Virtual reality: Leading a niche

By AMIR ORNI
February 8, 2007 15:11

EBay is the leading online commerce web site. Can anyone tell me which site is #2, because I have no idea.

3 minute read.



Virtual reality: Leading a niche

business race 88. (photo credit: )

The nature of the multi-faceted World Wide Web provides fertile ground for plenty of creativity and innovativeness, which, in turn, lead to entrepreneurship, start-up companies and quite a few trends. Despite all the changes the web brought with it, there is a least one aspect that has remained the same: the way we, the consumers, think and behave. Just like in the "real world", the forces at work online have to do with the power of a brand, supply and demand etc. When we use the Internet, we do so in order to consume something - whether a product or a service - by using the huge variety of sites that answer our needs and satisfy our wishes. Like in the real world, eventually, we choose a certain site in which we use or buy whatever it is that we seek. Just as people enter a supermarket to buy Coca Cola, they enter JPost.com, for example, to get news from Israel. If we are hungry, we usually choose the first food establishment we come across. The same applies online: we tend to consume information from the first site we find that responds to our needs. Still, it appears that the main differences between the real world and the online world are the massive supply and the accessibility. There are millions of web sites out there, all a touch of a keyboard away. It is not uncommon that hundreds of thousands of sites compete over the same target audience. It's relatively easy to set up a web site, and it is definitely cheaper to build a basic textual site than a neighborhood coffee shop. So how and why do we choose some sites over others? The power of a brand (the difference between a product and a brand is like the difference between a simple sponge to Sponge-Bob)is comprised of many elements, such as exclusivity, technological gaps, etc. From a business standpoint, the way to distinguish one site from the rest is to be a leader in a niche. If one site is not the leader of a niche, its operators should contemplate creating another niche or a new sub-niche. Let's take, for example, the car industry. The word "cars" produces 443,000,000 results in Google. Any new web site on cars would have a very tough time making it, to say the least. However, if it chooses to launch a site on "Special 4x4Tires for Japanese SUVs", it would have a much better chance and significantly fewer competitors. True, the number of potential clients would also drop, but their quality would dramatically increase. For advertisers, it also means that the potential clients are highly valuable, even if their numbers are lower. EBay is the leading online commerce web site. Can anyone tell me which site is #2? Well, I'm going to need your help on this one, because I don't know. PayPal, Skype, Myspace are all websites that were leading in their niche when they were bought by Internet giants for hundreds of millions of dollars, leaving their competitors way behind. The fact they were a leader in their niche was one of the main reasons they had (and still have) a nine-digit price tag. Take Youtube, for example: In my previous column, I talked about the video sharing website that was acquired by Google for $1.65 billion. Well, did you know that Metacafe, also a large and very impressive video sharing website was established two years before Youtube? So why didn't Google buy Metacafe? The answer is that despite much praise and even significant traffic, it lost the leading niche spot to Youtube. So, back to the "old world" rule: If you're not in first place, you are nowhere at all... However, it's always important to keep trying even if it means changing your primary strategy while utilizing the advantages your competitors don't have.


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