Copyright 2001 John Zipperer.
(1/24/01) What does Volkswagen have that another German company, Deutsche Welle, doesn't? It has the blessing of an American court to control a domain name it believes to be intimately related to its name. And it's thanks to the slow but steady maturation of the Internet into a regulated business forum.
Most recently, the giant German automaker Volkswagen won a federal appeals court decision forcing Internet service provider Virtual Works to give up the domain vw.net. It's not a victory for domain diversity, I suppose, but it is one for common sense.
But in other recent news, the German edition of Internet World reported that Deutsche Welle, a German media company, was rebuffed by the World Intellectual Property Organization (WIPO) in its attempt to gain control of the dw.com domain. DiamondWare, an American company that manufactures interactive audio technology, already had the dw.com domain and hailed WIPO's ruling that Deutsche Welle abused procedures for domain names.
A statement issued by DiamondWare last week quoted its lawyer, John Berryhill, as saying, "It is unfortunate that the domain resolution policy doesn't provide for penalties against abusers like Deutsche Welle. DiamondWare has been forced to defend itself against the German government, on the basis of a complaint that has no merit. A court of law would have been able to order sanctions for bringing a frivolous lawsuit."
Though decided by two different bodies, the cases are instructive of what will, no doubt, continue to be a feature of Net-connected business. Though Deutsche Welle believed that DW was just as much its name as VW is Volkwagen's (it syndicates, in the U.S., an English-language news program called DW-TV), the company couldn't make that decision stick without outside adjudication. In fact, Dale Cendali, a partner at O'Melveny & Myers in New York who specializes in intellectual property law, called the Internet "a full employment act for trademark lawyers."
Cendali made her comments at a meeting of the New York State Bar Association Tuesday, in which she also pointed to ICANN rules that allow people to file complaints and have them heard before a tribunal for a fee of $1,000-$3,000. A decision is supposed to follow within two months. She said as of Dec. 31, out of more than 2,500 cases, 1,400 were decided in favor of the complainant, 350 in favor of the respondent, and the rest are still pending.
Between the ICANN rules and federal laws, companies that believe someone is holding a related domain name in bad faith have some power behind them, making the Internet a little less like the Wild West and more like a recognizable place of business. As we see with Volkswagen and Deutsche Welle, this establishment of ground rules doesn't automatically favor corporate challengers or the challenged.
And the appeals court that ruled on the vw.net case noted that the law it used, the 1999 Anticybersquatting Consumer Protection Act, "was not enacted to give companies the right to fence off every possible combination of letters that bears any similarity to a protected mark." It added, "It was enacted to prevent the expropriation of protected marks in cyberspace and to abate the consumer confusion resulting therefrom."
I believe that the correct verdicts were given in both cases, though understandably the DiamondWare folks are upset at having had to spend money to defend what was theirs all along.
But let's end with a tangentially related note demonstrating that our German friends aren't humorless when it comes to the Internet and names. The German newspaper Frankfurter Rundschau recently reported on the German government's contest to name the online version of its national symbol, the eagle. The government is spending $810,000 to solicit names from citizens, with prizes ranging from a multimedia laptop computer to a trip to Berlin to a meeting with Chancellor Gerhard Schroeder. Writer Joerg Schindler quoted a state official who said, "We would like to prevent a split from developing between users and losers." Schindler added that would probably kill the idea of one of his colleagues to name the bird Wally the Vulture.
(Internet Whirl is a weekly column written by John Zipperer, associate managing editor of Internet World magazine. It appears every Wednesday. E-mail: email@example.com. )
Whirl: The Exodus to Come
(1/19/01) A bit of conventional wisdom making the rounds these days is that with the market drop, companies have become more savvy in dealing with employees, giving them reasons to love their work besides just hoping for a big payout. Like most conventional wisdom, this one is hooey and is difficult even to say with a straight face.
Over dinner one night recently, a friend told me about his company's woeful management style. Departments duplicate each other's work, which means the company was missing opportunities to save money. But the company doesn't seem to be paying much attention to itself at all, with staff members engaging in damaging turf wars. Partly as a result, specific initiatives to take advantage of its Internet position are being passed up. To make matters worse, lines of communication are crossed, and no one seems to be in charge. And this is one of the surviving dot-coms, not a casualty story from summer 2000.
So what is happening? Almost every day, the news headlines tell about layoffs and company closings. One local professional near the IW offices notes increasing vacancies around his office, with several businesses moving out of their space. All three were victims of the Net market downturn.
It should be a sobering time for companies, one in which they strive to hold on to their best and brightest. But many of them won't be able to do that, if my friend's example is even a bit representative. Here's why I think it is: We've all criticized the ways in which investors "forgot the fundamentals" and let the stock bubble go to their heads. But part of the engine of this weird economy of ours in recent years has been a new generation of business people, many of them starting out with their own businesses at remarkably young ages without having been informally "apprenticed" in traditional corporate culture.
This gave rise to a sense of superiority and hipness in these younger business types -- and if they can be thanked for making jeans and polo shirts acceptable office attire, then they can't be all bad -- but they naturally lacked some of the finer points of management. Hearing some of them give pronouncements about their launching programs for customer care or employee morale is like deja vu: Both concepts have been around for years, honed in the great laboratories of those boring old corporations that have managed to survive for decades.
But what about the companies like my friend's? How many of them are driving good, talented people from the Internet business world not by falling stock prices or bankruptcies or faded hipster glory, but by simple bad management?
My friend wasn't exactly mourning his company before its time, however. In fact, he's already filling his weekends and evening hours with freelance work, so when the time comes, and he makes the decision (or otherwise has the need) to leave the company, he'll easily be able to pick up enough work to survive, even thrive. But unlike those dot-comrades of yesteryear who flitted among Net companies, my friend's other work is with non-Internet companies.
It Must Be a Real Recession, Then
By John Zipperer
(1/10/01) In those consumer-education classes you had to take in high school, your teachers -- if they were any good -- taught you about the need to be skeptical about the news you read and the advertising you're shown. The question isn't always, Is this true? Sometimes it should be, Why are they telling me this now? And if you're reading a lot of articles about layoffs and Internet media businesses restructuring lately, there's a reason.
It's just like in 1991-92, when that recession hit media companies hard and news reports about layoffs and unemployment took on a new urgency -- at least in part because writers and editors had friends and co-workers who were among the victims.
Today, magazines and newspapers and Web sites that have reported -- sometimes with barely concealed amusement -- the layoffs at troubled companies, or even the downright mass unemployment by those dot-coms that went bust, are now forced to make those same layoff announcements themselves. There's less amusement now, with a string of recent major Internet media companies adding to the ranks of the unemployed. Expect to read a lot more about them.
In just the last two months, we've seen announcements of layoffs from Red Herring, the New York Times' online branch, the Industry Standard, Fox TV's parent News Corp., KnightRidder.com, and Salon.com. The main culprit is a significant drop in advertising. Not only have dot-coms -- the ones that have survived -- had to cut back on heavy advertising campaigns in light of less access to investor money, but through the magic of the multiplier effect -- your high school economics teacher taught you about that, right? -- all of those companies that do business with dot-coms have had to cut back as the dot-coms did.
Though none of the main Internet magazines has gone under, they have slowed expansion plans or canceled spinoff magazines, which, quite frankly, seemed to exist more as a place to stash overflow advertising pages than to respond to any reader need.
So if some of them have come back down to reality, then what do we make of this comment by John Battelle, chairman, CEO, and president of Standard Media International (parent of The Industry Standard)? "The Standard is evolving from start-up phase to established company, and we have realigned our organizational structure accordingly."
Yes, if "evolving from start-up phase to established company" means "laying people off because ads dried up." That may not be corporate-speak enough, but I think it'd actually be more reassuring to investors, who might appreciate the demonstration that the company's chiefs are dealing with reality.
Jon Richmond, president of News Digital Media (News Corp's digital subsidiary), was more direct in his comments about his parent company's plan to fold its online operations into its television broadcasting units. To News Corp., it's something that "will greatly reduce costs while ultimately providing ... greater integrated advertising opportunities for our sponsors."
Those aren't the kinds of words that fill one's heart with love or inspire great art, but they probably make News Corp. stockholders sleep more easily at night. (They also complement News Corp. chairman Rupert Murdoch's reported pessimism about the viability of online advertising.)
After all, it is a business decision, albeit one with real human costs.
Every Day Is Christmas for Amazon
(1/3/01) Online retailers worrying about survival in this frosty business climate might want to spend some time examining their interaction with customers. One recent online holiday shopping experience made me lose a lot of faith in a trusted company, and it reminded me of an old example of not coming clean with people.
In one episode of the 1970s TV series "Maude," a character describes a method of slowly breaking bad news. It seems a family is going away on vacation, and they ask their neighbors to look after their cat. The first day they're away, the cat dies, but the neighbors don't want to ruin their friends' vacation, so they decide to let them down easily.
When they call from Hawaii, the neighbors tell them that "the cat's on the roof, and we can't get it down." Oh dear, think the vacationers, but they're not too concerned. On the next day, when they call, they're told something like the cat's still stuck on the roof, and it appears to have caught a cold up there. Again, ooh, that's sad, but surely Fluffy will pull through. In the next call, they're told that the neighbors got the cat down, but it's sick, and they took it to the vet, and so on. Step by step, the neighbors concoct a story that builds up to the cat's death, and by the time they get to the death, the vacationing family has mentally adapted to the possibility that Fluffy may be in the great Litter Box in the Sky. They're let down easily, or so the "helpful" neighbors think.
That story came to my mind when I was receiving updates on my Amazon.com Christmas gift order. I ordered four videos of a popular Japanese anime series for a friend who is a fan of the program. On the Web site, all the videos were listed as being in stock and ready to ship within 24 hours or a few days. No problem, I thought, because I was ordering well in advance of Christmas, and the videos should arrive at my friend's house a week or so before the holiday.
I know, I'm gullible.
Several days after I placed my order, I received an e-mail from Amazon telling me that one of the videos could not be found, so the company needed my direction. (The kitty is crawling up the rain gutter.) I wasn't yet phased, because it was the last video in the series, and, hey, three videos are still a nice gift, right? So I logged into the site and canceled that video, figuring that would clear the way to prompt delivery of the remaining three.
Then, the week before Christmas, I received an e-mail from Amazon that began by telling me how important my order was to the company, but... I could hear the feline hissing, or maybe that was me. Anyway, Amazon said that it probably still could make pre-Christmas delivery, but there was a slight chance that it wouldn't be able to.
All of which left me with a white-knuckle week of worrying whether or not the gift would get there on time -- something that was particularly important in this case. As it turned out, Amazon delivered a happy ending -- on the last possible day. But I'm not grateful, and I don't think any customer should be under the circumstances.
First, though I'll continue to use Amazon -- for I've found it to be a wonderful way to find and buy books of all kinds -- I'll never again order something from it that has a time deadline on my end. That's bad, because it ruins part of what online shopping is supposed to accomplish: letting me benefit from Internet time.
Second, Amazon may want to rethink the way its site lists information. If the description says that the product is in stock and usually ships within 24 hours, any reasonable person would expect that (a) the product is in stock and (b) that it would ship within 24 hours. Whether the problem on the retailer's end was product-related (i.e., it wasn't really in stock) or company-related (not enough employees to stuff orders into UPS boxes), it could have saved me a lot of worry and kept me a happy customer if it had correctly listed the product information. I simply would have ordered another gift from Amazon. Instead, the company strung me along, giving me the message that I need to be fooled into buying from it.
(Internet Whirl is a weekly column written by John Zipperer, associate managing editor of Internet World magazine. It appears every Wednesday.)
The Most Underreported Stories of 2000
By John Zipperer
(12/22/00) Discovering the most underreported Internet business news stories of the year is a bit like trying to pick an underappreciated Net stock. So many options, so few of which aren't already overhyped. Therefore, this is an admittedly subjective list of the news stories that either did not receive as much attention as they deserved or suffered from off-base news reporting.
The real potential problems of the AOL-Time Warner merger. We've been inundated with complaints by large competitors to AOL and Time Warner about possible threats to competition. With a few exceptions, these complaints boil down to these competitors being upset that they didn't think of such a combination first. More ink should have been expended on the concentration of major news outlets -- in the hands of fewer organizations -- that have entertainment more at the center of their concern than news reporting. Luckily, we have seen an expansion of individual voices and even smaller news and opinion sites on the Web, but the CNNs and the Fox Newses and the CBSes still wield considerable power.
The money trail. First we had that spate of wildly successful IPOs and inflated stock options, then we had a big crash. Where did all the money go in those companies that are tanking now? At least some of those companies were pushing vaporware and pie-in-the-sky business plans, but there hasn't been enough reporting on exactly who the con men were and what they're up to these days.
Everyone's security risk. Many people panicked over the I Love You virus and then watched in either anger or amusement as a Philippine student sorta/kinda/didn't take responsibility for it. But they largely missed the underlying issue of our individual networked computers' vulnerability to being used in someone else's virus-spreading or spam-sending schemes.
Labor issues at e-businesses. The rumblings of customer service employees at Etown and Amazon.com are a belated sign that companies need to pay more attention to the satisfaction level of their lower-paid, frontline employees. This has become downright critical as a result of that part of the information revolution that has devolved decision making and even formerly technical activity to the bottom rungs of the corporate ladders.
The real status of mobile commerce. The truth is that mobile commerce is at its infancy; in fact, it may still be just a gleam in its parents' eyes. Much needs to be done in the area of payment mechanisms and in determining exactly what commercial services users will actually pay to use.
Online games. Though it's a topic that attracts the attention of the video-game set, online games haven't seen the general Internet media pay it the attention it deserves. For all of the talk about people wanting infinite channels of entertainment and news in their homes, there are only a few things they really want to use. Games for the kids -- and some adults -- fit that description and will probably have a big role to play in the success of attracting subscribers to various broadband schemes.
For you completists who want to know the whole score, here are the five most overreported Internet business stories of the past year: What Disney Thinks About the AOL-Time Warner Deal; Breaking Up Microsoft; Dot-Com Stocks Tank; Wireless Is the Next Big Thing; and The Promise of Broadband.
We'll hear a lot about all of the above in 2001, especially if journalists continue to be paid by the word.