Originally published on January 31, 2001 and brought to you today as a time capsule.
E-commerce is being beaten up with bad press again. First it wasbabies being sold over the Net, then brokerages being warned for their questionableonline business practices.
Throw in the latest round of dot-com layoffs and the currentassault on Net advertising, and the e-business is undergoing a genuine public relationsnightmare.
But is the recent bad rap justified? Or is e-commerce simply an easy targetduring uncertain economic times? The answer may lie somewhere in between.
The online advertising market has certainly taken its share of criticismlately, especially as an excuse by dot-com executives for the ongoingdot-com shakeout.
Take the comments by NBCi chief executive officer Will Lansing, who said the changes leading up to his company’s recent layoffs were made to account for the”challenges within the online advertising market.”
Or consider the comments offered up by AltaVista’s executive adviser Peter Mills on letting200 employees go a few weeks ago: “AltaVista has not been immune to thesoftness in advertising,” Mills said.
But is it the advertising market that’s the problem, or the dot-com relianceon ads for revenue?
Plans Gone Awry
Michele Pelino, director of Internet Market Strategies for the Yankee Group, told the E-CommerceTimes that part of the motivation behind the assault on online advertising is the industry’soutdated belief that Internet clickthroughs equal effectiveness.
“[Online advertising] is certainly easy to pick on right now – but thebigger picture is the inherent problems in the business models of the onlinecompanies,” Pelino said.
As is the case in all business models, advertising is only one of thechannels online businesses need to use effectively to reach customers,Pelino said.
The criticism of online advertising “is an outward indication that we’renot seeing the responses that had been promised for certain onlineactivities, advertising being just one of them,” Pelino said.
Don’t Kill the Messenger
Two other recent news items have led to ongoing media criticism of theInternet. The first came in the form of a custody battle over two Americantwins adopted over the Internet by a British couple.
The British couple paid UK800 to a Net-based firm to adopt the twin girls from their American mother. The couple was unaware,however, that the twins’ mother had already sold the twins to an Americancouple. After visiting the girls at the American home, the birthmothersecretly took the girls and resold them.
Story number two: in a new report released last week, the U.S. Securitiesand Exchange Commission (SEC) warned Internet brokerage firms to improvetheir overall business practices, including online trading technology andadvertising, to ensure that consumers are adequately protected and informed.
In both cases, the Internet came under heavy scrutiny for what much of themedia saw as gross injustices of a medium in need of some policing. However, the Net criticism these stories have drawn may actually have a lot in common with that of the dot-comlayoffs.
“All of the key issues you have to deal with in a traditional business, youare accountable for and need to address online,” Pelino said in regards toe-commerce.
The same holds true for online adoption agencies and brokers. After all, one could again ask, is itthe Internet medium that deserves blame for the shady actions of some brokers and adoption agencies, or the operating practices of those companies themselves?