Free Internet: Get What You Pay For?
By Keith Regan
E-Commerce Times
August 28, 2002
Many free services have fallen by the wayside because the
companies running them could not adapt their business models quickly enough
to the changing economic environment.
If it is true that you get what you pay for, is free Internet access really
worth nothing?
Companies often say that their free Internet access, Web hosting or e-mail
services are designed as entry-level offerings that allow reluctant Web
consumers to dip their toes into the online pool before taking a
full-fledged plunge. But while most of the once-free Web has been fenced off
by fee-collecting toll booths, it is still possible to find a free gateway
here and there.
For example, most free dial-up packages -- such as those offered by Juno and
NetZero -- typically offer about 10 hours of free
online time per month, just enough for most users to keep up with e-mail and
do a bit of surfing.
"For that person who's never been online, it might be a good place to
start," Forrester Research (Nasdaq: FORR) analyst Charlene Li told the
E-Commerce Times. "But once a Web user gets some experience, they
immediately demand more."
Audience Attrition
By most estimates, the number of people who fall into the "just starting
out" category -- at least in the United States -- is shrinking rapidly.
According to Nielsen//NetRatings (Nasdaq: NTRT), more than two-thirds of
U.S. households are already connected to the Web.
And an even higher percentage of Americans have Internet access at work or
school.
Because the general population is becoming more familiar with the Internet
-- and demanding higher levels of Internet service
-- for-free models have had to shift their focus, particularly in light of
attractive access technologies like broadband .
"The move to broadband and more expanded services is inevitable, though it's
taking longer than everyone expected it would,"
NetRatings director and senior analyst Lisa Strand said. "People will still
get by with the basics, but over time, broadband
will dominate."
Most online services use free offerings as a way to get customers in the
door, after which the companies typically try to sell upgrades to their
customers. Address.com, which offers free Web-based e-mail accounts -- much
like Yahoo!(Nasdaq: YHOO) and Hotmail -- gives users the option to upgrade
to a traditional POP3 e-mail account for 66 cents
per month.
No Such Thing
While at one time it was relatively easy to find and sign up for free
services online, it is becoming increasingly difficult to locate free
offerings that provide anything more than the basics.
As an example, free Web-based e-mail accounts typically come with only a
minimum amount of storage space.
Users must upgrade their accounts to get additional space or to access their
accounts via a standard POP3 connection.
Even free accounts that offer only basic services are not necessarily free;
they often come at the expense of personal
information . Most free accounts require users to fill out lengthy personal
profiles. And some accounts, such as those
provided by Address.com, require that users take part each month in offers
from advertisers that require answering survey questions or providing more
personal data .
Privacy Farm
Many free services have fallen by the wayside because the companies running
them were not able to adapt their business models quickly enough to the
changing economic environment.
For example, LookSmart this week announced plans to shut down its free
BeSeen service, which helped Web designers get
their pages listed in search engines' databases.
But according to analysts, free services will continue well into the future.
Even those that offer basic, no-frills capabilities will continue to draw
users, albeit in smaller quantities. And as concern over privacy grows,
analysts say consumers will opt to pay for more robust services to avoid
sacrificing all of their privacy.
"People are willing to pay for value and even to avoid giving away too much
information about themselves," Harris Interactive (Nasdaq: HPOL) analyst
Lori Iventosch-James told the E-Commerce Times. "A lot of consumers
will pay to keep from forking over too much data. But people are
conditioned to get certain things for free on the Web. Getting them to
change that habit will be a lot harder."
E-COMMERCE SPECIAL REPORT:
The Reinvention of E-Commerce
By Elizabeth Millard
E-Commerce Times
August 29, 2002
--------------------------------------------------------------------------------
Learn how your company can tackle the challenge of continually integrating
to remain
competitive as e-business technologies evolve. Visit us online today to
download your
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--------------------------------------------------------------------------------
In some ways, brick-and-mortar companies have it easy. They can study the
successes and failures of firms that came before them. When contemplating a
new venture, they can leisurely peer at the practices of giant corporations
and thriving mom-and-pop operations to decide which
strategy to employ.
In the past, brick-and-clicks and pure-plays have not had that luxury. But
as the ins and outs of e-commerce have become better known, many companies
have begun to change their practices.
And rather than jumping into Web waters teeming with competitors, a
significant percentage of businesses have chosen
to focus on differentiating themselves and targeting consumers in smarter
ways.
Turning a Corner
"In general, companies have moved away from an online strategy that was in
many cases uneconomic and opportunistic to a business model that is
economically sustainable," Boston Consulting Group analyst Simon Stephenson
told the E-Commerce Times.
Changes can be seen across the Web as companies focus on giving customers
more of what they want -- content -- and fewer bells and whistles. For
example, many automakers have retooled their sites significantly to reflect
customers' needs. If site visitors want to know the
available colors for a car, they will likely find those colors very
easily on a manufacturer's site.
Sellers in other sectors -- such as financial services firms, booksellers
and clothing retailers --also have beefed up content and improved site
navigation. In almost all sectors, the use of new
technology to showcase products rather than design capabilities has helped
e-commerce move beyond its beginnings.
"Lands' End is very out there with adopting new technology," Forrester
(Nasdaq: FORR) analyst Harley Manning told the E-Commerce Times. "They use
things like a virtual model to draw people to the site."
Bumps in the Road
Of course, there might still be a long way to go until e-commerce evolves to
the point of being truly useful to consumers. Site design, in particular,
still seems to be a sticking point for some companies.
"On average, sites aren't improving," Manning noted. "But some of the
leaders have really begun to crack the code and
have started to open a wide gap between themselves and their followers."
Companies that yearn to follow the leaders do not lack knowledge about
usability and customer needs, Manning said. Rather, they often suffer from
poor internal coordination. "Very often, design
teams and outside experts know what to do," he said. "But they're ordered to
do the wrong thing by people who sign the checks."
Businesses that pull ahead almost always have an executive champion who is
willing to fight for continuous site improvement
and customer-focused design, Manning noted.
Future So Bright
For companies trying to reinvent themselves through e-commerce, there could
be a shiny vista ahead. Stephenson said there has been a striking
improvement in profitability for online retailers
in particular.
"This is driven in large part by massive improvements in marketing
efficiency," he said.
"They've moved away from broad marketing channels to more targeted efforts."
A good example of this effort is the leading booksellers, Manning said.
"Take a retailer like Barnes & Noble (NYSE: BKS) . They know how customers
browse for books, how they shop for that
particular product. So they've changed their site based on that
understanding."
Emulating effective strategies will likely be a popular course of action as
companies mine their knowledge of proven online techniques and attempt to
apply that wisdom to the Web. And as those who sign the checks begin to
understand what must be done, perhaps even e-commerce followers can catch up
to the leaders.
The following materials describe an investment in futures. You should be
aware that Futures & options trading is not suitable for all individuals.
The degree of leverage available can lead to large
profits as well as large losses. Past performance is not indicative of
future results. If you do not acknowledge the
risks described above, the following materials should not be used for the
purposes of making an informed decision regarding an investment in futures
or options.
The 12 Golden Rules for Successful Trading
1. Adopt a definite trading plan.
Because of the emotional stress that is inherent in any speculative
situation, you must have a predetermined method of
operation, which includes a set of rules by which you operate and adhere to,
thus protecting you from yourself. Very often, your emotions will tell you
to do something totally foreign or negative to what your market trading plan
should be. It is only by adhering to a preconceived formula that you can
resist the emotional temptations and stresses that are constantly present in
a speculative situation.
2. If you're not sure, don't trade.
If you're in a trade and feel unsure of yourself, take your loss or protect
your profit with a stop. If you are unsure of a
position, you will be influenced by a multitude of extraneous and
unimportant details and will probably end up taking a loss.
3. You should be able to be right 40% of the time and still show handsome
profits.
In speculating, it would be folly to expect to be right every time. An
individual with the proper trading techniques should be able to cut his
losses short and let his profits run so that even being right less than half
the time will show excellent profits. This point is re-emphasized in Rule
Four.
4. Cut your losses and let your profits ride.
The basic failing of most speculators is that they put a limit on their
profits and no limit on their losses. A man hates
to admit he's wrong. Therefore, an individual will often let his loss ride,
becoming larger and larger in hopes that eventually the market will turn
around and prove him correct. Then after a while, he begins hoping for a
small loss and gives up hoping for a profit. Human nature also dictates that
an individual wants to take his profit right away and thus prove himself
correct.
There is an old saying, "You never go broke taking a small profit." But you'll certainly never get rich that way. Being satisfied with small profits is the wrong mental approach for making money in speculation. If you are correct when entering a speculative situation, you will know it almost immediately and will show a profit quickly.
However, if you are wrong, you will show a loss and you should remove yourself from the situation quickly. Taking a small loss does not necessarily mean you were wrong in your thinking. It simply means that your timing was perhaps incorrect and that you should wait for the correct timing and situation to allow you to reenter the market.
Remember, in any speculative situation,
the market is the final judge. An individual must let the market tell him
when he is wrong and when he is right. If you show a profit, ride it until
the market turns around and tells you that you are no longer right, and, at
that time, you should get out...but not before! On the other hand, the
market will also tell you if you are wrong and it would be a serious mistake
to argue with what it is saying.
5. If you cannot afford to lose, you cannot afford to win.
As we have stated in Rule Four, losing is a natural part of trading. If you
are not in a position to accept losses, either psychologically or
financially, you have no business trading. In addition, trading should be
done only with surplus funds that are not vital to daily expenses.
6. Don't trade too many markets.
It is difficult to successfully trade and understand a specific market. It
is next to impossible for an individual, especially a beginner, to be
successful in several markets at the same time. The fundamental, technical,
and psychological information necessary to trade successfully in more than a
few markets is more than the individual has either the time or ability to
accumulate.
7. Don't trade in a market that is too thin.
A lack of public participation in a market will make it difficult, if not
impossible, to liquidate a position at anywhere near the price you want.
8. Be aware of the trend. ("The Trend is your friend")
It is vitally important that a trader be aware of a strong force in the
market, either bullish or bearish. When this force is at its height, it
would be folly to attempt to buck it. However, one must learn to recognize
when a trend is about to run its course or is near a period of exhaustion.
By an ability to recognize the early signs of exhaustion, the trader will
protect himself from staying in the market too long and will be able to
change direction when the trend changes.
9. Don't attempt to buy the bottom or sell the top.
It simply can't be done unless you have the aid of a crystal ball or some
other tool which could be peculiar to the mystic. Be content to wait for the
trend to develop and then take advantage of it once it has been established.
10. Never answer a margin call.
This rule acts as a stop loss when your position has weakened considerably.
By dogmatically and arbitrarily adhering to this rule, you will be forced to
get out of the market before disaster sets it. It is often difficult to
admit you're wrong and get out of the market (which you probably should have
done well before you received a margin call). However, the presence of a
margin call should act as a final warning that you have let your position go
as far as you conceivably can (unless the initial margin is out of line with
the volatility of the contract).
11. You can usually sell the first rally or buy the first break.
Generally, a market which has just established a trend either up or down
will have a reaction and good interim profits can be made by recognizing
this reaction and taking advantage of it. For example, in a bull market, the
first reaction will generally be met by investors waiting to buy the break.
This support generally causes the market to rally. The reverse is true of a
bear market.
12. Never straddle a loss.
A loss by itself is difficult enough to accept. However, to lock in this
loss, thus making it necessary for you to be right twice rather than the
once (which you previously found impossible) is sheer absurdity.
While the following are not specific trading rules, they are general
observations
which will aid the speculator in formulating an understanding of markets:
You must retain control of the situation and yourself. Do not allow your
position to control you. It is a mistake to find yourself in a position
larger than you can reasonable handle. When this occurs, you will find that
the sheer size of the position, rather than the facts of the situation
itself, affects your judgement.
The commodity does not know that you own it. You must remain impersonal in
your trading. When you take a position and you are wrong, remember it is
better to get out immediately! The market will not feed badly about it if
you do, but you will if you don't.
The market always looks its worst at its bottom, and the best at the top. It
is important to remember that before the market turns around, it is at its
very worst. Therefore, be prepared to treat each day objectively by not
allowing the emotional fever to carry over and cloud your judgment.
Equity...Equity...Equity...Not Cash. If a man is long from 100 points below
the market and you are long from the opening that day, you both had the same
amount invested in the market from the time both of you were long.
Therefore, if the market goes up ten points, you each have made the same
amount that day. If the market goes down 10 points, you have each lost the
same amount. You should not be confused by the fact that someone has taken a
position before you. You must be concerned with your own situation
primarily. Each day, start fresh. Your paper profits or losses from previous
days should not enter into your decisions regarding the course of action you
will take.
Treat paper profits as if they are your own money. They are! Naturally, the
opposite also holds true.
The Brand's The Thing
By Jonathan Jackson
How do you build a brand online? Of course every company wants an instantly
recognizable brand name like Yahoo! or Amazon. At the same time, nobody
wants to end up with a dot-bombed turkey like Pets.com or Furniture.com, and
therein lays the challenge. Answering that question, and many more, is the
aim of Cyberbranding.
To put it bluntly, this is an ambitious book. The author takes as her task
not only the definition and study of online brands (a Herculean task in and
of itself) but also every form of online communication touching on a brand.
There are chapters on site design, market research, online advertising,
affiliate marketing and even public relations. Phew.
While each of these topics could easily be a volume in itself, Breakenridge
strives valiantly to bring a sense of order to the online branding
landscape. Indeed, the subject of building and nurturing brands online has
been a hot topic for some time. Hardly a day goes by that someone isn't
touting the Internet as the best way to revive a moribund offline brand, or
a cost effective way to launch a new brand.
Take, for example, the humble banner ad. Having hawked online advertising as
the "ultimate direct response medium" in its early years, the online
industry essentially set itself up for a fall. While click-through rates
("CTR") were initially exciting, the newness wore off until we reached the
barely perceptible CTR of today. Now we hear nothing but stories about how
distracting and even annoying banner ads can be.
Spinning around 180 degrees, the industry then said that online advertising
was really about branding. Even if consumers don't click on a banner ad, the
mere fact that they've seen the banner ad will have a beneficial impact on
brand awareness. Oh, of course. The jury is still out on that one but the
new "in your face" jumbo banner sizes seem to clearly indicate that the
industry is moving toward branding.
And let's nor forget about e-mail. It is clear that e-mail marketing gets a
better response than banner ads. But opt-in e-mail ads and other forms of
permission e-mail (corporate and sponsored newsletters, Web site updates,
order confirmations, personalized thank-you notes, etc.) can also enhance
brand equity in several ways.
As the ultimate "push" technology, e-mail is virtually impossible to ignore.
Branding can be achieved merely by having clearly labeled e-mail delivered
to a subscribers' inbox on a regular basis. The subject line, too, can be
used for branding purposes. Capable of including company logos and other
marketing images, HTML-formatted e-mail is often preferred by marketers and
publishers for its branding advantages over plain text.
Breakenridge also wisely points out that customer relationships are becoming
an integral part, as well as an expression, of the brand. Traditionally,
branding messages have been one-way communications, from marketer to mass
audience. With e-mail, branding is conducted and reinforced through two-way
communications between the marketer and the customer, resulting in an
individual branding experience for each customer prospect.
At the end of the day, every company would like its brand to be synonymous
with its product in the mind of the consumer. In the same way that people
reach for a Kleenex, make a Xerox, or FedEx a package, online companies hope
that people will eventually think of their brands and nothing else. We may
be seeing the beginning of that as people Google (search for) an ex-beau or
put (auction off) something on eBay. Naturally the end game is to catch the
hearts and minds of the consumer, and Cyberbranding is an excellent way to
begin that effort.
--------------------------------------------------------------------------------
Jonathan Jackson is managing partner of Galati+Jackson, a consulting firm
based in New York City. He has written extensively on online advertising and
email marketing since the inception of the Internet. A frequent guest
speaker, Jonathan has addressed audiences around the world on marketing and
advertising topics and also teaches Internet marketing at colleges in New
York.
Intrusion Detection Systems: SecureWorks
SecureWorks offers a managed intrusion prevention service that's priced to
give mid-sized businesses a depth of security that they couldn't otherwise
afford.
by Jeff Goldman
[August 28, 2002]
Kevin Ketts, SecureWorks vice president of development, says the company was
founded thanks to one man's search for something beyond intrusion
detection—in the mid-1990s company co-founder Mike Pearson wanted to find a
way to provide true intrusion prevention. "He envisioned a way to
incorporate communication between firewall and IDS, before almost anybody
else had considered doing that," Ketts said.
Pearson joined with fellow former CompUSA executive Joan Wilbanks to found
SecureWorks early in 1999. "To start, they put together a patent for the
process of managing a remote intrusion prevention device," Ketts said. "They
also put together a patent for the technology behind the intrusion
prevention—the back end technology for managing it."
When it was first offered, the service was aimed at smaller business
clients, but Ketts says the market just wasn't ready. "Back in that time
frame, intrusion detection was fairly unknown, let alone intrusion
prevention," he said. "There was just too much education and too long of a
sales cycle for those small-office, home office type businesses to even be
interested in it, so we started to move up into the mid-tier market."
In the long run, he says, it's turned out for the best—especially
considering the challenges of trying to manage security for a mid-sized
company. "Managed security services are an ideal solution for a mid-sized
company that can't dedicate an entire group to managing security," Ketts
said. "It's a great way for them to be able to get good monitoring and
response without any additional head count or real capital outlays."
Born to serve
From the beginning, Ketts explains, SecureWorks was always envisioned as a
service rather than a standalone product, which has made the job easier for
the company's security team. "It makes it a little different than some of
the other products that are out there. We can overcome some of the
challenges that might be incurred in trying to manage commercial,
off-the-shelf products as a large MSSP," he said.
The cornerstone of SecureWorks' Managed Intrusion Prevention Service is the
iSensor appliance, which sits on the customer's network to monitor traffic.
"We know it intimately, because we've created it—and we've created the
systems such that they're built to be remotely managed en masse," Ketts
said.
The iSensor's intrusion prevention methods, Ketts says, have evolved over
time. "First, it was an integration with the firewall: now, it's a packet
filtering intrusion prevention system," he said. "It's still tightly
integrated with the firewall, but the intrusion prevention system itself
does the packet filtering, so it's a little different than some of the
things that exist out there today."
The signature sets used by the iSensor are constantly maintained and updated
by SecureWorks' research team. "They're dedicated to managing the attack
signature database on the iSensor, and they do it in two ways," Ketts said.
"First, they write signatures that protect against vulnerabilities rather
than specific exploits—then, later, they'll add new signatures that are more
refined to protect against specific exploits."
By protecting against vulnerabilities as well as exploits, Ketts says,
SecureWorks was able to block attacks like Code Red and Nimda before they
were even identified. "Those types of worms exploit specific functionality
within a Web server," he said. "Because that vulnerability was announced
months before those exploits were written, we had signatures in place to
protect against the vulnerability."
In addition to identifying and blocking malicious traffic, the iSensor also
sends alerts to SecureWorks' security operations center. If the nature of
the traffic is simple to determine, Ketts explains, SecureWorks just alerts
the customer as to the action that was taken. "Once we determine whether it
was a threat or a false positive, we'll write up an incident report and send
that to the customer," he said.
Other traffic, though, isn't as easy to pin down. "We have a certain level
of alerts that are in a gray area: they're not really malicious attacks, but
they're probably precursors to attacks," Ketts said. "Those are where we
spend a lot of our time, analyzing what's happening and what's going to
happen. If we see something in that gray area, then we'll really dig into it
and determine what's going on."
Thanks to the work of SecureWorks' research team, Ketts says, its false
positive rate is currently below six percent. "With a lot of the intrusion
detection systems out there today, you're looking at maybe 80 to 90 percent
false positive rates, and so it's very hard to catch the actual attacks," he
said. "Because we've really refined our signature set, most of what we look
at is the real deal."
Pricing for the iSensor hardware starts at $2,475 plus an installation fee.
The pricing for SecureWorks' managed services is based on the number of
nodes protected, starting as low as $4,995 per year.
Accredited intrusion solution?
Jerry Nichols is Vice President of Operations for the Newport News
Shipbuilding Employees' Credit Union. Founded in 1928, the credit union
boasts 78,000 members and over $600 million in assets. According to Nichols,
the National Credit Union Administration requires intrusion detection for
all credit unions with online access, so he's spent quite a while
considering various IDS solutions.
When he started exploring the options, he says, it quickly became clear that
managed services were the way to go. "We looked at trying to do it
ourselves, and there was no way we could justify the cost—hardware,
software, and the right talent—to cover us 24/7," Nichols said. "I talked to
a few application service providers that were providing that service, but I
really wasn't happy with their model."
The fact that SecureWorks was focused exclusively on managed security,
Nichols says, was a key selling point—and, he notes, others have failed
where SecureWorks succeeded. "We had a few companies try to get our
intrusion prevention business after we had the iSensor installed," he said.
"We said, 'Go ahead and see if you can get past it.' And they couldn't.
That's a good indication of how good it's been for us."
In the long run, Nichols says, SecureWorks' managed services have been able
to provide the kind of security that the Credit Union would never have been
able to provide internally. "I've got a minimal staff, and I can't afford to
go out and hire the kind of expertise that we would need to set up the
hardware and software-much less have the 24/7 coverage," he said.
And according to Ketts, that kind of service has translated into happy
customers. "Over the years that we've been in business here, we've really
learned how to provide this service to our customers and to provide them
value," he said. "That's reflected in our customer retention rate: we have a
better than 93 percent customer retention rate, which really speaks to the
quality of what we do for our customers."
SecureWorks
11 Executive Park Drive
Atlanta, GA 30329
Voice: (877) 905-6661
salesinfo@secureworks.com
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