So Long, Snap: NBCi's Secret Plan for Web Success

So Long, Snap: NBCi's Secret Plan for Web Success

So Long, Snap: NBCi's Secret Plan for Web Success

Moneybox
Commentary about business and finance.
June 14 2000 1:43 PM

So Long, Snap: NBCi's Secret Plan for Web Success

It's something of a cliché--and a silly one at that--to argue that "old" entertainment companies don't really "get" the Internet. By and large those companies are run by smart people, every one of whom grasps that the Web represents some sort of threat to and some sort of opportunity for their business. This does not alter the fact, however, that those companies' efforts to build new brands on the Web, or extend their old ones, have often been puzzling.

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This line of thinking comes to mind partly because of the recent travails of NBC Internet--the Net spinoff of NBC--which has warned it would not hit its estimated numbers for the quarter. In a conference call yesterday, the CEO of NBCi, Will Lansing, blamed the short-term trouble on two acquisitions and (in comments that have drawn more attention) on the "soft dot-com ad market." Apparently something like 90 percent of NBCi's advertising is currently from online companies, who, as we as all know, are beginning to drop like flies.

The stock-analyst herd met this warning with a quick series of downgrades; meanwhile, NBCi's share price dropped almost 30 percent. The company has essentially promised a reinvention of itself to be launched in the fall. The new and improved site will be a one-stop shop for ... well, for what, exactly?

When NBCi was launched last year, it described itself as "a branded global integrated media company ... [that] integrates major media platforms, including Internet, broadcast and cable television and radio, to deliver powerful ways for partners to connect with users and customers." It melded together a portal-type site called Snap.com, a retailer called Xoom.com, and the Internet assets of NBC (minus, significantly, CNBC and MSNBC), and its "flagship site" was Snap.com. Part of this week's announcement is that the once-touted Snap name is being done away with, because it's "far from a well-known brand," as Lansing put it in the conference call. The new flagship site will be NBCi.com itself, and we can look forward to a big promotional push around the NBCi brand beginning with NBC's new season in the fall. This makes some sense in terms of simple recognizability--the name NBCi is very close to the name NBC, after all.

NBCi says that it will be ... "an infomediary." What an "infomediary" is, basically, is a "personal agent" or a "broker" that will help users find content and commerce "opportunities." In other words, it's a search-engine-based portal, similar to a Yahoo or a Lycos, but apparently meant to focus on entertainment. This will reach beyond just NBC content, of course, since the effectiveness of any "broker" brand depends on its perceived impartiality (something that Lansing himself suggested in passing during the conference call). The site will feature a collaborative filtering element, so that in theory the more you use it the better it will be at guiding you to things you want, but it's basically about searches. "We are in the absolute forefront of search," the CEO said.

It's possible that NBCi has some technology that puts it at the "forefront of search," although this is the first I've heard of it. But if that's true, what does it have to do with NBC, the television network--you know, the brand they're supposed to be leveraging here? It's as if a restaurant chain decided to leverage its brand by publishing a competitor to Zagat's. Maybe it's great, but getting consumers to believe that will be a challenge.

NBCi's dilemma points to a fundamental clash that's affecting big entertainment companies' efforts to build useful Web businesses. To be a sustainable new brand, a company will have to deliver something that is very useful, and very different, to a lot of people, for a long time. If NBCi can do that, then it's hard to see why it wouldn't have been successful under the Snap name. If not, then a more recognizable URL and a big ad blitz may help. But not for very long.