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Subject: November 2002 VMS3.info: Internet Information Provider Services Industry Analyzed via the Value Framework
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November 5, 2002 *4,400 subscribers* Volume 4, Issue 11
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Inside this Issue:

Internet Information Provider Services Industry Analyzed via the Value Framework
by Mitchell Levy, Author, E-Volve-or-Die.com, Author,
the Value Framework™
and Yukako Saito, Researcher of Recruit Co. in Japan


The IIPS industry is now an integral part of our everyday lives, whether at home, at work, or both.


The Internet, which spread quickly in the second half of the 1990s, has become an essential tool for a large percentage of the population to efficiently gain information. The Internet has world-wide broadcasting capability, a mechanism for information dissemination, and a medium for collaboration and interaction between individuals and their computers regardless of their geographic location. As such, the Internet Information Provider Service (IISP) industry has become an indispensable entity in our daily lives-as a door opening up a world of information, and as a gateway to other Internet activities.

The IIPS industry is now an integral part of our everyday lives, whether at home, at work, or both. In less than a decade, it has been transformed from a technological curiosity to a resource where hundreds of millions of consumers shop, look for news, information, or communicate with one another, and a platform for both entertainment as well as serious business. The IIPS industry provides not only information but also interactive services, allowing people to purchase goods, make reservations, and apply to offers on good or services directly online. As users information requests change, the role of the IIPS has changed accordingly.

With the Internet's transformation from marvel to mainstream, expectations from Internet users have increased as they increasingly go online. Users now demand Web sites that not only offer credible information but are also updated frequently and are easy to navigate. The most successful IIPS companies understand the power these users have, and they take advantage of this to attract and motivate them by offering reliable and convenient products and services.


IIPS consist of following key content segments:

  • Databases of research, projects, and conferences
  • Government profiles, legislation, national laws of different countries from all over the world
  • Profiles of private companies, presentation of products, promotions and selling schemes
  • Career opportunities such as job vacancy listings, job agencies, and online ads
  • Educational resources such as lecture notes, interactive tutorials, curriculum outlines
  • Computer manuals, archives, IT discussions, freeware, and shareware
  • Tourist accommodation, reservations, tourist guides and weather conditions
  • Culture, art and religion of different nations
  • Entertainment in the form of sports updates, online magazines, games, TV listings, galleries, music, cinema, soap opera
  • Various other interactive resources

The IIPS industry was originally born in the United States, and spread all over the world, inspiring innovative IIPS companies rooted in the culture of each country.

This analysis uses the Value Framework™ to look at the entire industry with emphasis on comparing the US and Japanese models. We observe the strategy deployed, strategy managed, and strategy evolved by this industry to identify the keys to success today and tomorrow.


One of the most important developments in the evolution of the Internet and IIPS was the World Wide Web (Web), an easy-to-use interface that appeared in 1989. Before the Web, Gopher, a menu-based interface, was used. Gopher was the first simple way of finding information on the Internet by allowing access to textual information. Navigating the Internet required in-depth knowledge of computers, the different operating systems, and the use of puzzling commands. Gopher made it possible to search information on the Internet without the need to use complicated codes. It was, however, limited to presenting textual files from a menu of textual items, and does not offer an attractive display of graphics.

Through the Web, the Internet developed the ability to display information in different multimedia forms (text, images, audio, video) that made it extremely popular. Following the introduction of the Web, several Internet Service Providers (ISPs) started to offer dial-up Internet services to their subscribers. Many companies and businesses also started to offer Internet-related products and services, such as search engines, browsers, and programming languages for Web development. Currently, there are hundreds of millions of Web sites on the Internet providing a wide-range of information (cultural, political, scientific, industrial, etc.), in addition to e-commerce and online transactions. The following fundamental external influences have affected this industry in the last dozen years:

  • Late 1980's: The World Wide Web was born. British physics researcher and communications specialist, Tim Berners-Lee developed the World Wide Web for CERN (European Nuclear Research Center) in Geneva, Switzerland. The concept started from an information system design proposal entitled "Information Management: A Proposal", that aimed at providing links to documents over the Internet allowing researchers to swiftly share results.
  • Early 1990's: A programmer named Marc Andreessen developed the first mouse-based browser called Mosaic (http://www.ncsa.uiuc.edu/SDG/Software/Mosaic/NCSAMosaicHome.html), at the University of Illinois National Center for Supercomputing Applications (NCSA). But after a year, Andreessen left NCSA to form Netscape with Jim Clark. Andreessen and Clark then developed a new browser for the Web called Netscape Navigator. Netscape Navigator was the first commercially available Web browser and was exclusively distributed by Netscape Communications Corporation.
  • 1994: Yahoo! was born. Stanford Ph.D. students, David Filo and Jerry Yang started it as a hobby. However, it achieved more than 100,000 accesses within 10 days.
  • Late 1990's: Over 40,000,000 hosts connected to the Internet. The Internet gradually immersed into consumer's daily life. People started to use the Internet not only for searching information, but also for shopping, learning, and trading. E-Commerce sites such as Amazon and eBay gained popularity.
  • Early 2000's: DSL and cable modems enable exchange of large amounts of data through the Internet. The content has gradually increased in size to include high-resolution images and motion pictures. Personalized content and services based on user's implicit and explicit characteristics increased utilization (e.g. Amazon's recommendations based on purchase history of peer consumers).


Despite the complexities that emerge from the product/service offerings and influences already described, to a large extent, strategic options for participants within each segment remain the same! They must choose from and strategize the types of market reach and range of product offerings that their companies will pursue. The following matrix illustrates the options, along with example players as of late-2002:




1) Yahoo!



This leads to the question of which companies have deployed a strategy, managed it, and then evolved it successfully in light of the dynamics of this business sector since 1994. The balance of this article will apply the Value Framework™ to sample companies that deployed strategies in one or more of the four strategy segments, and examine/analyze what contributed to their success or failure.



30-Second Pitch
The first online navigational guide to the Web, founded in 1994. Yahoo! is the leader in traffic, advertising, household and business user reach and has evolved into a global brand that has changed the way people communicate with each other, find and access information, and make purchases. This horizontal portal inspired others such as Excite, AltaVista, and AOL. Yahoo! contains a wide variety of subjects and topics, that are usually of general interest.
Strategies Deployed in the Late 90's Environment
Focused on becoming increasingly essential to the lives of consumers and aimed at being the most familiar information template of the Internet allowing ease and convenience of use by the consumer.
Strategies Managed in 2000-2002
Started with its comprehensive, hand-built directory arranged according to subject. This made is easy for Yahoo! to track their personal interests and add new services tailored to their needs. Yahoo! offers consumers a broad and deep array of communications, commerce and content services in over 100 distinct properties that lead consumers to make Yahoo! their home on the Internet and wireless devices.
Strategies Evolved Today and Tomorrow
With the current business slump, Yahoo! realized the need to have non-advertising based revenue models and have started to charge fees for some of its services, such as auction services. As a result of these fees, the number of listed items had fallen to nearly half, however the rate of successful bids has almost doubled. More services are being switched to a fee basis. Yahoo! has started to expand their services for the broad band era. Yahoo! BB is an integrated broadband service provided jointly with BB Technologies Corporation (BBT). The service includes ADSL services, Internet connection (ISP) services, a broadband portal site and content-provision services, and other services.


30-Second Pitch
AOL, the world's leading interactive service, is revolutionizing the lives of more than 35 million members around the globe.
Strategies Deployed in the Late 90's Environment
AOL aimed to become a pioneer of 'on-line communication'. AOL made it easy for its customers to seamlessly use technology services such as e-mail, chat, and instant messaging. ICQ is a well-known on-line communication service that has keywords for simple navigation and a Buddy List feature to enable instant messaging by displaying other members who are online.
Strategies Managed in 2000-2002
The AOL mantra during this period was to provide interaction, communication, and community. At the height of the Internet boom, AOL acquired Time Warner while simultaneously expanding its user base. AOL offers useful and easy services, and combined with Time Warner's entertainment it aims to be the 'primary' entertainment vehicle for consumers.
Strategies Evolved Today and Tomorrow
Today, AOL offers an easy perspective in online communication, largely enhancing the features and functions members use and care about -- more convenient e-mail, instant messaging, more relevant content that's easily personalized for members' interests, easier and more powerful Parental Controls to keep children safe online, new tools to build online communities, and an automatic reconnect feature to give the customer the appearance of a seamless connection. AOL is now a conglomerate company moving toward the ISP offering comprehensive access from telephone, cable, and satellite and providing entertaining interactive media for the broadband age.

@nifty (Japan)

30-Second Pitch
NIFTY Corporation, originally the Internet business sector of FUJITSU, provides Internet access, content, community and e-commerce services to Japanese consumers and business customers. @nifty, NIFTY's Internet service brand, has 3.86 million subscribers (No. 1 in Japan). NIFTY also offers a successful business platform for online businesses.
Strategies Deployed in the Late 90's Environment
Fujitsu announced its strategy of 'Everything on Internet' in 1999. For this implementation, Nifty merged their ISP 'Info Web' and 'Nifty Serve' into a single mega ISP called '@nifty'. Fujitsu intended to make @nifty a well appointed, well founded, and well ordered Internet metropolis that can support any lifestyle.
Strategies Managed in 2000-2002
@nifty keeps developing new value for users. Their great innovations, such as credit card accounts, business accounts, and the copyright system for reviewers help them to lead the Japanese Internet market by engaging the convenience and trust of @nifty members. The payment system was carefully designed, because Japanese users are not positively inclined to use credit cards online. Most of the content is designed for the members who use the Internet connection service of @nifty. All users are identified and credited by ID and password. There are small charges for most of the content, which is automatically added to the monthly membership fee.
Strategies Evolved Today and Tomorrow
Today, @nifty has grown to be Japan's largest full range online content and services provider. Their attractive high quality services have been expanded. @nifty initially provided a domestic and overseas e-mail connection service, Telnet connection service to NIFTY SERVE and a provision of net-news. The current challenge is to gain new customers by allowing non-members to see premium content for low monthly fees. Through quality content, they plan on attracting new members.

Lessons learned from the Broad Market - Broad Product /Service Strategy:

  1. The IIPS for the broad market and broad product/service are defined as the 'quintessential portal.' The portal should serve as a starting point through which a consumer can connect to other Web sites, a door opening to a world of information, a gateway to other Internet activities.
  2. A portal is like an entire Internet community that provides access to services the consumer is interested in, such as e-mail, chat forums, online shopping, research, etc., in addition to a search engine or directory. Originality and uniqueness is key.
  3. The portals can strengthen the relationship with its consumers by combining the content with infrastructure services such as Internet connection and ADSL.
  4. In order to reinforce trust, it is necessary to charge for content and guarantee quality. The payment system has to be carefully designed to let the user pay without any stress, especially for Japanese users, who are notably uncomfortable paying online with credit cards.


  • SERVICES: Portal to all facilities. The portal creates a 'singular' Internet community
  • CONTENT: Chat, search, e-mail, e-commerce, instant messenger with holistic topics
  • INTERFACE: Horizontal search system allows large scale searching but can also be cumbersome
  • REVENUE: Charge for usage of content and service




30-Second Pitch
Founded in 1996, BizRate.com is the Web's most trafficked comparison-shopping portal. As a trusted source, millions of online shoppers count on BizRate.com to improve their online shopping experience by organizing product and vendor choices in one marketplace. Shoppers can compare products, prices and stores, as rated by real customers.
Strategies Deployed in the Late 90's Environment
BizRate.com aimed to be a powerful product search engine, single-click shopping, offering exclusive shopping deals, and price and delivery comparison shopping - all in one convenient marketplace - that enable consumers to "shop smartly" across 19 popular store categories and more than 2,000 merchants. Through BizRate.com's customer-powered Store Ratings, shoppers can compare sellers across 10 service dimensions including price, on-time delivery, customer support, shipping and handling, privacy policies, product representation, product selection, product information, Website and ease of ordering.
Strategies Managed in 2000-2002
BizRate.com does not charge merchants up-front slotting or advertising fees to be featured in its marketplace. Sellers are charged only on a pay-for-performance basis according to sales leads generated through BizRate.com. And because all BizRate.com sellers have been rated for quality by online shoppers, merchants can control their spending by targeting shoppers who make purchasing decisions based on quality as well as price.
Strategies Evolved Today and Tomorrow
BizRate.com strives to gain the appreciation from its users by making it convenient to do business and save time. Shoppers choose BizRate.com for its unrestricted choice of sellers and products, convenient shopping tools and informative merchant ratings - all organized in a single, open and competitive marketplace. Sellers choose BizRate.com because its dynamically priced Seller's Auction puts the seller in control. Sellers can target relevant buyers at their price threshold and within their specific product categories and only pay for performance. BizRate.com will continue to be the tool for the enhancement of consumers and businesses shopping needs.


30-Second Pitch
Founded in April 1998, priceline.com is an information service specifically created to leverage the unique attributes of the Internet for the benefit of consumers and businesses. Through its Name Your Own Price services, priceline.com enables consumers to make purchase offers for goods and services at the prices they want to pay. In return, consumers agree to varying degrees of flexibility in the brand and product features they receive for their price.
Strategies Deployed in the Late 90's Environment
They invented the new system for on-line shopping. Once priceline.com receives a consumer's purchase offer, the system automatically tries to locate a participating business willing to sell its product at the consumer's desired price.
Strategies Managed in 2000-2002
priceline.com does not publish accepted prices, and does not identify a seller until after the sale is completed, it is an effective and efficient outlet for businesses to move excess or perishable inventory without affecting their retail pricing structure. priceline.com is a unique form of commerce. It is not an auction or a reverse auction, since there is no competition among buyers or sellers to set the price. priceline.com is not an aggregator. Each buyer's offer is handled as it is received, and individuals have just as much (if not more) buying power than if they were in a group.
Strategies Evolved Today and Tomorrow
priceline.com does not publish accepted prices, and does not identify a seller until after the sale is completed, it is an effective and efficient outlet for businesses to move excess or perishable inventory without affecting their retail pricing structure. priceline.com is a unique form of commerce. It is not an auction or a reverse auction, since there is no competition among buyers or sellers to set the price. priceline.com is not an aggregator. Each buyer's offer is handled as it is received, and individuals have just as much (if not more) buying power than if they were in a group.


30-Second Pitch
eCAMPUS.com is an educational resource provider of new and used textbooks, trade books, college emblematic and Greek apparel for men and women, electronics, computers, gifts, and other services (assignment BBS, chat) traditionally associated with the college experience.
Strategies Deployed in the Late 90's Environment
eCAMPUS.com aimed to be the innovative, multi-award-winning site using technology to market products and services to a variety of educational, corporate, and online content providers.
Strategies Managed in 2000-2002
Provide the easiest, fastest, and cheapest way for college and university students to buy textbooks and other relevant stuff.
Strategies Evolved Today and Tomorrow
Today, eCAMPUS.com is a fully operational e-commerce business designed to provide the highest-quality products and services to students and campus communities wherever they happen to be. The Internet storefront is fully integrated with a state-of-the-art distribution facility and offers the largest in-stock selections of new and used textbooks available online. eCAMPUS.com actively collaborates with other Internet services through an easy to hook up affiliate program. eCAMPUS.com's continued commitment is to offer great prices, quality products, and superior customer service.

ISIZE (Japan)

30-Second Pitch
ISIZE is currently the second largest portal site in Japan, which Recruit Co. started in 1998. It generates USD $315 million revenue, and more than 1 million page views per day. ISIZE provides a wide variety of services linked to 15 lifetime events, such as Recruiting, Real estate, Wedding, Travel, and Education. Most of the content is strongly connected to the information magazines and individual on-line services of Recruit. ISIZE is the entrance to the Internet media for all Recruit customers.
Strategies Deployed in the Late 90's Environment
In 1995, the experimental service portal site called 'Mix Juice' was started. It had only the function to complement the information magazine issued by Recruit Co. ISIZE was created based on Mix Juice, but was not only a complement to the magazines, but also aimed to develop the network business. In addition to the core 15 information domains, Recruit developed 11 new information domains especially for ISIZE to increase the traffic and foster earning capacity. ISIZE aimed to be a media offering wide variety of contents for a wide range of target.
Strategies Managed in 2000-2002
Earning (sales profit) is the most important measurement. Page views and unique users are not a priority. Strategic priorities were concentrated on highly profitable content.
Strategies Evolved Today and Tomorrow
ISIZE has established 15 life scenarios, and plans to expand the current functionality to make it possible not only for comparison and study as a portal site, but also to make requests for materials and estimates and to make reservations and applications. In 2002, the profitability of each ISIZE domain directly corresponded to the ongoing information magazine. The next challenge is to unify the multiple information domains to work dynamically, and offer horizontal services. There is also a need to create a revenue model on the customer side.


Lessons learned from the Narrow Market - Broad Product/Service Strategy:

  1. It is important to offer a quality product/service rather than a quantity product/ service. Depth of service is required to support and meet the user's domain needs
  2. The online communication service should be used to establish a 'daily use' of the service
  3. It is key to continually poll the consumers desire and offer the complex services that satisfy those needs


  • SERVICES: High quality, depth of information for key domain categories
  • CONTENT: E-Commerce, e-mail, several categories in certain service/industry
  • INTERFACE: Easy navigation to make comparison of service/product, detailed search available to promise accurate results
  • REVENUE: Revenue is generated primarily from the clients (business) via affiliate and advertising models



30-Second Pitch
Worlds most popular search engine with a very large number of users, and a laser-like focus on finding the right answer for each and every one of them 150 million times a day. Google offers the fastest, easiest way to find information on the Web. By accessing its index of 2 billion Web pages, Google delivers relevant results to users all over the world, typically in less than half a second.
Strategies Deployed in the Late 90's Environment
Google deployed the strategy to deliver the best search experience on the Internet by making the world's information universally accessible and useful. The Google search engine features an easy-to-use simple interface, advanced search technology, and a comprehensive array of search tools for accessing online information. Users are able to search for and find content in many different languages; access stock quotes, maps, and news headlines; or even get phone book listings for every city in the United States.
Strategies Managed in 2000-2002
Google has developed an advanced search technology that involves a series of simultaneous calculations typically occurring in less than half a second-without human intervention. This unique technology is licensed to many other search engines.
Strategies Evolved Today and Tomorrow
Today's major portals and corporate sites from all over the world, spanning all Internet platforms, have selected Google search services for their search technology requirements. Google continues to strive to answer questions of customers and moves toward creating the 'Semantic' Web.

2ch (Japan)

30-Second Pitch
2ch is the largest bulletin board system (BBS) in Japan. It allows anyone to write any discussion by category, with over 300 BBS and an unbelievable number of threads per category. 2ch is a privately owned non-profit business that has generated the top 5 page views per day since 1998.
Strategies Deployed in the Late 90's Environment
The strategy deployed was to set up the BBS as a free on-line community to let people discuss any topic without restriction.
Strategies Managed in 2000-2002
There is no management. There is no organization. It is a totally uncontrolled BBS. No trust, no apparent time savings for the customer.
Strategies Evolved Today and Tomorrow
Since this 2ch site has appeared, anybody can write anything anonymously on the Web. 2ch triggered the change in other Japanese on-line community sites. 2ch offers one single function extremely well and user satisfaction is very high. 2ch must experiment with revenue models. The 2ch BBS interface could be available for other Web sites with an affiliate model to generate revenue. The company seems prone to be acquired by a complementary portal.


Lessons learned from the Broad Market - Narrow Product/Service Strategy:

  1. Concentrate on a single function with simplified usability for all Internet users
  2. It is difficult to control the content because it changes based on the user's request
  3. The functionally is so rich and specialized that it is licensed to other IIPS companies as an application
  4. The revenue model must drive from its functionality (e.g. search engine, BBS, auction) rather than its content


  • SERVICES: Search engine, BBS, on demand application provider
  • CONTENT: Demand based information
  • INTERFACE: Allows user to view only what is desired without going through extra layer of navigation
  • REVENUE: Is subject to its function, therefore earnings are less (or 0) as it is less associated with actual 'trade'. Once the user has found the link he wants, it has lost that customer to another site.




30-Second Pitch
On-line support of marriage-bound women and men through the sometimes challenging but always exciting process of planning a wedding and starting a new home. The site not only offers professional expertise, but personal experiences of wedding guests, wedding party members, and as brides and grooms who want the most comprehensive and customizable wedding planning, gift registry and communication resource on the Web.
Strategies Deployed in the Late 90's Environment
WeddingChannel.com has been offering a complete menu of wedding-related services since 1997, including personalized Web pages, planning tools, local business directories and the largest database of bridal fashions. It focused on providing comprehensive information, products and services, including, a directory of wedding professionals, interactive planning tools, and customizable Web pages. From gowns and invitations to travel and finance, WeddingChannel.com assists the couples through every step from pre-wedding to post-honeymoon.
Strategies Managed in 2000-2002
Through exclusive, strategic relationships with bridal registry leaders, including Federated Department Stores, Inc., Tiffany & Co., Crate and Barrel, Neiman Marcus, Williams-Sonoma, Restoration Hardware, REI, and Gump's, WeddingChannel.com offers couples the best selection of gifts to add to their registries and provides wedding guests a convenient way to purchase gifts online. It becomes a big advantage of Weddingchannel.com.
Strategies Evolved Today and Tomorrow
The WeddingChannel.com has recently announced the registration of its one-millionth couple. WeddingChannel.com's rapid membership growth is due primarily to its unique one-stop registry service. The WeddingChannel.com has a simple-albeit large-goal, that when a couple thinks about weddings in the future, they should think about the WeddingChannel.com.

The Princeton Review

30-Second Pitch
The Princeton Review is an on-line learning service to help students who want to achieve better scores. The company was founded in 1981.
Strategies Deployed in the Late 90's Environment
The Princeton Review offered classroom and online test preparation courses, private tutoring, and operates educational Websites. Via the company's free Website, it enabled students to research, select, apply to, prepare for, and learn how to pay for their higher education, while its Embark management tools streamlined the university admissions and recruiting processes.
Strategies Managed in 2000-2002

Two simple criteria are fundamental on Princeton review of its business:

  1. 'Did we keep our promises?'
  2. 'Did we do it as efficiently and pleasantly as possible?'

In order to satisfy student requests, their data formats are carefully designed to be useful and available. Since one test can't be right for every college student, Princeton Review offers a customized service with the need for parents, students, and educators to choose a course of study.

Strategies Evolved Today and Tomorrow
Their services are spread to offer comprehensive services for the student market such as: Test Preparation Services, Admissions Services (to help students make the right educational and career decisions), K-12 Services (to prepares younger students for state assessment testing with its powerful online service www.homeroom.com and related print products and professional development seminars.) The Princeton Review also authors more than 175 print and software titles on test preparation, college and graduate school selection, and admissions and related topic. All businesses are expandable for future success.


30-Second Pitch
The Recruiting information Web site connects the most progressive companies with the most qualified career-minded individuals offering innovative technology and superior services that give them more control over the recruiting process.
Strategies Deployed in the Late 90's Environment
Aimed to be the lead career focused on-line magazine connecting companies with the most qualified individuals.
Strategies Managed in 2000-2002
Manage all hiring processes, from sourcing and screening to trucking, selection, and reporting.
Strategies Evolved Today and Tomorrow
Today, Monster is aimed to be a lifelong career network, providing continuous access to the most progressive companies, as well as interactive, personalized tools to make the process effective and convenient. Features include: My Monster, customer personal career management office; resume management, with the ability to store up to five different resumes; a personal job search agent; a careers network; chats, and message boards; privacy options; expert advice on job-seeking; and free career management newsletters.


30-Second Pitch
The largest predominantly online travel agency in the United States providing travel-planning services on the Web.
Strategies Deployed in the Late 90's Environment
To build innovative and robust technology to power their travel marketplace. In particular, Expert Searching and Pricing platform (ESP) is an industry-leading platform that includes two components: a fare searching engine that enables broad and deep airline fare and schedule searches and a common database platform that enables Expedia to bundle all types of travel services together dynamically. This bundling further enhances Expedia's ability to cross-sell complimentary inventory types to customers originally considering only one type of travel inventory.
Strategies Managed in 2000-2002
Expedia diversified its business model to include both the agency model and the merchant model. Under the agency model, Expedia acts as an agent in the transaction, passing a customer's reservation to the travel supplier (airline, hotel, car rental company or destination service provider), and receives a commission from the travel supplier for its services as an agent. Under the merchant model, they receive inventory (hotel rooms, airline seats, car rentals, destination services) from suppliers and then process the transactions as the merchant of record in the transaction. Acting as a merchant enables them to achieve a higher level of gross profit per transaction than in the agency model and provides better prices to customers than in agency transactions. Integrating merchant inventory with the ESP technology platform has enabled Expedia to create product offerings that benefit both customers and suppliers, and to dynamically bundle in real time a variety of travel components to suit the individual customer's requirements.
Strategies Evolved Today and Tomorrow
Expedia continues to work on its diversified business models generating positive customer experiences.

Ikyu (Japan)

30-Second Pitch
A popular Japanese travel information provider, focused on high-end travel. Ikyu provides on-line search and reservation for 1st class hotel suite room, and offer auction service for special stay plan with competitive prices.
Strategies Deployed in the Late 90's Environment
Focused on '1st class hotel' offering quality-oriented services with competitive prices.
Strategies Managed in 2000-2002
Ikyu strategically affiliated itself with the hotel industry and introduced special offers, usually 60% off. Ikyu accepts reservations till the last minute for customer convenience. Auction service and newsletters allow them to have personal information that creates engaging robust relationships.
Strategies Evolved Today and Tomorrow
Ikyu established the presence in market with unique concept and niche service. Today Ikyu is the second largest travel information Web site in Japan. The membership increased to 180,000. Ikyu recently started the same services tailored to the senior market.


Lessons learned from the Narrow Market - Narrow Product/Service Strategy:

  1. There is demand for 'specialist info and services' for key niche purposes.
  2. Collaboration with a big portal is an efficient way to increase the traffic and enhance the brand. The portal and this niche create a synergistic relationship.
  3. The market/industry dominant player will gain the users.


  • SERVICES: Niche and specialized
  • CONTENT: Customized and personalized issue with specialty
  • INTERFACE: Allows the user to concentrate on one category they are interested in
  • REVENUE: Charges are different based on the industry, however the earning is generated from either the business or consumer side. Should be more dynamic based on market conditions.


The Internet is a widespread information infrastructure. The initial prototype was called the National (or Global or Galactic) Information Infrastructure. The Internet's influence reaches throughout society as we move toward increasing the use of online tools for e-commerce, information acquisition, and community operations.

The broad market IIPS industry will expand both in breath and depth of its services, and gradually shift its revenue made from advertisement to product/services. The consumer is starting to perceive the value of a secure Internet environment and valuable well-designed content. The broad market participants have a role as the gateway to the Internet. Their services must be reliable and trustworthy enough to encourage consumers to share their personal information and spend money. The next stage is to create a platform for fee collection without losing the convenience and time saving components that users expect.

The narrow market IIPS should determine what the user's purpose is in visiting the site and reflect that in its structure and content. Personally customized content and one-to-one communication attracts users, which is difficult from a complex portal site. From the business end, a robust earning system is required to foster the relationship with industry as an advantage of service.

One of the key factors in the success of both the broad and narrow markets will be outstanding reliability. There is much mistrust on the Internet. Users want to know who runs the site, how to reach them, read the privacy policy, and how the site deals with mistakes, whether informational or transactional. It is important to navigate easily and to be able to trust the information on a Web site. User's demands continue to change. However, trust and navigation remain the key factors of success for an IIPS and all the companies analyzed are heeding these fundamental issues.


About the Authors:

Mitchell Levy, is President and CEO of ECnow.com (http://ecnow.com), an e-commerce management consulting company helping individuals and corporations transition from the industrial age to the Internet age through strategy, marketing, and off-the-shelf and customized on-line and on-ground training. He is the author of the book E-Volve-or-Die.com (http://e-volve-or-die.com), creator of the Value Framework and author of the Value Framework Workbook (http://ecnow.com/value).

Read more about Mr. Levy: http://ecnow.com/ml_bio.htm
Public speaking appearances I've given: http://ecnow.com/speaking.htm
Read about ECnow.com's media coverage: http://ecnow.com/media


Yukako Saito is researcher of Recruit Co. in Japan (www.recruit.co.jp) that provides a strong on-line and off-line matching platform for recruiting, education, real estate, travel, and weddings. Recruit's focus is around 'Lifetime events, offering reliable information to the consumer along with a variety of choices.


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