The faith of Networking
sites like PlanetAll
Introduction
PlanetAll was founded in 1996 by Warren Adams and Brian Robertson with the vision of
bringing people together face to face using the web. PlanetAll's webpages were launched
on November 12, 1996.
PlanetAll started out as a contact management sevice site where people could register
and keep track of time, friends, colleagues, jobs and even themselves. Pretty nicelly
summed up in one of their slogans; “Never loose touch with the things that matter most to
you”.
PlanetAll based it's service on the following features:
Address Book:
PlanetAll's address book aimed to automatically update when your contacts
changed their job, email, phone numbers or address' and instantly notify you of
the changes. It would even notify your contacts if you were to do any of the
same changes.
Affinity Groups:
PlanetAll allowed you to create groups of contacts and send messages to
everyone in thos groups, notify you whenever members of your groups joined
the system and even receive common information like alumni news and class
notes.
Crossing Paths:
PlanetAll would automatically notify you when your contacts were coming to
town or when your travel plans overlapped with your friends' plans.
Reminders:
If you or your friends had registered a birthday or important meeting, you
would all be reminded a couple of days in advance.
News:
Receive information like news, horoscopes, jokes and factoids of your
selection with the click of a button.
Calender:
Members could register their own travel plans, birthdays, appointments and
reminders. PlanetAll would use this information to notify you and your friends
in advance of an upcomming event.
With all this information registered by all it's members, PlanetAll could also offer a feature
called “Friends of Friends” which aimed to help members job search and “network” in
particular groups, companies and cities.
Lo205 E-Business, spring 2003
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Author Ole Øyvind Hove
PlanetAll's key success factors prior to its purchase by Amazon.com
When offering a service that basicly gives you information about other registered
members, the only way to make the service better is to get more people to register. In
other words, you need members fast, and lots of them! The founders of PlanetAll knew this
and they therefor started to quickly build a comprehensive database of members to give
the PlanetAll consept the “fuel” that made it a powerful networking solution.
The timing was also important, being one of the first companies that focused 100%
percent on online networking, PlanetAll got a great advantage. During the first one and a
half months after they got online, PlanetAll managed to be elected as iWorld's Site of the
Day (16. Nov. '96), Yahoo!'s Pick of the Week(25. Nov. '96), appear on First TV online
television show on newyearseve and win the 1996 New Business of the Year Award at the
Excellence on Business Awards Banquet. After four months of business, PlanetAll's
economical situation showed a debt of $200,000, but after a reassessment of the
company, they decided to stick to it and raised money to putt themselves out of debt within
three months. With all the positive publicity and a healthier economy, all within half a year
after they started surely must have been tempting to anyone looking for companies in the
“new economy” in which they could invest.
During the nineties, many more people began to work with information technology on a
daily basis and used the internet for gathering information. They saw that PlanetAll could
meet their demand for an easy way to keep track of contacts, friends, jobs and
appointments. As times were changing fast and the world economy grew faster than ever,
people could change jobs and addresses overnight.
PlanetAll, having one of the most comprehensive solution at that time, got lots of attention
and the founders of the company did their homework well and gave the public the features
and feedback that made PlanetAll such a popular site.
I would summarize PlanetAlls key success factors with these few pointers:
1. They were at the right place at the right time.
The market was new and growing fast, and when they started, it lacked a
good solution to easily keep track of friends, contacts and appointments.
PlanetAll provided an online 24-7 automated solution to meet this demand.
2. They knew their objectives, and followed them through.
They knew what it took to make PlanetAll a success, -they needed a stable
service, with many members. So instead of charging the members, they
made it free of charge. This, in the end, gave PlanetAll an impressive 1.5
million members.
3. They focused on their online service and image.
They managed to stay focused on the one thing they could do, and made
the features of their site well-known and reputated. They avoided trying out
things that might backfire and give them bad publicity.
4. Good public relationship.
They started at the right time, with the right solution, they did the right thing
and said the right words. This gave venture capital and investment
communities confidence in PlanetAll's consept and investors therefore gave
them economical support. More than $10.3 million had been invested in the
company before Amazon.com bought PlanetAll for more than $100 million in
august 1998.
Lo205 E-Business, spring 2003
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Author Ole Øyvind Hove
Are networking sites viable as stand-alone companies?
Networking sites have the caracteristics that the more people that register, the better the
networking site becomes. But in order to get that many people registered, the service have
to be free of charge. And that leaves company earnings to advertising, targeted ads based
on members' interests and affiliate programs. When PlanetAll started, the marked was still
young and no proper networking solution met the demands of the public. The time was
therefore perfect when PlanetAll started it's business in 1996 and met the public demand
of a 24-7 automated contacts manager.
Today, it's different story. There's a jungle of different networking sites which tries to grab
a piece of the marked. Making it almost impossible for a single company to stand out from
the crowd and achieve the same position as PlanetAll achieved being the first proper 24-7
automated contacts management solution provider. I Therefore believe that the time when
networking sites were viable as stand-alone companies are over.
Today, the demand for these kind of services are covered by companies' intranet and
instant messaging(IM) solutions like AOL Instant Messenger(AIM), Mirabilis' ICQ and
Microsofts' MSN Messenger. These instant messaging soultions also provides a wast
number of different plugins, and direct peer-to-peer communication, making networking a
more personal event. The goal is no longer to make people meet in person, but to expand
their network and communicate live with IM through the internet. Mirabilis, who was the
first to successfully meet the demand of intercommunication between internet users with
their ICQ, reached 200 million download milestone on CNET Networks' Download.com on
June 6, 2001. Today it's estimated that about 90,000 new users join ICQ every day, and
they currently have over 150 million registered users worldwide, from more than 243
countries.
Such high numbers of registered users gives the owners of such companies an enormous
economical opportunity in selling targeted ads based on it's members' interests. The real
value actually beeing the wast number of registered users, the community. At the moment
there are three main competitors, ICQ, MSN and AIM. Two of these being owned by AOL
Time Warner(ICQ and AIM).
Based on the above, I therefore believe that the time when networking sites were viable as
stand-alone companies are over. Simply because there's no “glue” to keep members
participating when they can't intercommunicate, discuss and share opinions. Current
networking solutions are therefore usually integrated as a part of a virtual community. This
keeps the members interested in being a part of the community and networking solution.
These virtual communities with integrated networking capabilities are and will be provided
as a part of internet sites, intranets and/or instant messaging solutions. I believe that in the
near future, we will see more virtual communities with instant messaging solutions
integrated with intranets, mobilephones, handhelds and other roaming wireless solutions.
Peope will always be available and online without having to sit infront of their computers all
day. This will presumably give the original PlanetAll idea of getting people to meet in
person a new boost.
Lo205 E-Business, spring 2003
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Author Ole Øyvind Hove
PlanetAll – A virtual community or a community enabler?
“A virtual community is a community of people sharing common interests, ideas, and
feelings over the Internet or other collaborative networks. A possible inventor of this term
and one of its first proponents was Howard Rheingold, who created one of the first major
Internet communities, called "The Well." In his book, The Virtual Community, Rheingold
defines virtual communities as social aggregations that emerge from the Internet when
enough people carry on public discussions long enough and with sufficient human feeling
to form webs of personal relationships in cyberspace.” (whatis.techtarget.com)
Also defined as a “global village” in cyberspace by the author Marshall McLuhan.
PlanetAll's website consisted of an automated calender, a reminder and an address book,
and gave members the possibility to search for friends or colleagues and to stay in touch.
But PlanetAll didn't give it's members a common interest, to discuss or exchange ideas
about.I would say that PlanetAll wasn't a virtual community when Amazon.com bought it,
since there was no sharing of common interests, ideas or feelings. When Amazon.com
bought PlanetAll they already had a huge online bookstore, but there was no virtual
community based on it's customers. Buying PlanetAll, on the other hand, enabled
Amazon.com to create a virtual community called “Friends & Favourites” based on it's
online bookstore. The members' opinions and recommendations of books and films, sold
by Amazon.com, are now shared and discussed online as a common interest along with
Ideas and feelings about the different books and films. Members can search for registered
friends and get their recommendations or wishlists which contains books and films
selected by each member. In addittion, members get related news-mails with special offers
and favourable pricing.
In short terms; Amazon.com bought PlanetAll as a community enabler in order to create a
virtual community based on common interests for books and films. Like the theater
community archetype.
Lo205 E-Business, spring 2003
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Author Ole Øyvind Hove
After Amazon.com purchased PlanetAll, what were the resulting value
drivers for each company?
Amazon.com, having created a virtual community with the help from PlanetAll, could now
easily take advantage of their new customer-database which resulted in better targeted
and associated advertising. The virtual community also gave the customers a degree of
trust and community that previously was unavailable for online stores. This effectivly built
faithful followers for Amazon.com. In addition to the purchase of PlanetAll, Amazon.com
also bought other companies that increased their market shares and expanded onto the
European market. By 1999, Amazon.com's market capitalization equaled the combined
values of profitable bricks-and-mortar rivals Barnes & Noble and Borders Group, even
though their combined sales were far greater than the upstart's. Amazon.com was
becoming an attractive community which offered it's members choise, trust and stability.
Amazon.com did this by allowing it's customers to compare different products, and suggest
different books or films associated with the items previously bougth by fellow customers
with the same interests. They helped the customers with decision support through access
to reviews and recommendations by fellow customers. They offered a scalable website
which could handle huge peeks in traffic with stability and provide a wast number of
products with favourable prices. Market trends analysis made them able to give the right
offer to the right person at the right time, “live”.
In short terms: Decision support, immediate response, targeted market campaigns and a
stickiness for repeating traffic and purchases.
Despite this, later spree and sporadic purchases of not so successful websites and
communities in combination with the .com-fall and global decline in world economy forced
the Amazon.com share price back to the start-price and below with an all-time low autum
2001. During the last one and a half years, the stock price has slowly regained itself and is
currently about $25 dollars.
PlanetAll took great advantage in the wast number of people visiting Amazon.com,
potentially introducing millions more to discover the value and convenience of PlanetAll's
services. "It means that our growth will only accelerate even faster, which for customers is
really good because that means there will be more people in the system they can stay in
touch with," Warren Adams, PlanetAll cofounder and president, "It really just means a lot
more resources to move us as quickly as we can.” In addition to this, the
recommendations and wishlists added to PlanetAll's integrated part of Amazon.com gave
the users a virtual community which they could identify with and share information, ideas
and feelings with.
In short terms: Scalability, human intercommunication, decision support, scalability, secure
and private and a common interest making it a virtual community with more active
membres(stickiness).
Lo205 E-Business, spring 2003
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Author Ole Øyvind Hove
Did PlanetAll identify a potentially profitable market segment as part of
Amazon.com?
I think yes, because PlanetAll enabled Amazon.com to create a virtual community based
on the common interests for books and films. This gives Amazon.com an advantage of
additional information for analyzing customer-product relationships and it enables them to
pick up on trends faster, thus enabling them to meet demands not previously know. Since
members now share their opinions and recommendations, they infact also act as targeted
ads towards selling the recommended books and films to the other members. Customers
who are hesitating to buy books or films online, may be persuaded by recommendations
because they are written by fellow customers, which they can identify with, giving them a
feeling of presonal trust and community. Customers automatically trust a fellow customer
more than the salesman, thus giving Amazon.com new customers from the sceptical
segment of the market. In addition, PlanetAll can i.e. Remind their members of their
mothres' birthday and simultaneously recommend books or CD's as gifts. It also “steals”
customers from Amazon.com's competitors which don't have a virtual community based on
interest for the companies' products. "Online shoppers are extremely habitual," says Genni
Combes, an analyst with Hambrecht & Quist. "If a site can integrate the functions of a
user's day-to-day life, it's a much more compelling place to return to."
References
The WayBackMachine (http://Web.archive.org)
YAHOO! FINANCE (http://finance.yahoo.com)
HOOVER'S Online – The Business Information Authority
(http://www.hoovers.com/co/capsule/3/0,2163,51493,00.html)
Whatis?com
(http://whatis.techtarget.com/definition/0,,sid9_gci213295,00.html)
The Red Herring (http://www.redherring.com/mag/issue60/wild.html)
Boston Business Journal (http://albany.bizjournals.com/boston/)
The Business Review
(http://columbus.bizjournals.com/albany/stories/2002/08/12/focus2.html)
“Virtual Politics Identity and Community in Cyberspace” by David Holmes
“Introduction to e-commerce” by Rayport and Jaworski, McGraw-Hill
“Electronic Commerce - A Managerial Perspective” by
Turban,Lee,King,Chung
http://www.cmgi.com/news/prdata/CMG_Ventures_II_Announces_Sale_of_
PlanetAll_to_Amazoncom_ANDOVER_MA_August_4_199.shtm
Lo205 E-Business, spring 2003
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Author Ole Øyvind Hove
Appendix:
Snapshot 1: PlanetAll's website before it was purchased by Amazon.com
Snapshot 2: PlanetAll's website after it was purchased by Amazon.com
Lo205 E-Business, spring 2003
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Author Ole Øyvind Hove