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Online Business And The Joy of Tight Verticals

I had the opportunity on Thursday 22 Nov 2007 to attend an informal breakfast seminar conducted in Sydney Australia by the Innovation bay team. The guest speaker was Alison Deans from Netus. Alison was very well spoken and is certainly regarded as a subject matter expect on the topic of online businesses. Alison's talk was very entertaining, informative and a real pleasure to attend.

I have captured below some points of interest that I took away from the seminar. The points below are a mixture of grabs from Alison's talk, questions from the audience and discussions with other people attending the seminar.

  • Online advertisers love tight verticals
    • Vertical in this case meaning the vertical columns of text on a web page.
    • Examples of the use of tight verticals that were giving was the collection of blog sites controlled by the Allure Media company of which Netus has invested into.
    • Picking the Lifehacker blog which is one of the 4 blogs maintained by Allure, as an example. The text is left aligned on the page and all contained in a tight vertical. Well orientated advertising is then placed both on the left side and then also in the middle of the vertical text. The placement of such advertising is common place and is perhaps regarded therefore as the best solution for grabbing a viewers attention.      
  • Social Networking = unknown content = brand risk to advertisers
    • Social networking sites are very popular and are therefore generating a lot of traffic. However advertisers are largely uncertain about buying ad space and therefore risking the reputation of their brand by having it placed beside potentially illegal, rude, or even raciest content. 
    • A point to this issue is that the content on the Allure blog sites is described as "… localises licensed content from the world leading blog networks". Therefore I imagine that the content comes with some type of guarantee, specification, or service level agreement or similar so as to comfort advertisers.
      • Lifehacker has a comment review process that is conducted before a comment it is published. The review process is described on their web site as "…looking for comments that are interesting, substantial and/or highly amusing. ….Your comment will only appear if it is approved". Again protecting the content that will sit beside advertisers brands.       
  • Social Networking akin to Bar mentality
    • Bar in this context means drinking bar, pub, nightclub etc.
    • As humans we generally like to gather in groups. Examples of such are new bars, which when they first open a crowd will gather, investigate and have a drink. As there is a crowd more people will come and the crowd will get larger for no other reason than there was a crowd to start with. I think the important observation here is it is not the bar itself that has drawn the crowd but the newness of the bar.  
  • Online retailing Australia's next Internet wave
    • After hearing this comment I then become aware of television advertisements for Deals Direct and bus advertising for Lasoo, both of which are new Australian based online retailing business.  
  • User experience in relation to advertising budget
    • If your advertising budget is low, you must focus more on the quality of the user experience.
    • In the early days Ebay Australia, started with an advertising budget much lower than their competitors. Therefore the user experience became very important as the catalyst for customers talking to other customers and therefore generating more leads.  
  • Buyer and seller dynamics that lead to impenetrable market position
    • Ebay attracts buyers because there are sellers and sellers are attracted because there are buyers. The buyers and sellers form a market. The rate of attraction of buyers and sellers grows at an increasing rate. The growing size of the market therefore makes the market as a whole more protected everyday from other businesses attempting to setup up their own markets.  
    • This type of protection does not require lawyers or large adverting budgets. 
  • Preferred Founders are Subject Matter Experts (SME)


Netus are a technology investment company, with an aim as stated on their web site of "…bringing…proven business models, based locally or overseas, to the Australian market".

Innovation Bay is described on their web site as "a not-for-profit group of entrepreneurs and business leaders who come together to discuss issues and share experiences within a casual, open and informal environment".

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