Widgets and Online Portals

By Eric Alterman
Published February 29, 2008

iMedia Connection

Widget providers increasingly are bypassing portals and distributing
content directly to user-controlled pages, requiring portals to evolve.
KickApps’ founder explains.

The universe of websites has a very long tail, and soon it will be
clear that earning real estate on those websites will be the primary
mission of every major portal. Widgets will play an ever-increasing
role in this evolution.

Prediction: Portals like AOL, MSN and Yahoo will eventually generate
more impressions and ad inventory by exporting widgets to third-party
websites than by serving retail traffic within their own domains.

Most people are still trying to figure out what widgets really are
and their importance, but few are looking at the role traditional
internet portals will play in this new ecosystem. The major content
portals like AOL and Yahoo used to define “distribution” when it came
to web content (as both creators and acquirers of original content).
Then widgets came along and increasingly “distributed” that
distribution power to individuals and their personal pages (e.g. social
networking pages, blogs).

The problem for traditional portals is that content producers and
third-party widget providers increasingly have convenient ways to
bypass portals by distributing content and other user experiences
directly to consumer-controlled pages. While the major portals often
own social network traffic (e.g. AIM Pages) and feed aggregators (e.g.
MyYahoo), that traffic increasingly is splintered by third-party
content and widget providers. In short, the entire web community is
aggressively fishing in portal waters, and there are good reasons to
expect that trend to accelerate.

The first step in recognizing that future growth lies beyond their
portal walls was expressed through a series of multi-billion dollar
acquisitions of various advertising platforms: AOL buys Tacoda, Yahoo
buys RightMedia, Google buys Doubleclick, Microsoft acquires aQuantive,
etc, etc, etc. But how will these ad networks compete for inventory
across the ever-expanding universe of independent websites?

CPM guarantees and ad intelligence are ultimately limited product
differentiators because hyper-competition can only mean commoditization
and profit erosion, and mega agencies like WPP are also entering the
advertising network game with their own acquisitions (e.g. 24/7 Real
Media). What’s a traditional portal to do?

There are several possibilities, but I believe the winning strategy
for traditional portals is to extend the reach of their advertising
platforms by offering independent web publishers something portals have
produced very well for years within their own domains: compelling
content and highly interactive user experiences. To do this, portals
must package and deliver these experiences in a highly viral,
self-serve fashion. That means widgets.

Portals can evolve into hubs that serve an essential purpose in the
evolving widget ecosystem, connecting the creators of content and
interactive user experiences with the universe of independent websites.
So in addition to inviting third-party content widgets into their own
environments, portals that wish to thrive must also become major
exporters of content and interactive user experiences. “Open-Portal” or
maybe even “Anti-Portal” may be the best way to describe this new beast.

But will marketers, web publishers and content creators willingly
submit to portal hegemony once again? The answer is yes, I believe, so
long as portals deliver what these players really need. Creating richer
media experiences and more audience interaction requires increasingly
complex technology. So the kind of portal widget platform I’m talking
about must include functions such as easy media management, profile
management and administration; consumer experiences now require more
technology than most publishers and content creators can reasonably

Portal platforms must also distribute widgets that click to deeper
user experiences (e.g. “Deep Widgets”) on landing pages that engage
users with both editorial and user-generated content. In that sense,
widgets distributed by portals become windows into richer, more
engaging user experiences that generate incremental ad inventory,
monetized by both portals and their website affiliates. These landing
pages must maintain the branding of independent websites with the help
of APIs, CSS and customizable templates, and must similarly enable
member and profile integration with the existing user base.

The idea of internet portals morphing into “wholesalers” of
programming to many thousands of “affiliates” should not be surprising.
Wholesale distribution is the driver of nearly every major industry
(from manufacturing to major media). The television and film industries
have worked that way for decades. NBC earns the right to sell
advertising across thousands of independent television stations by
providing those stations programming that is often aggregated from many
sources. Similarly, internet portals must earn the right to place
advertising across the entire internet by leveraging a sophisticated
platform to distribute both content and interactive programming.

While portals like Yahoo may capture dominant market share
relative to other websites, their audience growth is modest relative to
the aggregate audience of large and small websites across the internet.
The universe of websites has a very long tail, and soon it will be
clear that earning real estate on those websites will be the primary
mission of every major portal. Widgets will play an ever-increasing
role in this evolution, and marketers, for one, are beginning to take

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