Black Dotcom Shake-up

Many Internet start-ups that gambled on a big payoff are now rolling snake-eyes

sites are just not leveraging that and marketing to the [black] middle class.”

Ellington agrees. From the beginning, NetNoir has focused on attracting affluent African Americans in the 25- to 54-year-old segment. “[NetNoir] targets black people who are educated, have money, and own homes,” says Ellington. “We were not trying to be a hip, cool urban crossover site. If you can build an Internet business model for the 14- to 25-year-old group, I applaud you, but that is not our focus.” Currently, AOL holds a 15% share and Radio One owns “slightly less,” says Ellington.

Counters Forrester’s Walsh, the focus on a target demographics is one reason many of these sites will not survive. “Income, education, age, similar interests and background play a greater role in determining a site’s success than race or ethnicity,” she says. “The assumption is that people who share the same ethnic background and race share the same interests, but you can’t do that. It’s arrogant and ignorant.”

Meanwhile, Wasow believes conversation is king. More than 95% of BlackPlanet’s traffic is generated by members who interact with one another, says Wasow. The site’s revenues come from “banner ads, sponsorships, and a variety of campaigns.” Unlike other sites in cyberspace, he maintains, BlackPlanet.com has lower operating costs because it’s not focused on building expensive content. Because the high-bandwidth content of entertainment-oriented sites is costly to produce, they have been forced to find a corporate partner with deep pockets or shut down. “It takes a lot of technology to run these sites, so it’s very expensive to build all the technology for just one site. They’re also finding that a lot of the high-end stuff just doesn’t work for many people who have slow dial-up connections.”

But Cooper says relative to television or motion pictures, UBO.net’s content is “a fraction of the cost. Animated content is about one-tenth the cost of an offline piece,” he says. But the reality is that compared with, say, BlackPlanet.com, which is community-based, entertainment sites like UBO.net and Hookt.com are producing expensive content.

THE POWER OF BRANDING
The consensus seems to be that lack of business savvy and insight into the online audience have prevented these companies from making money. But Cooper disagrees: “The major challenge right now is to preserve cash and grow at the same time. Until April, most of these companies were focused on building traffic without generating revenue.” Additionally, he counters, UBO.net has “multiple sources” of revenue. “We develop content for distribution television, satellite, and wireless” he adds. “We have an extensive strategic research department devoted to understanding the urban market.”

But will that translate into profits? And how will these sites fare against branded sites operated by such mainstay media companies as BET, Johnson Publishing Co. (which owns Ebony and Jet), Essence Communications Inc., and Earl G. Graves Ltd., which publishes black enterprise. These companies own household franchises that have already established niches and customer bases.

Cooper doesn’t buy that argument, though. “In the short history of the Net, that hasn’t necessarily proven true,” says

Pages: 1 2 3 4 5
ACROSS THE WEB