains Microsoft's eagerness to be at the forefront of the verification movement. Analysts noted that by requiring Sender ID to ensure delivery to its millions of users, Microsoft is leveraging the popularity of Hotmail to increase uptake of Sender ID. Though some greet its efforts with skepticism given its spotty record on security issues, Microsoft has been at the forefront of anti-spam efforts in a number of ways, forging alliances with other Web service providers and leading the charge into court to sue spammers or help law enforcement bring criminal charges. In fact, Yankee Group analyst Laura DiDio said that if Sender ID had been put forth by another company with a different reputation or grew out of the open-source movement, the reception might have been much different. "The presence of Microsoft creates a fear factor about ulterior motives among the rest of the tech community," DiDio said. That's especially true in times when open-source approaches are gaining increasing favor as a way of making disparate technologies work together.
For more information, please visit Guardian eCommerce.
Tuesday, June 28, 2005
Market for Stolen Credit Data Thrives Online
"Want drive fast cars?" asks an advertisement in broken English atop the Web site iaaca.com. "Want live in premium hotels? Want own beautiful girls? It's possible with dumps from ZoOmer."
A "dump," in the blunt vernacular of a relentlessly flourishing online black market, is a credit card number. And what ZoOmer is peddling is stolen account information name, billing address, phone for Gold Visa cards and MasterCards, at $100 apiece. It is not clear whether any information stolen from CardSystems Solutions, the U.S. payment processor that was reported on Friday to have exposed 40 million credit card accounts to possible theft, has entered this black market.
But law enforcement officials and security experts say it is a safe bet that it will eventually be peddled at sites like www.iaaca.com, its very name a swaggering shorthand for International Association for the Advancement of Criminal Activity. Despite years of security improvement and tougher, more coordinated law enforcement efforts, the information that criminals siphon -- credit card and bank account numbers and whole buckets of raw consumer information -- is boldly hawked on the World Wide Web.
Its value arises from its ready conversion into online purchases, counterfeit card manufacture or more elaborate identity-theft schemes. The online trade in credit card and bank account numbers, as well as other consumer information, is highly structured. There are buyers and sellers, intermediaries and even service industries. The players come from all over the world, but most of the Web sites where they meet are run from computer servers in the former Soviet Union, making them difficult to police.
A wealth of institutional knowledge and shared wisdom is doled out to newcomers seeking entry into the market, like how to move payments and the best time of the month to crack an account.
In the United States alone, the Federal Trade Commission estimates, about 10 million Americans have their personal information pilfered and misused in one way or another every year, costing consumers $5 billion and businesses $48 billion annually. "There's so much to this," said Jim Melnick, a former Russian affairs analyst for the Defense Intelligence Agency, now the director of threat development at iDefense , a company in Reston, Va., that tracks cybercrime. "The story that needs to be told is the larger, long-term threat to the American financial industry. It's a cancer. It's not going to kill you now, but slowly, over time."
It is not clear just how many cards and account numbers actually make it to the Internet auction block, but law enforcement agents consistently describe the market as huge. Every day, at sites like www.iaaca.com and carderportal.org, pseudonymous vendors conduct business in an arcane slurry of acronyms. Alongside advertisements for various scams are pitches from code writers who sell their services to con artists known as phishers, who contract with spammers to send out millions of increasingly sophisticated phony e-mails designed to lure victims into revealing account information.
A phishing operation might bring in thousands of account numbers along with other identifying details: names, addresses, phone numbers, passwords, mothers' maiden names. The richer the detail, and the higher the account balance, the better the asking price. According to Mark Rasch, a former chief of cyberinvestigations for the Justice Department and now the senior vice president of Solutionary , a computer security company, the numbers taken in the CardSystems breach -- at least 200,000 are said to have been in the stolen files -- are almost certain to end up in one of these trading venues.
CardSystems represented a vital hub through which millions of account numbers passed. ChoicePoint, a data aggregator, was another gold mine; it announced in February that thousands of records had been downloaded from its databases by thieves posing as legitimate business clients no hacking required. For all the information that law enforcement and security experts can glean from sites like www.iaaca.com, "there are whole marketplaces of bulletin board systems and chats that are invisible," Rasch said. Still, law enforcement says it has made inroads. In October, the Justice Department and the Secret Service announced the internationally coordinated arrests of 28 people in eight U.S. states and several other countries, including Sweden, England, Poland, Belarus and Bulgaria.
Among those arrested were the alleged ringleaders of www.shadowcrew.com, the largest English-language Web bazaar trading in stolen credit card, debit card and bank account numbers, counterfeit drivers' licenses, passports and Social Security cards, according to the Justice Department. The investigation broke up a 4,000-member underground that, the department says, bought and sold nearly 2 million credit card account numbers in two years and caused more than $4 million in losses to merchants, banks and individuals.
But eight months later, the traders have adapted and resumed business, though they seem a bit more wary now, said John Watters, chief executive of iDefense, which generates cybercrime intelligence for government and financial industry clients. "The next battle will be substantially harder," Watters said. "It's getting harder for us to do our job." Asked at a symposium late last month whether law enforcement was losing the battle against cybercriminals, Brian Nagel, assistant director for investigations at the U.S. Secret Service, said no.
But another panel member, Jody Westby, managing director for security and privacy practice at PricewaterhouseCoopers, disagreed, insisting that, based on Federal Trade Commission statistics on identity and credit card theft, only about 5 percent of cybercriminals are ever caught.
Westby offered a bleak assessment. "We're not making an impact," she said. "The criminals are too hard to track and trace, too hard to prosecute, and the information they steal is too easy to use."
Brought to you by the Guardian eCommerce Privacy Seal Program.
A "dump," in the blunt vernacular of a relentlessly flourishing online black market, is a credit card number. And what ZoOmer is peddling is stolen account information name, billing address, phone for Gold Visa cards and MasterCards, at $100 apiece. It is not clear whether any information stolen from CardSystems Solutions, the U.S. payment processor that was reported on Friday to have exposed 40 million credit card accounts to possible theft, has entered this black market.
But law enforcement officials and security experts say it is a safe bet that it will eventually be peddled at sites like www.iaaca.com, its very name a swaggering shorthand for International Association for the Advancement of Criminal Activity. Despite years of security improvement and tougher, more coordinated law enforcement efforts, the information that criminals siphon -- credit card and bank account numbers and whole buckets of raw consumer information -- is boldly hawked on the World Wide Web.
Its value arises from its ready conversion into online purchases, counterfeit card manufacture or more elaborate identity-theft schemes. The online trade in credit card and bank account numbers, as well as other consumer information, is highly structured. There are buyers and sellers, intermediaries and even service industries. The players come from all over the world, but most of the Web sites where they meet are run from computer servers in the former Soviet Union, making them difficult to police.
A wealth of institutional knowledge and shared wisdom is doled out to newcomers seeking entry into the market, like how to move payments and the best time of the month to crack an account.
In the United States alone, the Federal Trade Commission estimates, about 10 million Americans have their personal information pilfered and misused in one way or another every year, costing consumers $5 billion and businesses $48 billion annually. "There's so much to this," said Jim Melnick, a former Russian affairs analyst for the Defense Intelligence Agency, now the director of threat development at iDefense , a company in Reston, Va., that tracks cybercrime. "The story that needs to be told is the larger, long-term threat to the American financial industry. It's a cancer. It's not going to kill you now, but slowly, over time."
It is not clear just how many cards and account numbers actually make it to the Internet auction block, but law enforcement agents consistently describe the market as huge. Every day, at sites like www.iaaca.com and carderportal.org, pseudonymous vendors conduct business in an arcane slurry of acronyms. Alongside advertisements for various scams are pitches from code writers who sell their services to con artists known as phishers, who contract with spammers to send out millions of increasingly sophisticated phony e-mails designed to lure victims into revealing account information.
A phishing operation might bring in thousands of account numbers along with other identifying details: names, addresses, phone numbers, passwords, mothers' maiden names. The richer the detail, and the higher the account balance, the better the asking price. According to Mark Rasch, a former chief of cyberinvestigations for the Justice Department and now the senior vice president of Solutionary , a computer security company, the numbers taken in the CardSystems breach -- at least 200,000 are said to have been in the stolen files -- are almost certain to end up in one of these trading venues.
CardSystems represented a vital hub through which millions of account numbers passed. ChoicePoint, a data aggregator, was another gold mine; it announced in February that thousands of records had been downloaded from its databases by thieves posing as legitimate business clients no hacking required. For all the information that law enforcement and security experts can glean from sites like www.iaaca.com, "there are whole marketplaces of bulletin board systems and chats that are invisible," Rasch said. Still, law enforcement says it has made inroads. In October, the Justice Department and the Secret Service announced the internationally coordinated arrests of 28 people in eight U.S. states and several other countries, including Sweden, England, Poland, Belarus and Bulgaria.
Among those arrested were the alleged ringleaders of www.shadowcrew.com, the largest English-language Web bazaar trading in stolen credit card, debit card and bank account numbers, counterfeit drivers' licenses, passports and Social Security cards, according to the Justice Department. The investigation broke up a 4,000-member underground that, the department says, bought and sold nearly 2 million credit card account numbers in two years and caused more than $4 million in losses to merchants, banks and individuals.
But eight months later, the traders have adapted and resumed business, though they seem a bit more wary now, said John Watters, chief executive of iDefense, which generates cybercrime intelligence for government and financial industry clients. "The next battle will be substantially harder," Watters said. "It's getting harder for us to do our job." Asked at a symposium late last month whether law enforcement was losing the battle against cybercriminals, Brian Nagel, assistant director for investigations at the U.S. Secret Service, said no.
But another panel member, Jody Westby, managing director for security and privacy practice at PricewaterhouseCoopers, disagreed, insisting that, based on Federal Trade Commission statistics on identity and credit card theft, only about 5 percent of cybercriminals are ever caught.
Westby offered a bleak assessment. "We're not making an impact," she said. "The criminals are too hard to track and trace, too hard to prosecute, and the information they steal is too easy to use."
Brought to you by the Guardian eCommerce Privacy Seal Program.
Monday, June 27, 2005
Google CEO Says New Service Won't Compete with PayPal
Google CEO Eric Schmidt yesterday denied recent media and analyst reports that the online search engine leader is gearing up to compete directly with eBay's pioneering PayPal service, although he acknowledged some kind of electronic payment product is in the works. Although he declined to provide any details about the project, Schmidt made it clear it won't trespass on PayPal's turf. "We do not intend to offer a person-to-person, stored-value payments system," Schmidt said during an interview with The Associated Press.
That description fits PayPal, a 6-year-old service that creates "digital cash" by accepting credit card payments from its users and then delivering the payments to a designated recipient. The recipient then can either get real cash or leave all or part of the balance in a PayPal account for future transactions. As e-commerce has blossomed, PayPal has thrived, growing from 24 test users in 1999 to 72 million accountholders through March. Looking to profit from the fees that PayPal collects from completing online transactions, San Jose-based eBay bought the service for $1.3 billion in 2002.
The Internet industry began buzzing about the possibility of Google competing with PayPal after the subject surfaced last week during an e-commerce conference hosted by Piper Jaffray. The Wall Street Journal subsequently reported Google hoped to roll out a rival payment service later this year, quoting people familiar with the company's plans. Other media outlets, including The Associated Press, followed up with similar stories and stock market analysts released reports mulling the possible financial consequences of a showdown between Google and eBay, one of the search engine's biggest advertisers. Google consistently declined comment until Schmidt tried to set the record straight yesterday.
The Mountain View, Calif.-based company's recent incorporation of a subsidiary called Google Payment fed the perception that a battle with PayPal loomed. But Schmidt indicated that subsidiary is working on something that won't stray far from its search engine. "The payment services we are working on are a natural evolution of Google's existing online products and advertising programs which today connect millions of consumers and advertisers," Schmidt said. He declined to elaborate.
American Technology Research analyst David Edwards believes Google's payment product initially will be tied to its shopping comparison service, Froogle. The company also plans to let people view online videos stored in an index, prompting some other observers to predict the service will be designed to sell content found through its search engine. The speculation about Google's plans have raised investor fears that PayPal's growth might taper off, squeezing eBay's profits. EBay shares have fallen by 3 percent so far this week, declining 34 cents Tuesday to close at $36.90 on the Nasdaq Stock Market. At the same time, investors have been hoping Google will develop another source of revenue besides online advertising, which accounted for almost all the company's $369 million profit during the first three months of this year. Google shares are up 2.7 percent so far this week, gaining $1.14 Tuesday to close at $287.84 on the Nasdaq.
For more information, please visit Guardian eCommerce.
That description fits PayPal, a 6-year-old service that creates "digital cash" by accepting credit card payments from its users and then delivering the payments to a designated recipient. The recipient then can either get real cash or leave all or part of the balance in a PayPal account for future transactions. As e-commerce has blossomed, PayPal has thrived, growing from 24 test users in 1999 to 72 million accountholders through March. Looking to profit from the fees that PayPal collects from completing online transactions, San Jose-based eBay bought the service for $1.3 billion in 2002.
The Internet industry began buzzing about the possibility of Google competing with PayPal after the subject surfaced last week during an e-commerce conference hosted by Piper Jaffray. The Wall Street Journal subsequently reported Google hoped to roll out a rival payment service later this year, quoting people familiar with the company's plans. Other media outlets, including The Associated Press, followed up with similar stories and stock market analysts released reports mulling the possible financial consequences of a showdown between Google and eBay, one of the search engine's biggest advertisers. Google consistently declined comment until Schmidt tried to set the record straight yesterday.
The Mountain View, Calif.-based company's recent incorporation of a subsidiary called Google Payment fed the perception that a battle with PayPal loomed. But Schmidt indicated that subsidiary is working on something that won't stray far from its search engine. "The payment services we are working on are a natural evolution of Google's existing online products and advertising programs which today connect millions of consumers and advertisers," Schmidt said. He declined to elaborate.
American Technology Research analyst David Edwards believes Google's payment product initially will be tied to its shopping comparison service, Froogle. The company also plans to let people view online videos stored in an index, prompting some other observers to predict the service will be designed to sell content found through its search engine. The speculation about Google's plans have raised investor fears that PayPal's growth might taper off, squeezing eBay's profits. EBay shares have fallen by 3 percent so far this week, declining 34 cents Tuesday to close at $36.90 on the Nasdaq Stock Market. At the same time, investors have been hoping Google will develop another source of revenue besides online advertising, which accounted for almost all the company's $369 million profit during the first three months of this year. Google shares are up 2.7 percent so far this week, gaining $1.14 Tuesday to close at $287.84 on the Nasdaq.
For more information, please visit Guardian eCommerce.
Sunday, June 26, 2005
Microsoft Joins Local Search Fray
Microsoft's MSN has launched its own version of local search, joining both Yahoo and Google in seeking to make search more useful while opening marketing opportunities for smaller businesses, just the latest in a series of moves that suggest no let up in the rollout of new services and features from search leaders.
The launch of MSN Local Search beta underscores MSN's efforts to move onto equal footing with its rivals but also is a reminder of the difficulty that the search engines face in differentiating themselves. Yahoo, Google and MSN now all offer virtually the same lineup of search tools and features. In fact, some analysts say the near-constant parade of search upgrades and roll outs, in which one of the major search players or an upstart pushes a new product to market at least once a week, could have the opposite of the desired effect by confusing consumers.
That might be particularly true since many search functions are first debuted in beta, or preliminary, form, only to be formally launched weeks or months later. Meanwhile, the entire search industry faces an uphill battle to get consumers to turn to the Web to find local businesses and information rather than traditional sources such as phone books, analysts say. Microsoft's local search is being powered in part by Amacai Information Corp., which is providing white and yellow page listings for the search engine. The software giant said the beta version is the beginning of a larger local search effort that will eventually include more interactive maps as well as links to local business and residential databases and information such as news, movie times and weather reports.
Search results will be displayed with a pinpoint on a map and links to related content and commercial listings. Local Search replaces a "near me" search feature the site had deployed several months ago, a tool that won mixed reviews for effectiveness and was seen as a place-holder until a more robust local offering could be readied. MSN said the number of upgrades it has made to its search site in recent months is testimony to the commitment it has made to improve Web search.
"We are deeply investing in developing world-leading local search services that precisely deliver the local information consumers care about," Christopher Payne, corporate vice president for MSN Search at Microsoft, said. "We remain committed to continuously improving our search service."
MSN also said it would roll the Virtual Earth program, a mapping effort that uses satellite and other data, into the local search unit. Virtual Earth, itself seen as an answer to Google's maps and its Keyhole satellite offering, will be ready by September. The most interesting aspect of the MSN local launch might be the maps war it portends with the other search engines, especially Google, which has invested heavily in the Keyhole technology. Kelsey Group analyst Greg Sterling said that the instant availability of robust, interactive maps could be one of the most important developments in online search.
"The various map technologies open up a number of possibilities for driving revenue and simplifying users' lives," Sterling said. Many users already recognize the inherent advantage the Web offers for finding maps and directions and there are clear ways to monetize that service as well. Meanwhile, consumers may be dizzied by the array of search roll outs they face on an almost daily basis. Virtually every feature that Google, Yahoo or MSN launches -- from mobile search to desktop search, video search to personalized search -- is quickly matched by the other rivals.
The result might be that consumers no longer have a clear idea of whether any given search engine has technology the others do not. That confusion might be an advantage in some ways, however, by keeping users from straying to rival search engines, Forrester Research analyst Charlene Li said.
"If people don't have a compelling reason to switch, they won't do so," she said. Since users don't have the time or inclination to compare and contrast search sites themselves, they are likely to stick with what they're comfortable with in the absence of evidence that a competitor has built a better mousetrap.
Brought to you by Guardian eCommerce.
The launch of MSN Local Search beta underscores MSN's efforts to move onto equal footing with its rivals but also is a reminder of the difficulty that the search engines face in differentiating themselves. Yahoo, Google and MSN now all offer virtually the same lineup of search tools and features. In fact, some analysts say the near-constant parade of search upgrades and roll outs, in which one of the major search players or an upstart pushes a new product to market at least once a week, could have the opposite of the desired effect by confusing consumers.
That might be particularly true since many search functions are first debuted in beta, or preliminary, form, only to be formally launched weeks or months later. Meanwhile, the entire search industry faces an uphill battle to get consumers to turn to the Web to find local businesses and information rather than traditional sources such as phone books, analysts say. Microsoft's local search is being powered in part by Amacai Information Corp., which is providing white and yellow page listings for the search engine. The software giant said the beta version is the beginning of a larger local search effort that will eventually include more interactive maps as well as links to local business and residential databases and information such as news, movie times and weather reports.
Search results will be displayed with a pinpoint on a map and links to related content and commercial listings. Local Search replaces a "near me" search feature the site had deployed several months ago, a tool that won mixed reviews for effectiveness and was seen as a place-holder until a more robust local offering could be readied. MSN said the number of upgrades it has made to its search site in recent months is testimony to the commitment it has made to improve Web search.
"We are deeply investing in developing world-leading local search services that precisely deliver the local information consumers care about," Christopher Payne, corporate vice president for MSN Search at Microsoft, said. "We remain committed to continuously improving our search service."
MSN also said it would roll the Virtual Earth program, a mapping effort that uses satellite and other data, into the local search unit. Virtual Earth, itself seen as an answer to Google's maps and its Keyhole satellite offering, will be ready by September. The most interesting aspect of the MSN local launch might be the maps war it portends with the other search engines, especially Google, which has invested heavily in the Keyhole technology. Kelsey Group analyst Greg Sterling said that the instant availability of robust, interactive maps could be one of the most important developments in online search.
"The various map technologies open up a number of possibilities for driving revenue and simplifying users' lives," Sterling said. Many users already recognize the inherent advantage the Web offers for finding maps and directions and there are clear ways to monetize that service as well. Meanwhile, consumers may be dizzied by the array of search roll outs they face on an almost daily basis. Virtually every feature that Google, Yahoo or MSN launches -- from mobile search to desktop search, video search to personalized search -- is quickly matched by the other rivals.
The result might be that consumers no longer have a clear idea of whether any given search engine has technology the others do not. That confusion might be an advantage in some ways, however, by keeping users from straying to rival search engines, Forrester Research analyst Charlene Li said.
"If people don't have a compelling reason to switch, they won't do so," she said. Since users don't have the time or inclination to compare and contrast search sites themselves, they are likely to stick with what they're comfortable with in the absence of evidence that a competitor has built a better mousetrap.
Brought to you by Guardian eCommerce.
Saturday, June 25, 2005
Quietly, Craigslist Gains Power on Web
These days, triple-digit annual growth rates are rare among major Web sites. Meet that rarity: Craigslist. Exceptional, too, is the ability to draw 10 million unique visitors each month without ever relying on venture capital and equity markets. Or the ability to attain fourth place among general-interest portals without ever spending a penny on marketing. These are accomplishments fit for boasting about in an annual report. But Craigslist is a privately held company that has no such reports, and no burning interest in the competitive fray. It does far more shrugging than boasting.
Its management regards profit, which it has earned consistently since 1999, as merely the means to remain in control of its own destiny. Free of debt, it can do as it wishes to maximize what it calls its service mission without having to maximize earnings. This is good news for its customers, those it calls its community members, and bad news for competitors, whose shareholders are unlikely to regard community service as their own companies' raison d'etre. Until recently, Craigslist was the overlooked underachiever from that fertile class of 1995 start-ups. Like eBay , it began as a free community service that year, a little experiment in applying technology to community-building, not profit-seeking.
Craigslist initially provided online listings of local events in the San Francisco Bay area, the kind that could be found in an alternative newspaper. Visitors were encouraged to contribute, and they added the online equivalent of the mainstream newspaper's classified section. Software handled e-mail forwarding. Unlike eBay, which is dedicated to removing geographic obstacles to trading and defines "community" along national boundaries, Craigslist thinks and acts locally, organizing listings city by city for merchandise, jobs, real estate, personal ads, events, volunteer opportunities and discussion forums. It has moved at its own idiosyncratic pace, waiting five years after its start to add a second city, Boston. Today, it has sites for 120 cities in 25 countries and serves up 2.4 billion pages a month.
Craig Newmark, its founder, remains protective of the noncommercial character of the site. In the early years, he ran it in his spare time with the help of other volunteers. Eventually, the traffic overwhelmed them; he quit his day job and imposed fees to pay for full-time stewardship. But he minimized the impact on the community by restricting the new charges to employers in San Francisco, who placed job ads. Modest fees for employers in two other cities were added only last year, and only after Newmark invited Craigslist visitors to comment on the wisdom of the change; there were 3,000 remarks, all posted publicly.
Today, 99.2 percent of Craigslist advertisements remain free. Publishers of a local newspapers spend a lot of time thinking about Craigslist. Traditionally, local newspapers have derived 30 percent to 50 percent of their advertising revenue from the classifieds. Surprisingly, the momentum of this online alternative with virtually free offerings had not drawn much attention as recently as last autumn, when Creative Intelligence, a consulting firm based in Altamonte Springs, Fla., surveyed the newspaper industry. It discovered that many executives were unaware of the arrival of Craigslist in their own cities. Nor were all aware that aside from a sliver, ads on Craigslist were available free.
Late last month, Knight Ridder Digital announced its plan to finesse the challenge of free classifieds: it dropped fees for ads for merchandise posted on the Web sites of 22 of its newspapers. When to submit an ad, one must navigate past pitches for various fee- based upgrades. The basic ad is free, but after 500 characters, you pay $1.99; for bold type, another $1.99; a photo package, $3.99 and so on.
Executives at eBay have their own reasons to lie awake thinking about Craigslist. EBay, the child prodigy that went the corporate route and became a publicly traded company after three years, now faces sharply declining growth and that awful fate that no prodigy is ever prepared for: middle age. Data collected by Nielsen/ NetRatings show that eBay's page views in April were up less than 0.5 percent from the previous April. At Craigslist, page views grew 130 percent in the same period. According to the company's data, its traffic is now about one-fifth the volume of eBay's. And the operational efficiencies are astounding: Craigslist has 18 employees; eBay has 8,800.
Even though eBay's pockets are flush and it can afford to pay retail prices for acquisitions, like $620 million in cash for Shopping.com, it must look ever further afield for growth.
One way is to use its technology infrastructure to improve classified advertising. Hani Durzy, a spokesman for eBay, says its core business is a "transaction marketplace," in which the sale is completed online with a binding contract. In contrast to the "transaction marketplace," classifieds merely enable private parties to get in touch. Viewed in terms of technology and legalities, Craigslist provides nothing more than the newspaper classifieds. To complete a deal, you're on your own. But that seems to be all that its large and ever-growing base of fans desires. The offerings of Craigslist have never been more appealing, even though, or maybe because, it is retro in look and retro in its online technology.
EBay uses an elaborate feedback apparatus to allow strangers who will never meet in person to feel safe doing business with one another. Craigslist does not need that apparatus. It is for locals only, and it is the one place that can fix you up with an entire life job, shelter, furnishings, lover at one stop, with minimal intermediation. In August, eBay bought a 25 percent stake in Craigslist from a former Craigslist employee. Durzy said at the time that eBay was "interested in finding out how classified-style trading works."
That turned out to be an understatement. In February, eBay started Kijiji, a set of more than 50 international sites providing free classifieds, similar to Craigslist, in cities in Canada, China, France, Germany, Italy and Japan. By last month, the number had grown to 90, and eBay announced two related acquisitions that expanded the network. It is too soon to know how far eBay may go in copying the nonjudgmental approach of Craigslist's community discussions and sexually explicit personal ads.
For more information, please visit Guardian eCommerce.
Its management regards profit, which it has earned consistently since 1999, as merely the means to remain in control of its own destiny. Free of debt, it can do as it wishes to maximize what it calls its service mission without having to maximize earnings. This is good news for its customers, those it calls its community members, and bad news for competitors, whose shareholders are unlikely to regard community service as their own companies' raison d'etre. Until recently, Craigslist was the overlooked underachiever from that fertile class of 1995 start-ups. Like eBay , it began as a free community service that year, a little experiment in applying technology to community-building, not profit-seeking.
Craigslist initially provided online listings of local events in the San Francisco Bay area, the kind that could be found in an alternative newspaper. Visitors were encouraged to contribute, and they added the online equivalent of the mainstream newspaper's classified section. Software handled e-mail forwarding. Unlike eBay, which is dedicated to removing geographic obstacles to trading and defines "community" along national boundaries, Craigslist thinks and acts locally, organizing listings city by city for merchandise, jobs, real estate, personal ads, events, volunteer opportunities and discussion forums. It has moved at its own idiosyncratic pace, waiting five years after its start to add a second city, Boston. Today, it has sites for 120 cities in 25 countries and serves up 2.4 billion pages a month.
Craig Newmark, its founder, remains protective of the noncommercial character of the site. In the early years, he ran it in his spare time with the help of other volunteers. Eventually, the traffic overwhelmed them; he quit his day job and imposed fees to pay for full-time stewardship. But he minimized the impact on the community by restricting the new charges to employers in San Francisco, who placed job ads. Modest fees for employers in two other cities were added only last year, and only after Newmark invited Craigslist visitors to comment on the wisdom of the change; there were 3,000 remarks, all posted publicly.
Today, 99.2 percent of Craigslist advertisements remain free. Publishers of a local newspapers spend a lot of time thinking about Craigslist. Traditionally, local newspapers have derived 30 percent to 50 percent of their advertising revenue from the classifieds. Surprisingly, the momentum of this online alternative with virtually free offerings had not drawn much attention as recently as last autumn, when Creative Intelligence, a consulting firm based in Altamonte Springs, Fla., surveyed the newspaper industry. It discovered that many executives were unaware of the arrival of Craigslist in their own cities. Nor were all aware that aside from a sliver, ads on Craigslist were available free.
Late last month, Knight Ridder Digital announced its plan to finesse the challenge of free classifieds: it dropped fees for ads for merchandise posted on the Web sites of 22 of its newspapers. When to submit an ad, one must navigate past pitches for various fee- based upgrades. The basic ad is free, but after 500 characters, you pay $1.99; for bold type, another $1.99; a photo package, $3.99 and so on.
Executives at eBay have their own reasons to lie awake thinking about Craigslist. EBay, the child prodigy that went the corporate route and became a publicly traded company after three years, now faces sharply declining growth and that awful fate that no prodigy is ever prepared for: middle age. Data collected by Nielsen/ NetRatings show that eBay's page views in April were up less than 0.5 percent from the previous April. At Craigslist, page views grew 130 percent in the same period. According to the company's data, its traffic is now about one-fifth the volume of eBay's. And the operational efficiencies are astounding: Craigslist has 18 employees; eBay has 8,800.
Even though eBay's pockets are flush and it can afford to pay retail prices for acquisitions, like $620 million in cash for Shopping.com, it must look ever further afield for growth.
One way is to use its technology infrastructure to improve classified advertising. Hani Durzy, a spokesman for eBay, says its core business is a "transaction marketplace," in which the sale is completed online with a binding contract. In contrast to the "transaction marketplace," classifieds merely enable private parties to get in touch. Viewed in terms of technology and legalities, Craigslist provides nothing more than the newspaper classifieds. To complete a deal, you're on your own. But that seems to be all that its large and ever-growing base of fans desires. The offerings of Craigslist have never been more appealing, even though, or maybe because, it is retro in look and retro in its online technology.
EBay uses an elaborate feedback apparatus to allow strangers who will never meet in person to feel safe doing business with one another. Craigslist does not need that apparatus. It is for locals only, and it is the one place that can fix you up with an entire life job, shelter, furnishings, lover at one stop, with minimal intermediation. In August, eBay bought a 25 percent stake in Craigslist from a former Craigslist employee. Durzy said at the time that eBay was "interested in finding out how classified-style trading works."
That turned out to be an understatement. In February, eBay started Kijiji, a set of more than 50 international sites providing free classifieds, similar to Craigslist, in cities in Canada, China, France, Germany, Italy and Japan. By last month, the number had grown to 90, and eBay announced two related acquisitions that expanded the network. It is too soon to know how far eBay may go in copying the nonjudgmental approach of Craigslist's community discussions and sexually explicit personal ads.
For more information, please visit Guardian eCommerce.
Friday, June 24, 2005
Catching 'Click Fraud' Online
An auto repair shop owner buys some online ads and thinks he snagged a bargain by negotiating a deal with the advertising agency to pay only when Web surfers click on the banners. It sounds like a good deal, until the owner receives the bill: His US$1 per click deal turns into a $1 million invoice, and he has no idea how many of the clicks came from legitimate prospects. Welcome to the world of Internet click fraud -- crimes emerging from an increasingly popular practice of pricing online ads. Until recently, online advertisers had no way of knowing whether they were being victimized by click fraud, experts told UPI's The Web. Now, however, software and services from firms such as WhosclickingWho.com, PPCTrax.com, Clicklab.com and ClickFacts.com are helping to discern the real visitors on the Web from the imaginary ones.
"There is a lot of click fraud on the Internet," said Danay Escanaverino, director of marketing at Global Resource Systems in Plantation, Fla., a pioneering firm in the Web marketing field. Many kinds of click fraud occur online. Some of it is perpetrated by competitors of a business, who click on their rivals' ads repeatedly in order to drive up their costs and even try to push them into insolvency. Another malicious fraud occurs when hackers click on ads or search for key words they know have been purchased for keyword searches, such as "car dealer" and "Chicago." Perhaps the most egregious click fraud comes from Web sites that bill their advertisers for an imaginary number of clicks, simply to boost their advertising revenue. "The primary question for marketers is, 'How do you determine which of those clicks are from real customers?'" said John Enright, vice president of marketing at Affinity Internet in Ft. Lauderdale, Fla., a Web services provider for small businesses .
The threat of fraudulent clicks is dominating the consciousness of the online ad industry today. The obsession is to "identify malicious versus legitimate traffic before it adversely affects the network," said Karen Regan, a spokeswoman for Mazu Networks in Cambridge, Mass., which makes software to track malicious behavior on networks. The new software is helping contain the problem, experts said.
"You can monitor the visitors to a site or an ad and determine what search engine they used, whether it was Google or Yahoo or Ask Jeeves," said Pam Watkins, president of Fueled Communications in Dallas, an Internet marketing firm. The tools also can help determine where a user entered a Web site -- an important fact, because many do not enter via the main page, but through links they may have seen elsewhere, or received in an e-mail from friends. The software can examine which parts of a Web site visitors trolled and how much time they spent there.
Controls can even prevent fraudulent clicks while they are happening. WhosClickingWho.com shows pop-ups to warn clickers if they are repeatedly clicking on the same ad. Advertisers want these kinds of protections because the ad-click business has become a $4 billion-a-year industry. The biggest portion of Google's revenues comes from word-search clicks, so it, as well as Yahoo, have implemented in-house measures to ensure the integrity of the data. Google is also said to have refunded clients who were apparently overcharged for clicks.
Companies with a major online presence, like NYTimes.com, USAToday.com, Weather.com, iVillage.com and others use a service from Tacoda, a company in New York City, to segment, target and measure online ad campaigns, a Tacoda spokesman said. Some related issues worry online advertisers in addition to click fraud. One of the metrics used to measure the traffic of a Web site is the number of "unique visitors" -- that is, how many different individuals visited a given site in a given time frame. This contrasts with the total number of clicks, which includes repeat visits by prospects.
Many consumers use anti-spyware software to eliminate cookies -- the mini-files deposited on the hard drives of Web users that are employed by sites to track unique visitors. Now, advertisers are fighting back with new technology. United Virtualities, also in New York City, has developed a backup ID system for cookies set by Web sites and advertising networks. The technology, called the Persistent Identification Element, is tagged to a user's Web browser. It provides advertisers with a unique identification, just like a cookie, and the tags cannot be deleted by any commercially available anti-spyware software today.
"All advertisers, Web sites and networks, use cookies for targeted advertising, but cookies are under attack," said Mookie Tenembaum, founder of United Virtualities. "They are being erased by 40 percent of users, creating serious problems. PIE will give publishers and third-party providers a persistent backup to cookies, effectively rendering them unassailable." The PIE software is contained in just one line of code, he said. Tenembaum said that from the advertiser's point of view the erasure of cookies constitutes a threat to an array of server-side applications, not just advertising, but also site registration and traffic counting.
Brought to you by Guardian eCommerce.
Wednesday, June 22, 2005
Newspaper Readers Turning to Web
Millions of former newspaper readers now get their news from the Web, but the majority remain loyal to their favorite print news outlets. A study by Nielsen//NetRatings said that 21 percent of online users who read newspapers now rely primarily on Web editions, while 7 percent say they split their news consumption between the Web and print. That leaves a vast majority, about 72 percent, who still access newspapers primarily in print, but represents huge growth in the online news medium. The study showed not only the convenience of the Web, analysts say, but also the staying power of brands in the media space, with relatively few users reporting that they have abandoned traditional mainstream media outlets in favor of Web-only rivals.
"A significant percentage of newspaper readers have transferred their preference from print to online editions," Gerry Davidson, senior media analyst at Nielsen//NetRatings, said.
Publishers have responded, Davidson said, by creating flows of exclusive Web content and creating communities around their news outlets. "Many online editions now feature original content and have developed an online strategy that includes online message boards and editorial blogs," he added.
Many publishers still struggle with how to monetize that readership shift and how to remain profitable in the face of the seismic change in readership habits. While some publishers charge for access to their online versions, most offer free access or require only that a user register.
Nielsen said men make up more than half of the heavy online users of news, by 53 percent to 47 percent.
The top five newspaper Web sites were: The New York Times, with 11.3 million visitors in May; USA Today, with 9.2 million, the Washington Post at 7.4 million, the Los Angeles Times with 3.8 million visitors and the San Francisco Chronicle with 3.4 million. Lee Rainie, the director of the Pew Internet & American Life Project, said consumers are increasingly comfortable with getting their news online and, in fact, prefer the immediacy of it in many cases to waiting for the morning paper to hit the porch.
"The benefits of immediacy were really driven home in the 2004 election and users have come to turn to the Web first when they want news fast and on their timeline," Rainie said. The shift manifested itself in the rise of blogs and other developments that are still playing themselves out. "It's not a great leap to see people moving from a newspaper site to an alternative," Rainie noted. "The big change is getting people to get their news online." Still, the loyalty to brands is significant and might underscore a wariness among Web users about the proliferation of news outlets online.
The fact that readers aren't being lost altogether is probably little consolation to media companies struggling to live up to their traditional histories as strong profit-generation machines. The New York Times Co. recently saw its stock slip to a yearly low and has announced a range of job cuts, as have other newspaper concerns. Newspapers have seen readership declines and, more recently, huge drops in classified ad revenue as users turn to options such as eBay and Craigslist to sell items.
Meanwhile, newspapers are searching for various ways to make their online presences stronger -- and more profitable -- without alienating readers. The New York Times said last month it would begin charging for access to some online content, a move the Los Angeles Times tested but retreated from after an outcry. Acquisition is another approach old media is taking to the Web question. The New York Times bought About.com last year; the Wall Street Journal purchased MarketWatch and, more recently, Scripps made what is seen as a major online move by purchasing Shopzilla, an online shopping search site.
For more information, please visit Guardian eCommerce.
"A significant percentage of newspaper readers have transferred their preference from print to online editions," Gerry Davidson, senior media analyst at Nielsen//NetRatings, said.
Publishers have responded, Davidson said, by creating flows of exclusive Web content and creating communities around their news outlets. "Many online editions now feature original content and have developed an online strategy that includes online message boards and editorial blogs," he added.
Many publishers still struggle with how to monetize that readership shift and how to remain profitable in the face of the seismic change in readership habits. While some publishers charge for access to their online versions, most offer free access or require only that a user register.
Nielsen said men make up more than half of the heavy online users of news, by 53 percent to 47 percent.
The top five newspaper Web sites were: The New York Times, with 11.3 million visitors in May; USA Today, with 9.2 million, the Washington Post at 7.4 million, the Los Angeles Times with 3.8 million visitors and the San Francisco Chronicle with 3.4 million. Lee Rainie, the director of the Pew Internet & American Life Project, said consumers are increasingly comfortable with getting their news online and, in fact, prefer the immediacy of it in many cases to waiting for the morning paper to hit the porch.
"The benefits of immediacy were really driven home in the 2004 election and users have come to turn to the Web first when they want news fast and on their timeline," Rainie said. The shift manifested itself in the rise of blogs and other developments that are still playing themselves out. "It's not a great leap to see people moving from a newspaper site to an alternative," Rainie noted. "The big change is getting people to get their news online." Still, the loyalty to brands is significant and might underscore a wariness among Web users about the proliferation of news outlets online.
The fact that readers aren't being lost altogether is probably little consolation to media companies struggling to live up to their traditional histories as strong profit-generation machines. The New York Times Co. recently saw its stock slip to a yearly low and has announced a range of job cuts, as have other newspaper concerns. Newspapers have seen readership declines and, more recently, huge drops in classified ad revenue as users turn to options such as eBay and Craigslist to sell items.
Meanwhile, newspapers are searching for various ways to make their online presences stronger -- and more profitable -- without alienating readers. The New York Times said last month it would begin charging for access to some online content, a move the Los Angeles Times tested but retreated from after an outcry. Acquisition is another approach old media is taking to the Web question. The New York Times bought About.com last year; the Wall Street Journal purchased MarketWatch and, more recently, Scripps made what is seen as a major online move by purchasing Shopzilla, an online shopping search site.
For more information, please visit Guardian eCommerce.
Tuesday, June 21, 2005
UK Businesses 'Wide Open' to Online Threats
UK businesses could be leaving themselves open to new security and legal threats because they fail to control staff use of instant messaging . A YouGov survey has highlighted the rising use of instant messaging (IM) as a business tool. The survey of over 2,000 people around the UK found that one in five uses IM software from companies such as AOL, MSN or Yahoo! at work. However, 62 percent of companies have no policy or technology in place to protect them from IM viruses or misuse.
The survey, commissioned by Akonix Systems, which specialises in IM security tools, claims IM viruses have increased five-fold in the past year. However, another online security firm Sophos cautioned that IM threats still lag far behind email ones. It has issued warnings this year around IM viruses such as Kelvir-F and Bropia-R, but Carole Theriault, security consultant at Sophos, said, "We're not seeing lots of variants."
According to the YouGov survey, the heaviest users of IM are also the ones most likely to create problems. Almost a quarter (24 percent) of 18-29-year-olds use IM at work. They are the most likely group to use it to download songs or film trailers (25 percent) and forward pictures to others (45 percent). Such large files are often used to hide viruses.
The survey found that 16 percent used IM to send or receive commercially sensitive information, often to people outside their company. A full quarter admitted using it to say something their boss wouldn't approve of. However, companies could lose out if they block access to IM services. The survey found that it was often used to communicate with customers and speed up decision-making. "The software was created to be a consumer application, not a business tool," said Peter Shaw, CEO of Akonix. "It's very easy to create problems in a company; it's wide open."
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
The survey, commissioned by Akonix Systems, which specialises in IM security tools, claims IM viruses have increased five-fold in the past year. However, another online security firm Sophos cautioned that IM threats still lag far behind email ones. It has issued warnings this year around IM viruses such as Kelvir-F and Bropia-R, but Carole Theriault, security consultant at Sophos, said, "We're not seeing lots of variants."
According to the YouGov survey, the heaviest users of IM are also the ones most likely to create problems. Almost a quarter (24 percent) of 18-29-year-olds use IM at work. They are the most likely group to use it to download songs or film trailers (25 percent) and forward pictures to others (45 percent). Such large files are often used to hide viruses.
The survey found that 16 percent used IM to send or receive commercially sensitive information, often to people outside their company. A full quarter admitted using it to say something their boss wouldn't approve of. However, companies could lose out if they block access to IM services. The survey found that it was often used to communicate with customers and speed up decision-making. "The software was created to be a consumer application, not a business tool," said Peter Shaw, CEO of Akonix. "It's very easy to create problems in a company; it's wide open."
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
Monday, June 20, 2005
Prolexic Says AOL Is Most Infected Network on Internet
Prolexic, a provider of distributed denial of service (DDoS) solutions and security consulting products, has claimed that Deutsche Telecom, Wanadoo and AOL are Europe's top three offenders for harboring infected PCs. The findings are based on statistics taken from real DDoS attacks over the last six months. Globally, AOL was found to have the most infected network on the Internet.
DDoS attacks are coordinated by cyber terrorists, who place malicious viruses onto computers of unsuspecting broadband users, says Prolexic. When the attack is triggered these infected PCs become controlled by the cyber terrorist and simultaneously "flood" a network with fake packets, preventing legitimate traffic from accessing a system. The report also highlighted a significant change in the way DDoS attacks are being coordinated. Attacks are now focusing less on Layer-3 TCP and have shifted focus to hone in on the weakness of DDoS mitigation devices.
The primary attack of choice in the first half of 2005 was an advanced full connection based flood. This particular attack exposes the real IP address of the attacking zombie, however the sheer number of IP addresses that must be blacklisted to successfully defend against the attack places overwhelming load on mitigation hardware.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
DDoS attacks are coordinated by cyber terrorists, who place malicious viruses onto computers of unsuspecting broadband users, says Prolexic. When the attack is triggered these infected PCs become controlled by the cyber terrorist and simultaneously "flood" a network with fake packets, preventing legitimate traffic from accessing a system. The report also highlighted a significant change in the way DDoS attacks are being coordinated. Attacks are now focusing less on Layer-3 TCP and have shifted focus to hone in on the weakness of DDoS mitigation devices.
The primary attack of choice in the first half of 2005 was an advanced full connection based flood. This particular attack exposes the real IP address of the attacking zombie, however the sheer number of IP addresses that must be blacklisted to successfully defend against the attack places overwhelming load on mitigation hardware.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
Sunday, June 19, 2005
Potential Fallout Seen from Online-Tax Ruling
A California appeals court ruling clearing the way for tax collectors in that state to pursue sales taxes from online sales from out-of-state merchants could have wide-ranging impacts for the e-commerce industry. For now, observers say it's too soon to tell how important the ruling, which the First District Court of Appeals in San Francisco issued late last month, will be for Web merchants of all sizes.
The case, known as Borders Online v. the State Board of Equalization, dealt specifically with sales from Borders to California residents during 1998 and 1999. Those sales totaled about US$1.5 million. At the time, the e-commerce site offered buyers the option of returning items bought online to any Borders store. The issue in the appeal brought by Borders was whether the online entity, which was separately incorporated, had "sufficient presence in the state to justifying the imposition of the tax collection burden."
Borders later removed the in-store return offer from its site, but continued to take such returns and to advertise the shopping site in its stores. Later still the bookseller turned over the operation of its online store to Amazon.com. Borders paid the tax bill -- some $167,000 -- for 1998 and 1999, but then applied for a refund. The denial of that request led to the legal actions that resulted in the appeals court ruling. The ruling could result in additional tax liabilities stretching to 2001, when Borders struck the outsourcing deal with Amazon. Borders declined to comment on the decision and on whether it would take the case to the next review level, the California Supreme Court.
The ruling was being hailed by traditional booksellers, who have argued that a lack of sales tax levied on Borders' and other Web sites gave them an unfair competitive advantage. It also was being watched closely by major e-tailers who could face much larger tax bills if California, and other states, choose to pursue them. It's not clear whether that will happen, however, though the ruling could greatly expand the definition of what it means to have a physical presence in a state. That's been the measuring stick for determining if sales taxes must be paid since a U.S. Supreme Court ruling that predates the rise of e-commerce.
The implications, for instance, could be significant for an e-tailer such as Amazon, which manages online sales for a number of brick-and-mortar merchants and could be seen as having a presence in a number of states as a result. Analysts say that by itself, such a ruling is unlikely to prompt a short-term reconsideration of a streamlined, national online sales tax, though such a proposal resurfaces every so often, with heavy lobbying from traditional retailers who have lost sales to online rivals and from states that are eager to reclaim lost sales tax revenue as they struggle to balance budgets.
The question of how best to handle sales taxes online remains an open one. For years, the argument against such a national tax has been that putting it in place would be detrimental to the nascent online retail industry. However, with Web-based retail growing at a double-digit rate for several years in a row and now making up more than 5 percent of all sales in some categories, that argument grows less persuasive each day. In addition to a disparity between online and offline merchants, there is also inconsistency among Web retailers themselves, with multi-channel retailers that also operate brick-and-mortar stores already actively collecting sales taxes in states where that is required.
Most analysts believe an online sales tax would likely not be much of a drag on online sales growth, but would impact merchants, with smaller e-tailers struggling the most to comply. "Consumers wouldn't stop buying, but the impact of complying with these types of regulations on a mom-and-pop e-tailer would be significant," Forrester Research analyst Carrie Johnson said. As proof, Johnson noted that many multi-channel retailers, including Wal-Mart and others, began voluntarily collecting online sales tax more than two years ago. Despite that development, e-commerce continues to expand dramatically.
The ruling also fits into a larger context in which regulators and courts in states and at the national level struggle to figure out how border-less e-commerce fits into existing regulatory frameworks. Last month, for instance, the U.S. Supreme Court issued a key ruling that could change the way states regulate the online sale of wine. As the judges in the Borders case put it: "We face with increasing frequency issues at the junction of Internet technology and constitutional principles. This is another such case."
For more information, please visit Guardian eCommerce.
The case, known as Borders Online v. the State Board of Equalization, dealt specifically with sales from Borders to California residents during 1998 and 1999. Those sales totaled about US$1.5 million. At the time, the e-commerce site offered buyers the option of returning items bought online to any Borders store. The issue in the appeal brought by Borders was whether the online entity, which was separately incorporated, had "sufficient presence in the state to justifying the imposition of the tax collection burden."
Borders later removed the in-store return offer from its site, but continued to take such returns and to advertise the shopping site in its stores. Later still the bookseller turned over the operation of its online store to Amazon.com. Borders paid the tax bill -- some $167,000 -- for 1998 and 1999, but then applied for a refund. The denial of that request led to the legal actions that resulted in the appeals court ruling. The ruling could result in additional tax liabilities stretching to 2001, when Borders struck the outsourcing deal with Amazon. Borders declined to comment on the decision and on whether it would take the case to the next review level, the California Supreme Court.
The ruling was being hailed by traditional booksellers, who have argued that a lack of sales tax levied on Borders' and other Web sites gave them an unfair competitive advantage. It also was being watched closely by major e-tailers who could face much larger tax bills if California, and other states, choose to pursue them. It's not clear whether that will happen, however, though the ruling could greatly expand the definition of what it means to have a physical presence in a state. That's been the measuring stick for determining if sales taxes must be paid since a U.S. Supreme Court ruling that predates the rise of e-commerce.
The implications, for instance, could be significant for an e-tailer such as Amazon, which manages online sales for a number of brick-and-mortar merchants and could be seen as having a presence in a number of states as a result. Analysts say that by itself, such a ruling is unlikely to prompt a short-term reconsideration of a streamlined, national online sales tax, though such a proposal resurfaces every so often, with heavy lobbying from traditional retailers who have lost sales to online rivals and from states that are eager to reclaim lost sales tax revenue as they struggle to balance budgets.
The question of how best to handle sales taxes online remains an open one. For years, the argument against such a national tax has been that putting it in place would be detrimental to the nascent online retail industry. However, with Web-based retail growing at a double-digit rate for several years in a row and now making up more than 5 percent of all sales in some categories, that argument grows less persuasive each day. In addition to a disparity between online and offline merchants, there is also inconsistency among Web retailers themselves, with multi-channel retailers that also operate brick-and-mortar stores already actively collecting sales taxes in states where that is required.
Most analysts believe an online sales tax would likely not be much of a drag on online sales growth, but would impact merchants, with smaller e-tailers struggling the most to comply. "Consumers wouldn't stop buying, but the impact of complying with these types of regulations on a mom-and-pop e-tailer would be significant," Forrester Research analyst Carrie Johnson said. As proof, Johnson noted that many multi-channel retailers, including Wal-Mart and others, began voluntarily collecting online sales tax more than two years ago. Despite that development, e-commerce continues to expand dramatically.
The ruling also fits into a larger context in which regulators and courts in states and at the national level struggle to figure out how border-less e-commerce fits into existing regulatory frameworks. Last month, for instance, the U.S. Supreme Court issued a key ruling that could change the way states regulate the online sale of wine. As the judges in the Borders case put it: "We face with increasing frequency issues at the junction of Internet technology and constitutional principles. This is another such case."
For more information, please visit Guardian eCommerce.
Saturday, June 18, 2005
EBay Drop-Off Stores Balking at Regulation
The pirate statue had seven days to leave Massapequa, N.Y. And leave it did. The owner of the statue, which is made of resin with a height of 6 feet, recently took it to the QuikDrop store on New York's Long Island to have it photographed and put up for auction on eBay for 14 days. An online bidder from Utah paid US$750, and the store's workers packed it and were preparing to send it.
Next in line were 59 videotapes containing several years' worth of "I Love Lucy" episodes, a pile of aluminum wheel rims and a Happy Holidays Special Edition 1988 Barbie.
Such troves of junk are innocent enough. But as more eBay drop-off stores spring up around the United States to help redistribute the accumulated cargo of an acquisitive culture, some public officials worry that they could become unwitting fences for stolen goods. As some states push to regulate the mushrooming industry, eBay and the stores are joining together to oppose oversight.
States like California and Florida are debating whether drop-off stores like QuikDrop International, AuctionDrop and iSold It should be governed by laws that apply to pawnbrokers, secondhand stores and auctioneers, laws aimed at preventing the sale of stolen items.
The focus on drop-off operations is intensifying because they are multiplying rapidly. According to eBay, there are more than 7,000 locations listed in the company's directory of independent businesses, or trading assistants, that sell on behalf of others and offer drop-off services. Many of these, including about 3,800 AuctionDrop locations in UPS Stores, are retail-style storefronts. And hundreds more of these stores are expected to open in the next year. The stores and eBay have no corporate connection, but they are closely linked. EBay's revenue growth is based in part on signing up new eBay sellers; the drop-off stores help bring into the eBay fold people who might be reluctant to hold an online auction themselves.
In California, where the number of drop-off centers has grown particularly quickly, secondhand dealers are required to report transactions, fingerprint people selling items like high-priced jewelry and electronic equipment, and hold the data for 30 days. Ebay is lobbying against a proposed law that would set up an electronic database to track stolen goods sold at secondhand stores in California. The state attorney general recently released an opinion that the drop-off stores should be classified as secondhand dealers. EBay asked that the bill exempt the centers from regulation, but such an exemption has not been written into the bill.
"We simply cannot see the need for any of this legislation," said Tod Cohen, vice president for government relations at eBay, which is based in San Jose, Calif. Laws governing pawnbrokers, secondhand dealers and auctioneers, he said, "make no sense for our business." Some law enforcement agencies argue that drop-off centers could well become new conduits for stolen items as Internet-based crime rises.
So far, there has been little evidence of stolen goods passing through drop-off stores. But law enforcement officials say that is because there is no easy way to track stolen items flowing in and out of the centers. "People are using pawnshops less and less," said Danny Macagni, chief of police in Santa Maria, Calif. "These eBay drop stores don't have to notify us like a pawn shop, so stolen property could be sold and we'll never even know about it."
The drop-off stores typically take in an item, photograph it, and put it up for sale on eBay. If a sale goes through, the store sends the seller a check, minus a store commission that is often as high as 35 percent, a fee for eBay and other payment processing charges. If the item does not sell within a certain number of days at QuikDrop, the owner is asked to retrieve it.
Macagni said that as more commerce and crime move online, increased monitoring of online sales can only help. "If we wait," he said, "we won't have the ability to deal with this issue."
State and municipal laws regulating pawnbrokers and secondhand dealers vary, but they usually require that dealers report transactions to the police, hold items for a certain period before selling them and even take fingerprints of their customers. California, Florida and Texas have been considering legislation that would impose regulations on drop-off stores. And in New York City, where secondhand stores must obtain a license and maintain transaction records for police inspection on demand, the Department of Consumer Affairs is considering the question of whether the stores qualify as secondhand stores, said Dina Improta, a spokeswoman for the department.
But eBay executives and store owners say criminals are not likely to walk into a drop-off store, offer personal information , leave a telephone number and wait for a check to arrive in the mail.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
Next in line were 59 videotapes containing several years' worth of "I Love Lucy" episodes, a pile of aluminum wheel rims and a Happy Holidays Special Edition 1988 Barbie.
Such troves of junk are innocent enough. But as more eBay drop-off stores spring up around the United States to help redistribute the accumulated cargo of an acquisitive culture, some public officials worry that they could become unwitting fences for stolen goods. As some states push to regulate the mushrooming industry, eBay and the stores are joining together to oppose oversight.
States like California and Florida are debating whether drop-off stores like QuikDrop International, AuctionDrop and iSold It should be governed by laws that apply to pawnbrokers, secondhand stores and auctioneers, laws aimed at preventing the sale of stolen items.
The focus on drop-off operations is intensifying because they are multiplying rapidly. According to eBay, there are more than 7,000 locations listed in the company's directory of independent businesses, or trading assistants, that sell on behalf of others and offer drop-off services. Many of these, including about 3,800 AuctionDrop locations in UPS Stores, are retail-style storefronts. And hundreds more of these stores are expected to open in the next year. The stores and eBay have no corporate connection, but they are closely linked. EBay's revenue growth is based in part on signing up new eBay sellers; the drop-off stores help bring into the eBay fold people who might be reluctant to hold an online auction themselves.
In California, where the number of drop-off centers has grown particularly quickly, secondhand dealers are required to report transactions, fingerprint people selling items like high-priced jewelry and electronic equipment, and hold the data for 30 days. Ebay is lobbying against a proposed law that would set up an electronic database to track stolen goods sold at secondhand stores in California. The state attorney general recently released an opinion that the drop-off stores should be classified as secondhand dealers. EBay asked that the bill exempt the centers from regulation, but such an exemption has not been written into the bill.
"We simply cannot see the need for any of this legislation," said Tod Cohen, vice president for government relations at eBay, which is based in San Jose, Calif. Laws governing pawnbrokers, secondhand dealers and auctioneers, he said, "make no sense for our business." Some law enforcement agencies argue that drop-off centers could well become new conduits for stolen items as Internet-based crime rises.
So far, there has been little evidence of stolen goods passing through drop-off stores. But law enforcement officials say that is because there is no easy way to track stolen items flowing in and out of the centers. "People are using pawnshops less and less," said Danny Macagni, chief of police in Santa Maria, Calif. "These eBay drop stores don't have to notify us like a pawn shop, so stolen property could be sold and we'll never even know about it."
The drop-off stores typically take in an item, photograph it, and put it up for sale on eBay. If a sale goes through, the store sends the seller a check, minus a store commission that is often as high as 35 percent, a fee for eBay and other payment processing charges. If the item does not sell within a certain number of days at QuikDrop, the owner is asked to retrieve it.
Macagni said that as more commerce and crime move online, increased monitoring of online sales can only help. "If we wait," he said, "we won't have the ability to deal with this issue."
State and municipal laws regulating pawnbrokers and secondhand dealers vary, but they usually require that dealers report transactions to the police, hold items for a certain period before selling them and even take fingerprints of their customers. California, Florida and Texas have been considering legislation that would impose regulations on drop-off stores. And in New York City, where secondhand stores must obtain a license and maintain transaction records for police inspection on demand, the Department of Consumer Affairs is considering the question of whether the stores qualify as secondhand stores, said Dina Improta, a spokeswoman for the department.
But eBay executives and store owners say criminals are not likely to walk into a drop-off store, offer personal information , leave a telephone number and wait for a check to arrive in the mail.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
Friday, June 17, 2005
Report: Online Advertising Skirts Search Results
Even as more consumers rely on Internet search engines to help them navigate the Web, they are facing a tougher time determining if their search results are legitimate or paid advertisements, according to a study released yesterday. Consumer Reports' WebWatch tracked 15 Internet search engines, including Google, Yahoo, and Oakland-based Ask Jeeves. It found that some have altered their sites in the past year in ways that make it harder for consumers, many of whom remain unaware or confused about real versus paid search results, to discern the differences.
Most sites place advertisements on the side of the page, away from the actual results, or put them in a shaded box or label them as a "sponsored link." They also provide disclosure links that explain their sponsored results. But the WebWatch report found that in the past year, Yahoo had turned its once bright red "sponsored results" headline into a light gray and removed its paid advertising disclosure links.
Ask Jeeves made its disclosure headings fainter, removed their disclosure links and made the disclosures harder to find, WebWatch also found. "People are using search engines for everything," Jorgen Wouters, the author of the study, said at a conference in Berkeley. "They have a right to know [if] is this objective, unbiased information. All we're asking for is, if it's an ad, then say it's an ad."
Some sites fared better. Google, the dominant Internet search engine, remained largely unchanged, although the report cited its disclosure statements as difficult to find. CNet's Search.com added disclosure pages for paid placement and paid inclusion.
All the while, Internet searches have continued to climb. Among the top four search engines, Google, Yahoo, MSN, and AOL, U.S. consumers conducted some 4.7 billion searches in April. Compare that with 3.7 billion searches in the month of April last year.
Internet advertising revenues altogether reached US$9.6 billion last year, according to a report by the Interactive Advertising Bureau and PricewaterhouseCoopers. Paid searches accounted for the largest chunk at 40 percent or US$3.9 billion, an increase of 50 percent from the year before.
"The search engine companies walk a really fine line," said Allen Weiner, an analyst at technology research firm Gartner . "On one hand, they want to serve the people who are searching out there, but in order to do that they need to derive revenue, which means they have to have ads."
"To some degree right now, but not all of them, it favors the advertisers in terms of placement," he added.
In 2002, the Federal Trade Commission sent a letter to the search engine industry recommending that it incorporate "clear and conspicuous disclosure" of paid advertisements, a request that most Internet search engines complied with. Since then, however, some of those changes for the good have disappeared, WebWatch concluded.
Ask Jeeves said in a statement yesterday that its disclosure practices go beyond the FTC's recommendations and that its sponsored links are clearly delineated on the results page. It also eliminated its paid inclusion program last year, which charged a fee to assure a site's listing in the results, a move it said ensures "our Web search results are pure and not commercial." "Ask Jeeves continues to evolve its search reply page based on usability and user preferences," a company statement said.
But many consumers still do not realize that some of their search results are advertisements, said Beau Brendler, director of WebWatch. In one of its studies, the group followed a number of consumers and observed as they discovered that the results they believed to be legitimate were not. The consumers expressed shock and a sense of betrayal, Brendler said. That could have dire consequences for Internet search companies in the future. "As consumers learn how search engines work, they're going to turn off the ones with deceptive practices," he said.
In a joint project, Consumer Reports' WebWatch and the Health Improvement Institute rated the 20 most trafficked online health sites, examining whether they accepted advertising, offered a clear distinction between editorial and paid content or disclosed that surveys were sponsored by advertisers. The best sites included unbiased, peer-reviewed reports written by health professionals. Check out the complete results at www.healthratings.org .
Excellent: WebMD, National Institutes of Health, MayoClinic.com, MedicineNet.com, KidsHealth, MedScape. Very Good: eMedicine.com, Aetna Intelihealth, RealAge, Healthology.com, Healthsquare.
Good: Yahoo! Health, About Health and Fitness, Drugs.com, Pfizer, RxList, Health, HealthCenter Online, Healthboards.com.
Fair: QualityHealth.com.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
Most sites place advertisements on the side of the page, away from the actual results, or put them in a shaded box or label them as a "sponsored link." They also provide disclosure links that explain their sponsored results. But the WebWatch report found that in the past year, Yahoo had turned its once bright red "sponsored results" headline into a light gray and removed its paid advertising disclosure links.
Ask Jeeves made its disclosure headings fainter, removed their disclosure links and made the disclosures harder to find, WebWatch also found. "People are using search engines for everything," Jorgen Wouters, the author of the study, said at a conference in Berkeley. "They have a right to know [if] is this objective, unbiased information. All we're asking for is, if it's an ad, then say it's an ad."
Some sites fared better. Google, the dominant Internet search engine, remained largely unchanged, although the report cited its disclosure statements as difficult to find. CNet's Search.com added disclosure pages for paid placement and paid inclusion.
All the while, Internet searches have continued to climb. Among the top four search engines, Google, Yahoo, MSN, and AOL, U.S. consumers conducted some 4.7 billion searches in April. Compare that with 3.7 billion searches in the month of April last year.
Internet advertising revenues altogether reached US$9.6 billion last year, according to a report by the Interactive Advertising Bureau and PricewaterhouseCoopers. Paid searches accounted for the largest chunk at 40 percent or US$3.9 billion, an increase of 50 percent from the year before.
"The search engine companies walk a really fine line," said Allen Weiner, an analyst at technology research firm Gartner . "On one hand, they want to serve the people who are searching out there, but in order to do that they need to derive revenue, which means they have to have ads."
"To some degree right now, but not all of them, it favors the advertisers in terms of placement," he added.
In 2002, the Federal Trade Commission sent a letter to the search engine industry recommending that it incorporate "clear and conspicuous disclosure" of paid advertisements, a request that most Internet search engines complied with. Since then, however, some of those changes for the good have disappeared, WebWatch concluded.
Ask Jeeves said in a statement yesterday that its disclosure practices go beyond the FTC's recommendations and that its sponsored links are clearly delineated on the results page. It also eliminated its paid inclusion program last year, which charged a fee to assure a site's listing in the results, a move it said ensures "our Web search results are pure and not commercial." "Ask Jeeves continues to evolve its search reply page based on usability and user preferences," a company statement said.
But many consumers still do not realize that some of their search results are advertisements, said Beau Brendler, director of WebWatch. In one of its studies, the group followed a number of consumers and observed as they discovered that the results they believed to be legitimate were not. The consumers expressed shock and a sense of betrayal, Brendler said. That could have dire consequences for Internet search companies in the future. "As consumers learn how search engines work, they're going to turn off the ones with deceptive practices," he said.
In a joint project, Consumer Reports' WebWatch and the Health Improvement Institute rated the 20 most trafficked online health sites, examining whether they accepted advertising, offered a clear distinction between editorial and paid content or disclosed that surveys were sponsored by advertisers. The best sites included unbiased, peer-reviewed reports written by health professionals. Check out the complete results at www.healthratings.org .
Excellent: WebMD, National Institutes of Health, MayoClinic.com, MedicineNet.com, KidsHealth, MedScape. Very Good: eMedicine.com, Aetna Intelihealth, RealAge, Healthology.com, Healthsquare.
Good: Yahoo! Health, About Health and Fitness, Drugs.com, Pfizer, RxList, Health, HealthCenter Online, Healthboards.com.
Fair: QualityHealth.com.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
Thursday, June 16, 2005
Oversight Board Picks VeriSign to Run .Net Suffix
VeriSign, a company that already exerts significant control over how people send e-mail and find Web sites, was selected this week to run the Internet's third-most popular suffix for six more years.
The Internet's key oversight board, the Internet Corporation for Assigned Names and Numbers, said today it had renewed VeriSign's contract for ".net" after reviewing recommendations from an outside panel and comments from the Internet community.
The move was largely expected after Telcordia Technologies, the outside firm selected to evaluate bids to operate ".net" directories, made VeriSign its top pick in March over four other bidders. Rivals complained that the evaluation process was flawed, but Telcordia again backed VeriSign in a revised report in May. U.S. Commerce Department approval is also required -- and expected. The U.S. government, which funded much of the Internet's early development, had selected ICANN in 1998 to oversee Internet addressing policies but retains veto power.
Besides running ".com" and ".net," which together comprise more than half of all domain names registered, VeriSign controls the master directory that lists all of the Internet's suffixes, meaning all traffic touches the company's computers at one point or another. As operator of ".net," VeriSign will have the technical ability -- though some question whether it has the legal authority -- to make sweeping policy changes.
Nearly two years ago, VeriSign briefly redirected Web surfers who mistyped ".com" and ".net" names to VeriSign's own search engine, breaking some spam-filtering programs and other applications in the process. VeriSign suspended that program under pressure and has since sued ICANN, accusing it of impeding efforts to offer new, moneymaking services.
Even so, the new contract taking effect July 1 should generate more than US$20 million annually for VeriSign, which already makes some $225 million a year managing ".com." Owners of ".net" domain names could see lower prices when they renew, since VeriSign pledged fee reductions. VeriSign currently gets $6 annually for each ".com" and ".net" name, though it promised to settle for $4.25 in the new contract, 75 cents of which would go to ICANN.
Most Internet users, however, should not see any immediate changes. VeriSign took over ".net" in 2000 when it bought Network Solutions, which had been running the domain name since 1993.
There are about 5.8 million ".net" names. Only ".com" and Germany's ".de" are more populous domains.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
The Internet's key oversight board, the Internet Corporation for Assigned Names and Numbers, said today it had renewed VeriSign's contract for ".net" after reviewing recommendations from an outside panel and comments from the Internet community.
The move was largely expected after Telcordia Technologies, the outside firm selected to evaluate bids to operate ".net" directories, made VeriSign its top pick in March over four other bidders. Rivals complained that the evaluation process was flawed, but Telcordia again backed VeriSign in a revised report in May. U.S. Commerce Department approval is also required -- and expected. The U.S. government, which funded much of the Internet's early development, had selected ICANN in 1998 to oversee Internet addressing policies but retains veto power.
Besides running ".com" and ".net," which together comprise more than half of all domain names registered, VeriSign controls the master directory that lists all of the Internet's suffixes, meaning all traffic touches the company's computers at one point or another. As operator of ".net," VeriSign will have the technical ability -- though some question whether it has the legal authority -- to make sweeping policy changes.
Nearly two years ago, VeriSign briefly redirected Web surfers who mistyped ".com" and ".net" names to VeriSign's own search engine, breaking some spam-filtering programs and other applications in the process. VeriSign suspended that program under pressure and has since sued ICANN, accusing it of impeding efforts to offer new, moneymaking services.
Even so, the new contract taking effect July 1 should generate more than US$20 million annually for VeriSign, which already makes some $225 million a year managing ".com." Owners of ".net" domain names could see lower prices when they renew, since VeriSign pledged fee reductions. VeriSign currently gets $6 annually for each ".com" and ".net" name, though it promised to settle for $4.25 in the new contract, 75 cents of which would go to ICANN.
Most Internet users, however, should not see any immediate changes. VeriSign took over ".net" in 2000 when it bought Network Solutions, which had been running the domain name since 1993.
There are about 5.8 million ".net" names. Only ".com" and Germany's ".de" are more populous domains.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
Tuesday, June 14, 2005
Do Not Enter Site -- It's XXX (Rated)!
There soon will be a central place for Web surfers to dwell in a forbidden cyber land of adult fantasies, sex, dark rituals and total taboos. Finally, ICANN has given in to the pressure and has tossed a big rock across the turbulent e-commerce ocean. It has approved a new suffix, .xxx, for adult-only porn sites, creating ripples and debates in ever so confusing global cyber branding times when cyber global domain name challenges are being fought in the complex earthly trademark realities.
Three things are bound to happen: Segregation and polarization. The most profitable sector of the Internet is still adult Web sites. Though XXX offers a great branding opportunity to most adult sites, it still raises some serious questions and it demands some viewing strategies. Most sites will go through a frenzy to secure their already existing names with the new suffix, and also there will be a series of new names ending with .xxx. This suffix has a great appeal for adult content. Most adult Web sites will use this new suffix while keeping all the other existing suffixes, including .com. This has happened each time a new suffix has been introduced, though it has fizzled down very quickly as the public at large has had no time to figure out the new suffixes, being as it is so overwhelmed with the commonality of the .com suffix.
Blocking and access. For the first time, adult sites will have a visible and a clearly identifiable component to the very specific nature of the site, unlike .com, which is so general in nature. This would mean various search engines, portals and individuals would be able to sort and select by this suffix, to either allow or block such sites and e-mails. Monetizing and marketing. This will bring added revenue and create some sparks for the registrars. The registration will become a money-making process of millions of new registrations, changes, modifications, squatting and legal disputes. The domain management industry will be humming for a while.
In the coming days and beyond, once the dust settles down, there will be three key questions:
Enforcement? Is it possible that there will be a requirement by law to move all adult stuff to .xxx? This would require a more serious debate on the definition of what is an adult site, is it for selling guns, discussing philosophy, Alzheimer, sexual diseases, or just raw sex? If it is just raw sex, then why not introduce a new suffix of .sex? The issue of freedom of speech will be right at the center of the discussion, and there is no easy way for this to be legislated. It would become a Pandora's box.
Privacy? The exposure of the .xxx would take away users' privacy , as they might be reluctant to be seen with such a highly visible identity. Today most adult sites are nicely camouflaged into name brands like PersianKitty.com or BlueRiver.net, etc. The same names with .xxx will make it too obvious.
Squatters? Squatters and other players might find a moneymaking angle by creating embarrassment and exploiting legitimate business site names by registering them in the .xxx domain. This would be embarrassing to a legitimate business, which would have to explain that it has nothing to do with such a site, such as www.Disney.xxx, www.dell.xxx, www.lg.xxx or www.sony.xxx.
Only properly structured and clearly legit and globally strong trademark holders would be able to protect themselves; the rest with generic business names based on dictionary words, geographic names or general type surnames would have little protection.
ICANN has always moved in a very unpredictable manner since inception, and randomly creating additional top level domain (TLD) suffixes doesn't help. Each time a new category is added, it opens a wide debate. Basically, a clear policy is needed on whether ICANN will open certain TLDs or not and under what situations. It can either work with only current suffixes and close the book, or have a system like the yellow pages. It could introduce suffixes for each industry, like hotels, airlines, libraries, marketing, real estate, doctors, and dentists, employed and unemployed, etc., adding some 5,000 such international categories.
Two problems. First, as long as there are no requirements for any proof or identification for a particular business or activity, anybody could use any suffix and simply jump into any category of choice. Second, searching would fail, as there will be no way to know who is whom. Under the present registration set up, this process of identity and control can't be policed. The cost of registration and domain name management would become a nightmare, as most would like to cover all the bases and have as many registrations in as many different suffixes as possible. The end user would be seriously frustrated to remember if it should type a hospital, doctor or medical suffix to find help.
What non-adult businesses must do is stay clear of this forbidden area. They should secure good trademarks and make sure they have very solid .com names. In this brand-name-driven economy, only properly executed corporate and product naming with five star standards accompanied with cyber-branding will survive. Furthermore, .com is still the king and the other suffixes are names on life support, names that have no chance. Customers all over the world recognize a .com as a high profile operation versus .net, .biz or. info. It is still very easy to get a .com name with a globally protected trademark as long as you have the right expertise on the global naming issues.
Obviously, holders of professionally created and properly managed globally trademarked names with matching .coms are the lucky ones. Engage your entire organization on domain name management issues and discover the power of real e-commerce via global cyber-branding. It is still the cheapest medium and yet ignored by 97 percent of the corporations worldwide. Most corporations are convinced that once they have acquired a few Web sites and a few e-mails, they are now fully engaged in the art of e-commerce. Now doesn't this sound like children-only business?
Brought to you by the Guardian eCommerce Privacy Seal Program.
Three things are bound to happen: Segregation and polarization. The most profitable sector of the Internet is still adult Web sites. Though XXX offers a great branding opportunity to most adult sites, it still raises some serious questions and it demands some viewing strategies. Most sites will go through a frenzy to secure their already existing names with the new suffix, and also there will be a series of new names ending with .xxx. This suffix has a great appeal for adult content. Most adult Web sites will use this new suffix while keeping all the other existing suffixes, including .com. This has happened each time a new suffix has been introduced, though it has fizzled down very quickly as the public at large has had no time to figure out the new suffixes, being as it is so overwhelmed with the commonality of the .com suffix.
Blocking and access. For the first time, adult sites will have a visible and a clearly identifiable component to the very specific nature of the site, unlike .com, which is so general in nature. This would mean various search engines, portals and individuals would be able to sort and select by this suffix, to either allow or block such sites and e-mails. Monetizing and marketing. This will bring added revenue and create some sparks for the registrars. The registration will become a money-making process of millions of new registrations, changes, modifications, squatting and legal disputes. The domain management industry will be humming for a while.
In the coming days and beyond, once the dust settles down, there will be three key questions:
Enforcement? Is it possible that there will be a requirement by law to move all adult stuff to .xxx? This would require a more serious debate on the definition of what is an adult site, is it for selling guns, discussing philosophy, Alzheimer, sexual diseases, or just raw sex? If it is just raw sex, then why not introduce a new suffix of .sex? The issue of freedom of speech will be right at the center of the discussion, and there is no easy way for this to be legislated. It would become a Pandora's box.
Privacy? The exposure of the .xxx would take away users' privacy , as they might be reluctant to be seen with such a highly visible identity. Today most adult sites are nicely camouflaged into name brands like PersianKitty.com or BlueRiver.net, etc. The same names with .xxx will make it too obvious.
Squatters? Squatters and other players might find a moneymaking angle by creating embarrassment and exploiting legitimate business site names by registering them in the .xxx domain. This would be embarrassing to a legitimate business, which would have to explain that it has nothing to do with such a site, such as www.Disney.xxx, www.dell.xxx, www.lg.xxx or www.sony.xxx.
Only properly structured and clearly legit and globally strong trademark holders would be able to protect themselves; the rest with generic business names based on dictionary words, geographic names or general type surnames would have little protection.
ICANN has always moved in a very unpredictable manner since inception, and randomly creating additional top level domain (TLD) suffixes doesn't help. Each time a new category is added, it opens a wide debate. Basically, a clear policy is needed on whether ICANN will open certain TLDs or not and under what situations. It can either work with only current suffixes and close the book, or have a system like the yellow pages. It could introduce suffixes for each industry, like hotels, airlines, libraries, marketing, real estate, doctors, and dentists, employed and unemployed, etc., adding some 5,000 such international categories.
Two problems. First, as long as there are no requirements for any proof or identification for a particular business or activity, anybody could use any suffix and simply jump into any category of choice. Second, searching would fail, as there will be no way to know who is whom. Under the present registration set up, this process of identity and control can't be policed. The cost of registration and domain name management would become a nightmare, as most would like to cover all the bases and have as many registrations in as many different suffixes as possible. The end user would be seriously frustrated to remember if it should type a hospital, doctor or medical suffix to find help.
What non-adult businesses must do is stay clear of this forbidden area. They should secure good trademarks and make sure they have very solid .com names. In this brand-name-driven economy, only properly executed corporate and product naming with five star standards accompanied with cyber-branding will survive. Furthermore, .com is still the king and the other suffixes are names on life support, names that have no chance. Customers all over the world recognize a .com as a high profile operation versus .net, .biz or. info. It is still very easy to get a .com name with a globally protected trademark as long as you have the right expertise on the global naming issues.
Obviously, holders of professionally created and properly managed globally trademarked names with matching .coms are the lucky ones. Engage your entire organization on domain name management issues and discover the power of real e-commerce via global cyber-branding. It is still the cheapest medium and yet ignored by 97 percent of the corporations worldwide. Most corporations are convinced that once they have acquired a few Web sites and a few e-mails, they are now fully engaged in the art of e-commerce. Now doesn't this sound like children-only business?
Brought to you by the Guardian eCommerce Privacy Seal Program.
Monday, June 13, 2005
AOL Launching New Online Portal this Month
America Online said yesterday it will launch its overhauled AOL.com Web site this month, rolling out an ad-based portal with free services in a shift away from its shrinking Internet subscription business. The new site is expected to go live in the last two weeks of June, AOL spokeswoman Tricia Wallace said. She said it will be available to AOL subscribers and to Internet users through a link on the current AOL Web site, which will continue to coexist with the new version for about a month.
"AOL has evolved from a company at the forefront of getting consumers online to a company that supports a powerful network of Web brands and services," the company said in background materials provided to reporters. "Now AOL is setting another standard with its AOL.com portal designed to make the Internet come alive for new audiences across the Web," AOL said.
The new site brings together AOL's current Web services with features previously only available to subscribers. Several new offerings include a heavy focus on video intended for people with high-speed Internet connections.
"The emphasis we're placing on multimedia throughout AOL.com reflects the importance of on-demand video as an emerging mass behavior on the Web," the company said. The "video hub," one of three main areas on the site, will include a new video player and a large selection of music videos, movie clips and previews, independent short films and news and sports content. A new video search tool will let people peruse AOL's video archive and materials from other video sites.
Another section is "My AOL," a page of text links that people can customize to deliver continuous updates about the news, entertainment, sports and other topics they choose.
The main portal has more traditional links to news, music, shopping and mapping tools. The page also links to AOL offerings such as AOL Instant Messenger and the new free AIM e-mail service.
Search tools include a Web search powered by Google, access to AOL's CityGuide and a "desktop search" feature that lets users of AOL's browser scan the Web and their computers from one place.
AOL, the online division of media giant Time Warner, will also offer content from its parent company from cable networks like HBO and CNN and magazines like People and Real Simple. Other content will include material from XM Satellite Radio, the NFL and ABC News. While the No. 1 Internet provider, AOL has been hemorrhaging subscribers who have defected to lower-priced and higher-speed rivals. Current members pay about $20 a month for dial-up Internet service.
AOL had 21.7 million members in this year's first quarter, down from more than 26 million at the end of 2002. The new Web site and the launch of a free e-mail service last month are part of a strategy to move beyond its subscriber services into the realm of free Web offerings that attract advertising, AOL officials have said.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
"AOL has evolved from a company at the forefront of getting consumers online to a company that supports a powerful network of Web brands and services," the company said in background materials provided to reporters. "Now AOL is setting another standard with its AOL.com portal designed to make the Internet come alive for new audiences across the Web," AOL said.
The new site brings together AOL's current Web services with features previously only available to subscribers. Several new offerings include a heavy focus on video intended for people with high-speed Internet connections.
"The emphasis we're placing on multimedia throughout AOL.com reflects the importance of on-demand video as an emerging mass behavior on the Web," the company said. The "video hub," one of three main areas on the site, will include a new video player and a large selection of music videos, movie clips and previews, independent short films and news and sports content. A new video search tool will let people peruse AOL's video archive and materials from other video sites.
Another section is "My AOL," a page of text links that people can customize to deliver continuous updates about the news, entertainment, sports and other topics they choose.
The main portal has more traditional links to news, music, shopping and mapping tools. The page also links to AOL offerings such as AOL Instant Messenger and the new free AIM e-mail service.
Search tools include a Web search powered by Google, access to AOL's CityGuide and a "desktop search" feature that lets users of AOL's browser scan the Web and their computers from one place.
AOL, the online division of media giant Time Warner, will also offer content from its parent company from cable networks like HBO and CNN and magazines like People and Real Simple. Other content will include material from XM Satellite Radio, the NFL and ABC News. While the No. 1 Internet provider, AOL has been hemorrhaging subscribers who have defected to lower-priced and higher-speed rivals. Current members pay about $20 a month for dial-up Internet service.
AOL had 21.7 million members in this year's first quarter, down from more than 26 million at the end of 2002. The new Web site and the launch of a free e-mail service last month are part of a strategy to move beyond its subscriber services into the realm of free Web offerings that attract advertising, AOL officials have said.
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
Sunday, June 12, 2005
Yahoo, Bidding for eBay Market Share, Cuts Auction Fees
Aiming to grab a bigger piece of the online auction business, Yahoo has said it will eliminate fees charged for using its auction site, a move that seems directly aimed at sellers who would normally turn to eBay to sell their goods.
Yahoo is eliminating both the listing fees -- the up-front charges to put an auction item up for sale -- and the percentage-based fees charged if an item sold. The savings could be considerable, especially for the so-called Power Sellers who drive much of eBay's business. Going forward, the Yahoo auction site will be ad-supported, with paid search and other types of advertising. The change only applies to the U.S. Fees will continue to be charged in Canada and in Japan, a market where Yahoo's auctions are actually the dominant market player and where eBay has been thwarted in its attempts to dethrone the portal.
EBay's listing fees range from 25 cents for items that start for sale at less than a dollar to US$4.80 for items on which the bidding begins at $500 or more. The so-called final value fee starts at 5.25 percent of the total sale price. Depending upon the category and other factors, the savings on an item that sold at auction for $100 could be more than $5, depending upon the number of extras a seller chooses to draw attention to its listing. For sellers who peddle dozens of items each week, that could represent a significant bottom-line difference.
The change comes less than a week after eBay announced plans to buy comparison shopping search engine Shopping.com in a deal worth $620 million. That move gives eBay the ability to offer sellers broader exposure for their listings. In the past, eBay's sellers have been wont to stray from the auction giant because despite a slew of would-be competitors, from Amazon and Yahoo to sites such as Ubid.com, no single alternative could offer anywhere near the audience of would-be buyers and, just as importantly, bidders, that eBay boasts.
Yahoo might be one of the few competitors for eBay that has the means to change that, however, since it attracts tens of millions of visitors to its portal each month. Yahoo said the move had nothing to do with eBay's Shopping.com buy and that the change has been in the works for some six months. That time frame coincides with the latest eBay fees hike, which drew outcry from sellers.
At the time, Overstock.com moved to woo disgruntled eBay users by slashing its own auction listing fees. Overstock said it saw immediate results, with auction listings rising 50 percent in the course of a week. However, while eBay has shown signs of slowing growth in recent quarters, most analysts believe that competitive move had little long-term impact.
EBay later reversed itself on some of the fees, though a hike on the percentage charged for final sales was kept in place, as were the fees charged to sellers who maintained eBay Stores. Those fees increased as much as 60 percent. The auction giant also promised to expand phone support for sellers in a bid to smooth ruffled seller feathers. Forrester Research analyst Carrie Johnson said that eBay has long been a force in the Internet commerce world, a brand that is all but synonymous with online auctions.
Auction-style selling is something that is poised to grow as well, as more shoppers become Web-savvy. Because the bidding process is somewhat more complicated than traditional e-commerce sales from a site such as Amazon -- and because most eBay merchants do not take credit card payments directly -- such sales attract slightly more sophisticated users.
But there might be signs that consumers would welcome an alternative to eBay. Johnson said while a recent survey found eBay users still fond of the sense of community the site develops -- which builds loyalty -- Amazon.com has scored higher on overall customer experience. Other surveys have found that less than half of all eBay users say they are committed to buying only from that site.
For more information, please visit Guardian eCommerce.
Yahoo is eliminating both the listing fees -- the up-front charges to put an auction item up for sale -- and the percentage-based fees charged if an item sold. The savings could be considerable, especially for the so-called Power Sellers who drive much of eBay's business. Going forward, the Yahoo auction site will be ad-supported, with paid search and other types of advertising. The change only applies to the U.S. Fees will continue to be charged in Canada and in Japan, a market where Yahoo's auctions are actually the dominant market player and where eBay has been thwarted in its attempts to dethrone the portal.
EBay's listing fees range from 25 cents for items that start for sale at less than a dollar to US$4.80 for items on which the bidding begins at $500 or more. The so-called final value fee starts at 5.25 percent of the total sale price. Depending upon the category and other factors, the savings on an item that sold at auction for $100 could be more than $5, depending upon the number of extras a seller chooses to draw attention to its listing. For sellers who peddle dozens of items each week, that could represent a significant bottom-line difference.
The change comes less than a week after eBay announced plans to buy comparison shopping search engine Shopping.com in a deal worth $620 million. That move gives eBay the ability to offer sellers broader exposure for their listings. In the past, eBay's sellers have been wont to stray from the auction giant because despite a slew of would-be competitors, from Amazon and Yahoo to sites such as Ubid.com, no single alternative could offer anywhere near the audience of would-be buyers and, just as importantly, bidders, that eBay boasts.
Yahoo might be one of the few competitors for eBay that has the means to change that, however, since it attracts tens of millions of visitors to its portal each month. Yahoo said the move had nothing to do with eBay's Shopping.com buy and that the change has been in the works for some six months. That time frame coincides with the latest eBay fees hike, which drew outcry from sellers.
At the time, Overstock.com moved to woo disgruntled eBay users by slashing its own auction listing fees. Overstock said it saw immediate results, with auction listings rising 50 percent in the course of a week. However, while eBay has shown signs of slowing growth in recent quarters, most analysts believe that competitive move had little long-term impact.
EBay later reversed itself on some of the fees, though a hike on the percentage charged for final sales was kept in place, as were the fees charged to sellers who maintained eBay Stores. Those fees increased as much as 60 percent. The auction giant also promised to expand phone support for sellers in a bid to smooth ruffled seller feathers. Forrester Research analyst Carrie Johnson said that eBay has long been a force in the Internet commerce world, a brand that is all but synonymous with online auctions.
Auction-style selling is something that is poised to grow as well, as more shoppers become Web-savvy. Because the bidding process is somewhat more complicated than traditional e-commerce sales from a site such as Amazon -- and because most eBay merchants do not take credit card payments directly -- such sales attract slightly more sophisticated users.
But there might be signs that consumers would welcome an alternative to eBay. Johnson said while a recent survey found eBay users still fond of the sense of community the site develops -- which builds loyalty -- Amazon.com has scored higher on overall customer experience. Other surveys have found that less than half of all eBay users say they are committed to buying only from that site.
For more information, please visit Guardian eCommerce.
Saturday, June 11, 2005
A Google Project Pains Publishers
Google can search an astonishing 8 billion Web pages. And yet, that's just a drop in the bucket compared to the knowledge that's stored in the world's libraries but not available online. So when Google announced last year that it planned to scan millions of the world's books and make them searchable online, many were thrilled. Many -- but not everyone, it turns out. In a May 20 letter, the Association of American University Presses (AAUP) blasts Google's so-called Print for Libraries program for posing a risk of "systematic infringement of copyright on a massive scale."
The letter from Peter Givler, AAUP's executive director, was obtained by BusinessWeek Online. The missive says the Google initiative has the potential for serious financial damage to the group's membership. "What I really hope the letter will do is open up a serious and substantive discussion with Google ... to get them to respond to the substantive legal issues," Givler told BusinessWeek Online.
The AAUP isn't the only organization to put Google on notice. BusinessWeek Online has also learned that in recent months, major publishers John Wiley & Sons and Random House have also sent letters to Google expressing similar concerns about the libraries program. "We don't see how a for-profit company compiling this would be considered fair use," says Allan Adler, head of legal and government affairs for the Association of American Publishers, the principal trade organization of the book publishing industry.
Random House declined to comment. Wiley released a statement saying it is "exploring issues and opportunities with Google, including the potential impact of this program on our authors, our customers, and our business." Simon & Schuster spokesperson Adam Rothberg declined to comment but added, "There are concerns out there."
Google says it's doing its best to look out for the interests of its partners, while building the best service possible. "Google was founded on this very respectful relationship with content owners," says Adam Smith, senior business product manager at Google.
The online search giant declined to comment directly on any of the complaints made in the letters. A Google spokesman would only say, "They're valued partners of ours, and we don't offer comments on partner discussions." Speaking more broadly, Smith says, "In the case of the Google Print program, whether it [be a] library or a publishing partner, we take a very conservative approach." Back in October, Google Print seemed like a dream deal for publishers. Indeed, some couldn't sign up fast enough. The search outfit invited publishing houses worldwide to send books for digitization online.
Here's what Google offered: When a book came up on Google searches, users would only be allowed to see a few pages of the book, but links would be provided to the Web sites where the books were being sold. The link would go to the publisher's site if it were handling direct sales, according to the original plan. In addition, Google said it would place sponsored links next to the text, splitting the ad revenue with the publisher. What would Google charge for this new marketing opportunity and revenue stream? Absolutely nothing. Major publishers, including Random House, John Wiley & Sons, Simon & Schuster and others signed up right away to try pilot programs of the service, each sending a few thousand books.
But in December, Google dropped the equivalent of a heavy encyclopedia on the publishers. With no advance notification, the search provider unveiled its Print for Libraries program, aimed at digitizing public-domain books from the likes of the New York Public Library, Oxford University's Bodleian Library, and the libraries of Harvard and Michigan universities. Google said it would make available full versions of public-domain books online, while making only "snippets" of copyrighted text available.
But in addition to storing the digitized books on its own servers, Google said it would provide digital copies to the libraries. Publishers now worry Google might someday distribute digital copies of copyrighted books without their or the author's approval. The publishers argue that libraries have no legal right to digitize copyrighted material by handing it over to Google.
The mass digitization of library books also raises concerns about piracy. "Nobody has convinced us that this can't be hacked," says Kay Murray, general counsel for the Authors' Guild. "They have to make sure they protect [copyrighted books]."
To be sure, not all publishers are concerned about Google's plan. "I think the big picture with Google is that [the marketing abilities] are a great benefit to publishers and authors," says David Langevin, director of electronic markets for Houghton-Mifflin. Langevin notes that in instances where authors requested to be taken off of the popular search engine, Google complied very quickly.
Some legal experts, such as Stanford Law Professor Lawrence Lessig and Harvard Professor Jonathan Zittrain, argue that the real rub in this dispute lies in the copyright laws' murkiness. "The fair-use section of [copyright] statute is fairly flexible" says Zittrain. "Google's plan doesn't disrupt the market for purchasing the book, and in that sense it should heavily favor them." Yet, legal experts also agree that Google's plan could open the door for liability for potential copyright infringement, in the event of future litigation, if the issues being raised by the publishers now aren't settled to everyone's satisfaction. "For registered works it can be up to $150,000 per infringement," says Lessig. "I don't think any judge would do that because Google seems to be operating in good faith ... but there's a huge exposure." In the end, this disagreement comes down to whether the interested parties can come to a peaceful solution -- or fight it out in the courts.
Brought to you by Guardian eCommerce.
The letter from Peter Givler, AAUP's executive director, was obtained by BusinessWeek Online. The missive says the Google initiative has the potential for serious financial damage to the group's membership. "What I really hope the letter will do is open up a serious and substantive discussion with Google ... to get them to respond to the substantive legal issues," Givler told BusinessWeek Online.
The AAUP isn't the only organization to put Google on notice. BusinessWeek Online has also learned that in recent months, major publishers John Wiley & Sons and Random House have also sent letters to Google expressing similar concerns about the libraries program. "We don't see how a for-profit company compiling this would be considered fair use," says Allan Adler, head of legal and government affairs for the Association of American Publishers, the principal trade organization of the book publishing industry.
Random House declined to comment. Wiley released a statement saying it is "exploring issues and opportunities with Google, including the potential impact of this program on our authors, our customers, and our business." Simon & Schuster spokesperson Adam Rothberg declined to comment but added, "There are concerns out there."
Google says it's doing its best to look out for the interests of its partners, while building the best service possible. "Google was founded on this very respectful relationship with content owners," says Adam Smith, senior business product manager at Google.
The online search giant declined to comment directly on any of the complaints made in the letters. A Google spokesman would only say, "They're valued partners of ours, and we don't offer comments on partner discussions." Speaking more broadly, Smith says, "In the case of the Google Print program, whether it [be a] library or a publishing partner, we take a very conservative approach." Back in October, Google Print seemed like a dream deal for publishers. Indeed, some couldn't sign up fast enough. The search outfit invited publishing houses worldwide to send books for digitization online.
Here's what Google offered: When a book came up on Google searches, users would only be allowed to see a few pages of the book, but links would be provided to the Web sites where the books were being sold. The link would go to the publisher's site if it were handling direct sales, according to the original plan. In addition, Google said it would place sponsored links next to the text, splitting the ad revenue with the publisher. What would Google charge for this new marketing opportunity and revenue stream? Absolutely nothing. Major publishers, including Random House, John Wiley & Sons, Simon & Schuster and others signed up right away to try pilot programs of the service, each sending a few thousand books.
But in December, Google dropped the equivalent of a heavy encyclopedia on the publishers. With no advance notification, the search provider unveiled its Print for Libraries program, aimed at digitizing public-domain books from the likes of the New York Public Library, Oxford University's Bodleian Library, and the libraries of Harvard and Michigan universities. Google said it would make available full versions of public-domain books online, while making only "snippets" of copyrighted text available.
But in addition to storing the digitized books on its own servers, Google said it would provide digital copies to the libraries. Publishers now worry Google might someday distribute digital copies of copyrighted books without their or the author's approval. The publishers argue that libraries have no legal right to digitize copyrighted material by handing it over to Google.
The mass digitization of library books also raises concerns about piracy. "Nobody has convinced us that this can't be hacked," says Kay Murray, general counsel for the Authors' Guild. "They have to make sure they protect [copyrighted books]."
To be sure, not all publishers are concerned about Google's plan. "I think the big picture with Google is that [the marketing abilities] are a great benefit to publishers and authors," says David Langevin, director of electronic markets for Houghton-Mifflin. Langevin notes that in instances where authors requested to be taken off of the popular search engine, Google complied very quickly.
Some legal experts, such as Stanford Law Professor Lawrence Lessig and Harvard Professor Jonathan Zittrain, argue that the real rub in this dispute lies in the copyright laws' murkiness. "The fair-use section of [copyright] statute is fairly flexible" says Zittrain. "Google's plan doesn't disrupt the market for purchasing the book, and in that sense it should heavily favor them." Yet, legal experts also agree that Google's plan could open the door for liability for potential copyright infringement, in the event of future litigation, if the issues being raised by the publishers now aren't settled to everyone's satisfaction. "For registered works it can be up to $150,000 per infringement," says Lessig. "I don't think any judge would do that because Google seems to be operating in good faith ... but there's a huge exposure." In the end, this disagreement comes down to whether the interested parties can come to a peaceful solution -- or fight it out in the courts.
Brought to you by Guardian eCommerce.
Thursday, June 09, 2005
ICANN Approves Concept of .xxx Domain for Porn
The Internet Corporation for Assigned Names and Numbers (ICANN), the oversight group for the World Wide Web, has begun negotiations that could lead to the establishment of a separate domain for pornography sites. ICANN said it has begun to have "commercial and technical negotiations" with ICM Registry about establishing a top-level domain, or TLD, that would bear the suffix .xxx.
That scheme would establish a domain on par with .com and .net where pornography sites could be segregated, theoretically making the Web safer for young people by enabling technical solutions that would steer all but approved users away from the domain. The move is a reversal of a 2000 decision by ICANN against such a domain. At the time, the non-profit group cited the objections of the adult-entertainment industry as one reason for opposing the proposal. Those companies said a segregated domain would make it easier for portals and search engines to block results from such sites.
At the time, ICANN also raised the prospect that creating a "red light district" on the Internet would create a stigma attached with visiting the domain and also raise "privacy and First Amendment" issues. However, ICM said the time is now right for the domain, with the online adult entertainment business now worth some US$3 billion annually. ICM said the number of adult-oriented sites on the Web has grown 18 times in the last six years to some 1 million domains, which account for some 10 percent of all online traffic.
ICM will operate the domain, which will be overseen by the International Foundation for Online Responsibility, a Canadian-based non-profit. Sites that apply for admission to the domain will be required to adhere to policies that prohibit marketing to children and ensure that sites are not marketed as containing child pornography. The plan has been backed by government regulators in the U.S. and family groups and others, but is likely to raise questions about privacy and security. For instance, some bloggers have raised the prospect that traffic to the domain could be monitored and recorded.
Pornography sites would not be required to adopt the .xxx domain, but would have the option of doing so. The theory behind the domain is that it would make it easier for Web users seeking pornography to find legitimate sites, while making it easier for others to steer clear of them.
ICANN has moved to greatly expand the number of sponsored TLDs in recent months, approving plans to launch domains .jobs and .travel at its recent annual meeting, with those domains set aside for job postings and travel-related sites, respectively. ICANN is still weighing plans to establish domains under .car, for the catalan language, .post for postal services and .mobi as a domain set aside for mobile-friendly Web content. It is also weighing plans for four more, including .Asia, .mail and two .tel domains.
While many analysts say the wider range of top level domains is a positive development, one that could aid Web navigation in many cases, especially in the instance of the mobile domain, others have been critical of ICANN's process for arriving at the decisions to expand and for who will win the potentially lucrative contracts to run the domains. "This about-face by ICANN [on .xxx] demonstrates yet again how major decisions by the organization are made without significant, broad public discourse," Lauren Weinstein, the founder of People For Internet Responsibility, said. "Ironically, it also reverses one of the more sensible arguments that ICANN had previously been making."
Weinstein said that over time, the .xxx domain "is likely to create a political and litigious firestorm over time, as various government entities move to try force 'adult' sites into the new domain space, and battles erupt over what an adult site is defined to be. "The creation of .xxx may set the stage for potentially damaging and disruptive content control and censorship wars that we can hardly even imagine today," she said in an e-mail message. "It's worth thinking through these issues very carefully before going down that path."
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
That scheme would establish a domain on par with .com and .net where pornography sites could be segregated, theoretically making the Web safer for young people by enabling technical solutions that would steer all but approved users away from the domain. The move is a reversal of a 2000 decision by ICANN against such a domain. At the time, the non-profit group cited the objections of the adult-entertainment industry as one reason for opposing the proposal. Those companies said a segregated domain would make it easier for portals and search engines to block results from such sites.
At the time, ICANN also raised the prospect that creating a "red light district" on the Internet would create a stigma attached with visiting the domain and also raise "privacy and First Amendment" issues. However, ICM said the time is now right for the domain, with the online adult entertainment business now worth some US$3 billion annually. ICM said the number of adult-oriented sites on the Web has grown 18 times in the last six years to some 1 million domains, which account for some 10 percent of all online traffic.
ICM will operate the domain, which will be overseen by the International Foundation for Online Responsibility, a Canadian-based non-profit. Sites that apply for admission to the domain will be required to adhere to policies that prohibit marketing to children and ensure that sites are not marketed as containing child pornography. The plan has been backed by government regulators in the U.S. and family groups and others, but is likely to raise questions about privacy and security. For instance, some bloggers have raised the prospect that traffic to the domain could be monitored and recorded.
Pornography sites would not be required to adopt the .xxx domain, but would have the option of doing so. The theory behind the domain is that it would make it easier for Web users seeking pornography to find legitimate sites, while making it easier for others to steer clear of them.
ICANN has moved to greatly expand the number of sponsored TLDs in recent months, approving plans to launch domains .jobs and .travel at its recent annual meeting, with those domains set aside for job postings and travel-related sites, respectively. ICANN is still weighing plans to establish domains under .car, for the catalan language, .post for postal services and .mobi as a domain set aside for mobile-friendly Web content. It is also weighing plans for four more, including .Asia, .mail and two .tel domains.
While many analysts say the wider range of top level domains is a positive development, one that could aid Web navigation in many cases, especially in the instance of the mobile domain, others have been critical of ICANN's process for arriving at the decisions to expand and for who will win the potentially lucrative contracts to run the domains. "This about-face by ICANN [on .xxx] demonstrates yet again how major decisions by the organization are made without significant, broad public discourse," Lauren Weinstein, the founder of People For Internet Responsibility, said. "Ironically, it also reverses one of the more sensible arguments that ICANN had previously been making."
Weinstein said that over time, the .xxx domain "is likely to create a political and litigious firestorm over time, as various government entities move to try force 'adult' sites into the new domain space, and battles erupt over what an adult site is defined to be. "The creation of .xxx may set the stage for potentially damaging and disruptive content control and censorship wars that we can hardly even imagine today," she said in an e-mail message. "It's worth thinking through these issues very carefully before going down that path."
Brought to you by the Guardian eCommerce Safe Site Privacy Seal Program.
