To Market, To Market

A recent article in the New York Times reports on a growing backlash among both eBay buyers and sellers against the growing number of counterfeit items being sold through the giant trading platform. It's not surprising that buyers would be upset at this alleged proliferation of fake merchandise; but sellers too are upset, noting that fake merchandise works to push down prices for the legitimate versions of the same product in addition to making buyers more reluctant to order in the first place.

Since eBay can't possibly monitor the estimated 1.3 billion auctions that take place on its site annually, it's put in place some intricate seller rating programs and other mechanisms meant to have a self-policing effect. It offers a very limited insurance program, and will remove fake items from its site if it is alerted by trademark holders. But above all it protects itself by loudly reminding everyone that it is a marketplace and thus merely a service provider, basically freeing it of responsibility for any of the transactions on its site.

At the moment, eBay seems to have the law on its side. In a major case called Hendrickson v. eBay, decided in 2001, a federal court ruled that the Digital Millennium Copyright Act shields eBay from copyright claims, as long as eBay removes copyright-protected material upon notification from the copyright owner. In the true spirit of the Internet, a company called GenuOne has created an automated service to monitor eBay auctions on behalf of trademark owners, and automatically notify eBay of violations.

The law seemed pretty settled in favor of online marketplaces such as eBay until 2004, when Tiffany & Company filed a lawsuit against it with a novel set of claims, among them that eBay was abusing its trademarks and promoting and profiting from fraud. Interestingly, the majority of lawyers who have been interviewed about this case seem to think Tiffany's might just win. The ramifications for all online marketplaces could be enormous if they became exposed to potential liability for fraudulent sales on their sites. The case is set to go to trial this year.

But not all online marketplaces are created equal. What enables the sale of knock-off merchandise on eBay? First, there are vast numbers of buyers and sellers, affording a lot of anonymity. Second, the majority of buyers and sellers are individuals, making them hard to vet or credential prior to a sale transaction. Third, there are lots of branded, high-value items that can be profitably counterfeited. Fourth, the sheer volume of marketplace transactions makes any kind of serious policing impossible. These characteristics are almost exactly opposite those that define most business-to-business marketplaces. And this suggests to me that consumer marketplaces may ultimately offer a less sturdy model than industrial marketplaces.

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Access Intelligence Acquires Harriman Chemsult

The Chemical Business Media Division of Access Intelligence LLC has announced the acquisition of global pricing information service Harriman Chemsult Ltd.

Harriman Chemsult, a London-based global pricing information service for the chlor-alkali sector, will join the Chemical Business Media Division, which includes the industry-leading Chemical Week and Chemical Engineering portfolios comprising magazines, conferences, newsletters and Web products. Together with sister division SRI Consulting, the group constitutes the most respected news, analysis, information and consulting services organization in the chemical market today.

Headquartered in London, and with regional offices in the U.S., South East Asia, China and South America, Harriman Chemsult was founded in 1985 by Stephen Harriman. It operates four well-respected monthly services covering global market movements and prices. Chlor-Alkali Report, Vinyl Chloride Report, Bleaching Chemicals Report and Paper Chemicals Report each cover a different aspect of the chlor-alkali and related business.

In addition, the company issues periodic multi-client consulting reports on various aspects of the industry, organizes conferences on the paper chemicals industry and on the polyvinyl chloride (PVC) market, and undertakes private-client consulting for major chemical companies worldwide.

Commentary: This looks like a smart one for Access Intelligence, which is moving aggressively to add infocommerce content and capabilities to its growing portfolio of chemical information services.

Tagging, for Fun and Profit

There's quite a buzz now around so-called "tagging sites." The easiest way to describe tagging sites is that they are essentially a Web-based version of the favorites list on your Web browser. Users post their favorite Web sites and Web pages to these tagging sites, which then makes them generally available, or only to a group specified by the user.

In their original incarnation, tagging sites were more of a novelty and convenience than any great breakthrough. But they've been quietly evolving, adding more features and functionality, and as a result are becoming more popular and important as information discovery tools.

Sites such as kaboodle.com, reddit.com and shadows.com, all offer different flavors of the tagging experience, but the common elements are individuals selecting, classifying and sharing interesting Web destinations. In another twist, a Web site called wink.com has now created a search engine that indexes these tagging sites, attempting to improve upon Google's relevance rankings by limiting itself to these recommended pages and sites.While tagging seems to live largely in the world of consumers and hobbyists for now, it manifests larger trends that have implications for all of us.First, that tagging is flourishing is proof of a large and enduring need to organize the Web in order to extract maximum value from it. The Web is simply too vast for anyone to expect that, with a simple search engine query, they will get to the best information resources quickly and easily, if at all. Just as importantly, it's not always obvious that you've found an outstanding Web resource even if you do stumble across it, because the big searches are focused on relevance, which is a weak proxy for quality. Tagging is an attempt to overcome some of these limitations of the big search engines.

Second, while the models vary a bit, tagging isn't really about users classifying the Web content they find, it's much more about the new "3R's" -- ratings, ranking and recommendations. Tagging essentially layers a voting system on top of full text search to (hopefully) present even more precise and valuable search results.

Third, tagging reinforces the notion that true community, in the form of an information commons, is taking root on the Web. In this case, all the recommended Web pages are contributed to a common pool, and the community then works in a collaborative fashion to assess and rate these contributions.

Finally, the tagging craze offers more support for my contention that search is beginning to fragment. While current tagging sites for the most part suffer from trying to be overly inclusive, it is clear that tagging has the most power and value in vertical search-style applications, where a community of experts contributes to a pool of content that is then rated by other experts, assuring that the best available content is recognized and becomes readily accessible.

Warren Wins Again

I was initially a little puzzled by Warren Buffet's recent acquisition of BusinessWire . Far be it for me to question the investment prowess of the Oracle of Omaha, and I am certainly not down on BusinessWire (we awarded them a Model of Excellence award, they presented at InfoCommerce 2003, and we're also a long-time BusinessWire customer), but BusinessWire is in one tough market. Warren Buffet has other information industry investments (Moody's and the Washington Post Company), but Business Wire doesn't seem to me to have the market oligopoly characteristics of these other two investments.

True, BusinessWire has built a strong and respected brand. Its service works fast and well. Its customer support is outstanding. It's been rolling out an endless stream of innovative new capabilities and features. There's unquestionably a valuable business here.

However, as a newsletter publisher and industry research firm, we're in the interesting position of both generating and receiving electronic press releases. And with over 100 press releases flooding our inboxes daily, you start to notice things, key among them: there are at least a dozen press release distribution firms. Leaving aside its large direct competitor, PR Newswire, most of these other competitive firms are tiny, but that's just my point: they are getting their press releases to me. Just as importantly, none charge anywhere near as much as BusinessWire (some are even free), and this is always on my mind as I write those $200 checks to BusinessWire for each press release we distribute.

What's changed is that the business of press release distribution has gone from being a push business to being a pull business. Prior to the Internet, BusinessWire needed to know where, how and to whom to direct press releases, a huge job that created real value and high barriers to entry. Now, the business has flipped entirely, with journalists and others actively searching for news on the Web, and it's not hard to find. We cast a wide net with keyword blog searches, Google news alerts, even spidering Web sites of major data publishers for new press releases, but we're hardly pushing the envelope, and we've got all the press release flow we can handle.

BusinessWire has been working ceaselessly to maintain its edge and perfect its online distribution, but with competitors offering "good enough" levels of distribution for close to nothing, this is a tough business that's only going to get tougher.

So has the great Oracle been overcome by vapors on this investment? Perhaps not. There will always be companies whose news is so significant (at least to them) that they will not want to skimp on getting the best distribution. And to increase their value, the big firms have glommed on to analytics that purport to quantify the ROI of PR buzz.

Also, in reviewing all these press releases, it seems to me there could be an interesting quality play on the receiving end. With press releases so easy and cheap to create, everyone's doing them, creating a whole lot of "fact inflation" in the process. It's hard to tell who is real and who is dreaming, and it's near impossible sometimes to separate fact from fiction. A great differentiator for BusinessWire might be some sort of credentialing function. How about a partnership with D&B to link press releases to company credit ratings and backgrounders? How about a deal with ZoomInfo to provide quick background on company principals? There are lots of easy, risk-free ways BusinessWire could vouch for its customers, moving them into a trusted and preferred status.

Once you start thinking this way, it becomes clear that while this battlefield may be a tough one, the underlying need is not going away, and product differentiation is still very much possible. The battle is becoming a creative battle, and winning depends on deploying the right combination of value added content and tools.

There's clearly no shortage of creativity at BusinessWire, and there's clearly no shortage of capital at Berkshire Hathaway, and in combination it does look increasingly like Warren will win again ... again.

Reed Business Acquires Spec Check

A nice rich data move by Reed:

Reed Business Information and Construction Equipment magazine have announced that RBI has acquired Spec Check U.S. LLC, the leading data provider of construction and agricultural equipment specification comparisons. The Spec Check database includes more than 90 categories of mobile construction and agricultural machinery.

Spec Check will continue to serve construction equipment manufacturers, distributors and end-users. The Spec Check data will also be the future source for the specification database on http://www.constructionequipment.com/. The database will interact seamlessly with the newly relaunched site's product, manufacturer, distributor databases, as well as its award-winning evaluative content.